Should Ofcom regulate the BBC?

If any of you read a newspaper over the past week, you will see we are now in the era of the shrinking pie.  And wow… it is shrinking quickly.  The policy talk is now of cutting budgets and efficiency, not investment.  And certainly not subsidy.  That’s probably a good thing when applied to the UK media sector.  And of course the biggest public target in the media sector is the BBC and its regulatory body the BBC Trust.

DCMS Secretary Ben Bradshaw at the RTS:  ‘I’m also concerned about the regulatory structure of the BBC. Although the Trust has performed better than its predecessor, I don’t think it is a sustainable model in the long term. I know of no other area of public life where – as is the case with the Trust – the same body is both regulator and cheerleader.’

Tory Shadow Secretary Jeremy Hunt in the Daily Mail:  ‘There’s a conflict at the heart of the BBC Trust.  Is it there to champion the institutional interests of the BBC or is there to champion the interests of the licence fee payer?  Licence fee payers need a body that’s wholly independent of the BBC, that they can complain to if they are not happy.  We haven’t made a decision yet whether that role should be performed by Ofcom.’

Folks, it looks like there is an emerging consensus that the BBC Trust should be discarded and that full external regulation of the BBC will be a reality.  Today the BBC is regulated by Ofcom only for certain content matters … and if I recall correctly Ofcom already has input (but not the final say) on new BBC services with respect to their market impact.

In my view having Ofcom fully regulate the BBC is the right decision.  Ofcom is a good regulator and — while not without its faults (which I tend to focus on) — it would certainly do much better than the BBC Trust.  It would probably save a significant amount of the 12 million GBP per year the BBC Trust wastes spends and hold the BBC up to real accountability just like other broadcasters.  12 million GBP!  The BBC Trust is the most expensive group of cheerleaders on the planet.

Some caveats and additional thoughts:

– Any legislation that puts the BBC under Ofcom’s purview should also take a hard look — as James Murdoch recently urged — at the overall level of intervention and regulation in the media sector.  It’s far past time for the elimination of most broadcasting content regulation in my opinion.

– Ofcom did not cover itself in glory over the past few years as the other state-owned broadcaster, Channel 4, engaged in a nauseating beg-a-thon for taxpayer subsidy under the guise of its distinctive quality at the same time it was pimping Big Brother.  At the time, I said it was classic rent-seeking behaviour and borderline regulatory capture.  Ofcom basically allowed Andy Duncan to set a “Save C4″ agenda during its 2008 review of public service broadcasting.  This type of activity is very hard to combat.  I think one simple procedural remedy is to require Ofcom to publish an online disclosure log of all its ex parte contacts with regulated firms and similar entities.  Start there.

– There would be some irony in having Ofcom regulate the BBC given that the regulator is routinely criticised for the generous pay and benefits assigned to its senior officials.  Of course profligacy is also a common complaint about the BBC.  Under its new board management, I think Ofcom probably has better discipline than it did in the past.

– Legislation should also specify that Ofcom will supervise an annual NAO audit of the BBC, conducted under principles to be set forth in the legislation, along the lines of Jeremy Hunt’s proposals.  Basically, the agenda should conform to the notion that the BBC should rein itself in and stick solely to a limited public service mission.