An Ofcom lawyer:  that is now the very definition of a nameless, faceless bureaucrat…

The funny thing is that many of these Ofcom officials who cannot be named in response to an FOI Act request will often go to conferences or events and publicly specify their name and job title.  In fact, they often speak at these functions.  One Ofcom lawyer (who has since moved on) even gave an extended interview to the media (link), but I suppose Ofcom would not have named him at the time either.

The rule should be:  If you have business cards and an Ofcom-supplied blackberry, you are public enough to disclose under an FOI Act request.

Needless to say, by refusing to release the org chart, Ofcom ensures that access to information about Ofcom’s legal team remains two-tiered.  Those lobbyists or similar persons with a close connection to Ofcom’s legal work would of course know perfectly well the organisation of the team.  It would only be members of the general public who would not know.

For example he points to a graph which purports to show the percentage of people of various age group who use digital radio, before pointing out that the small print reveals that the question asked had actually been ‘Have you ever used digital radio?’, which as he points out is akin to asking someone in a supermarket if they have ever bought a banana.

Goddard asks questions regarding 8 sets of figures used in the report, and points out the ways they are wrong or misleading (by omission). Whether you are in favour of Digital radio switchover or not, you should be concerned by the apparent standards used by Ofcom to constitute its evidence in this report.

Ofcom watchers (both of you) may recall that Ofcom interlinks with the FSA in one very important way:  The FSA supplies something called the Nutrient Profiling Model (NPM) that Ofcom uses to determine whether or not a food product is high in fat, salt and sugar (HFSS).  HFSS products are subject to Ofcom regulations that restrict their advertising around television programmes aimed at children under age 16. (link:  I am a critic of the HFSS regulations).

With the possibility that the FSA may be abolished, it may be critical for Ofcom’s HFSS advertising rules that the FSA’s NPM does not become a regulatory orphan.  As Ofcom said in November 2006:

For these reasons, we consider that, if it was decided to adopt a nutritional profiling scheme as a means of differentiating between HFSS and non-HFSS products, the FSA model would be a credible and practicable approach: that there would be scope to make adjustments to it in the light of experience and new information; and that there is currently no alternative approach that would be credible and practicable.

Hmmm … it’s amusing:  It looks like Ofcom has painted itself into a corner if the Department of Health (i) abolishes the FSA and (ii) at the same time does not pick up the NPM regulatory function in-house.   I suppose Ofcom could continue to use a stale-dated NPM for some period of time, but it would be vulnerable to legal claims that it cannot take account of new information as it claimed in November 2006.

Are the days of junk food advertising regulations numbered?   I doubt it!  The nanny state always seems to find a way forward …

‘A broadcaster could not, for instance, accept payment from an insurance company to feature a storyline about a house burning down and the homeowner not being insured.’

D’Oh!  Ofcom just stole my idea for a compelling new drama called: ‘The Uninsured Homeowner Who Lived Next to a Volcano in Iceland’.  Nanny state!

Anyway – the details are here:  http://www.ofcom.org.uk/consumer/2010/06/ofcom-publishes-product-placement-proposals/

If you are really opposed to what’s going on here (one way or another), there’s not much point in writing to Ofcom.  Much of this activity is being driven as a result of EU regulations and UK legislation that transposes those regulations into UK law.  So it’s similar to the pending EU legislation to require all mobile phone users to be licensed individually — there’s really nothing that can be done.

BTW:  Here’s how it’s done across the pond, Lemon style:

Dear Office of Communications,

I would like to know why Ofcom posts on the WhatDoTheyKnow website, for all the world to see, documents which bear at their head the stamp CONFIDENTIAL. In what sense can they possibly be considered confidential after having been designedly placed in the public domain by Ofcom?

What would anyone who has read such documents need to do to be deemed to have compromised this chimerical confidentiality in such a way as to incur legal jeopardy or even to merit the disapproval of right-thinking people?

Yours faithfully,
Michael McCarthy

************

The world awaits Ofcom’s answer to this gem!

Click here to view the embedded video.

Some nuggets (it’s mostly German-focused):

‘[I]n sparsely populated rural areas the nationwide extension and upgrading of advanced communications networks can only rarely be a commercially viable proposition. This inherent commercial downside puts rural areas, which are also poorly served with other infrastructure, at risk of falling even further behind in their development.’

***

‘On an international comparison of communications networks the countries with large public-sector subsidy pools have better systems in place at present than those that refrain from providing financial assistance. However, the international comparison should not tempt observers to jump to the conclusion that the road to privatisation and deregulation of the entire telecommunications sector embarked upon over a decade ago should now be completely abandoned in favour of the faster extension and upgrading of broadband networks.’

***

‘The huge capital expenditure involved in broadband projects means the outlay can probably only be recouped over an extended timeframe. With the longer amortisation period, however, the uncertainty surrounding the project also increases. This can be mitigated with a regulatory framework that boosts the planning certainty for competing investors and financiers.’

The Ofcom-related nuggets were interesting:

‘A big area I want to repatriate to government is policy making’

Well it depends on where one draws the line between regulation and policy making.  If another issue like junk food advertising came around again, would the DCMS really want to run a massive consultation and deal with the stakeholders on the finer points of the agenda?  I doubt it.  I expect Ofcom will continue to have a large role in policy making, no matter how we label it.

‘I’ve got no plans to go through all the heads of quangos on a hire and fire exercise. If people are working hard to deliver the government’s agenda, as Ed [Richards] is, then I’m happy to work with them.’

The relationship between government and the media regulator Ofcom is multi-faceted and complex.  The much hyped claim for Ofcom (and certain other regulators) is that they are independent.  I have always contested that.  Consider the New Labour years:  Ofcom rarely produced research or position papers that challenged or contradicted the government.  I can think of one contrary example which was the 2006 BBC charter review (and it was not a major battle).  On other issues such as junk food advertising restrictions, Ofcom marched to the government’s tune and you could hardly label the process  “independent regulation”.  I’m happy with that even though it really means the regulator is not that independent.  After all, the Con-Lib coalition won the votes, not Ofcom.  Regulatory legitimacy stems primarily from the government’s agenda, not the regulator’s structure and procedures.

What is likely to be unpicked is Ofcom’s cost base. Most expect cuts of at least 20% from budgets but Hunt refuses to be drawn: “We have to recognise that we’re all in it together. We can’t have special cases and my sectors have to bear their share of the pain of sorting out the mess we’re in.”

I’ve said it many times before:  Ofcom needs to trim its budget.  I was surprised that in this interview Hunt soft-pedaled the issue.

Stay tuned…

Respond online to Ofcom’s consultation:  here.

The Ofcom press release:

A proposed code of practice which implements legislative measures aimed at reducing online copyright infringement has today been published by Ofcom, as part of its new duties under the Digital Economy Act 2010.

The Act requires that the code of practice is implemented no later than eight months from Royal Assent, including approval from the European Commission.

Subject to consultation and approval, Ofcom expects the code to come into force in early 2011.

The code of practice

The draft code sets out how and when Internet Service Providers (ISPs) covered by the code will send notifications to their subscribers to inform them of allegations that their accounts have been used for copyright infringement.

In passing the Act, Parliament’s intention was that Ofcom should apply the obligations in a proportionate way, with the code initially covering only the larger fixed-line ISPs, but with the clear message that, should levels of copyright infringement on other networks, including mobile, increase then those ISPs will similarly be required to comply with the obligations.

Ofcom proposes, therefore, that fixed-line ISPs with over 400,000 subscribers will be covered initially.

This would mean that the seven largest ISPs – BT, Talk Talk, Virgin Media, Sky, Orange, O2 and Post Office – will be covered by the code from the outset.

Ofcom proposes to regularly review evidence of online copyright infringement across all service providers and to extend the scope of the code if appropriate.

Online copyright infringers

The code also sets out the threshold for including subscribers on a copyright infringers list which must be compiled by ISPs.

ISPs will have to record the number of notifications sent to their subscribers and maintain an anonymised list of alleged serial copyright infringers.

Copyright holders can then request information on this list and pursue a court order to identify serial infringers and take legal action against them.

Ofcom is proposing a three stage notification process for ISPs to inform subscribers of copyright infringements and proposes that subscribers which have received three notifications within a year may be included in a list requested by a copyright owner.

Appeals process

Ofcom’s approach is guided by the need to protect the interests of consumers and citizens.  Ofcom will establish an independent, robust subscriber appeals mechanism for consumers who believe they have received incorrect notifications, arrangements for enforcement and dealing with industry disputes, as well as sharing the costs arising from the code.

Additional measures to reduce copyright infringement

The code of practice forms part of a wider set of industry activity to tackle online copyright infringement including consumer education, the promotion of lawful alternative services and targeted legal action against serious infringers.

Ofcom intends to monitor how these develop and will report regularly to Government on both the effectiveness of the code and on the additional measures.

Click here to read the consultation which closes on 30 July 2010.

As everyone knows the centrepiece of Labour’s vision for the sector was Ofcom.  Created primarily with the organising principle of convergence in mind, Ofcom has been partially compromised from the very start:  (i) Ofcom has one policy foot in Europe and one policy foot in the UK; (ii) the issue of internet content was not really dealt with by the Communications Act 2003; (iii) while imagining itself a modernised regulator, Ofcom remains saddled with some very old-school regulatory duties; (iv) Ofcom operates in a complex policy and regulatory environment, relying on coordination with other regulatory bodies, industry self-regulation, and the resources (and luck) necessary to make everything work; and finally (v) Ofcom finds itself in a changing landscape of devolution that is completely different from what a regulator would have confronted in May 1997 when Labour came to power.

So a big part of Hunt’s job will involve — to some degree — a re-conception of Ofcom and its related regulatory environment.  I therefore recommend that Hunt initiate a thorough review and public consultation on the sector, focusing on at least the following issues:

– Overall spend. Ofcom’s budget for 2010/11 is 142.5 million GBP.  That compares to the legacy regulators’ combined budget of 118.3 million GBP in 2002/03.  Now that’s a significant nominal increase, but perhaps a real decrease if you fully buy Ofcom’s spin.  It also depends on whether you consider Ofcom’s duties to have changed much since 2002/03.  My take:  Ofcom still spends far too much for this digital era.  The regulator has achieved some easy efficiencies but needs to make much harder choices to lower its total cost to regulated firms and the public.

– The grand, withering vision. After the 2005 general election Lord Currie, then chair of Ofcom gave a speech where he stated:

In practice a “bias against intervention” means that we will try to get out of the way. I have also said that we must encourage innovation and investment in the sector, and the best way to achieve this is by being somewhere else. In essence, an effective regulator must aim to regulate itself out of a job. This withering of regulation will be seen by some as a threat. But I see it as a proper ambition.

Let’s face it — Ofcom appears to have quietly abandoned its ambition.  In some respects, the fault lies with Parliament, the government, regulated firms (and even the complaining public).  But in many important respects, Ofcom has shown a desire to intervene even where there was no statutory duty and the evidence showed it might have very little real impact with its actions (eg, junk food advertising).

– Structures and procedures. Ofcom was created with a governance structure that was in vogue in 2001/02.  Ofcom has a majority non-exec board and split chair / CEO roles.  Ofcom also has numerous (seven, I think) advisory committees and similar bodies.  I won’t bore you with the details, but this type of cumbersome management structure — in my view — cannot reliably be said to have meaningfully and consistently improved Ofcom’s decision making and activities.  The evidence is just not there.

– The related environment. Consider the BBC Trust, Phone Pay Plus, the ASA, etc.  They each have their own budgets, remits and personnel.  And combined with Ofcom, these entities push the annual spend on media and communications regulation to over 200 million GBP per year.  (I don’t even want to think about Europe and the bill for all that regulatory activity).

– Regulatory principles. Vague principles such as a “bias against intervention” are often just spin.  There should exist a legally binding mechanism that would permit any regulated firm to petition Ofcom for regulatory forbearance (or individually waive the application of a regulation if it would cause undue hardship).  If Ofcom does not act on the petition within 6 months, it would be automatically granted.  The FCC already does this — why can’t Ofcom?  This would solve a moral hazard:  Regulators infrequently revisit their own rules.  A similar provision could require that, when Ofcom adopts new regulations, it should be required to consider whether to automatically “sunset” them after a certain date.  This forces the regulator to confront the basic reality that their predictive judgments are often error-plagued.

– Specific policies. I’m not sure it would be a great idea to consider specific policies in a review of the sector, but some questions do relate to Ofcom’s overall remit:  (i) why do we have a broadcast content regulator when so much content is now online and regulated only by the criminal laws and the laws governing libel, competition and consumer protection?  (more here)  (ii) ditto for advertising regulation.  (iii) The Digital Economy Act – I can’t be bothered to offer an opinion!  And the BBC, channel 4, etc. — too much public money being spent in this digital era.  Why is the BBC still not subject to an annual NAO audit?

* * *

It will be interesting to see what happens.  It might be that, given the coalition nature of the new government, there is not enough consensus to bring about real change in the policy making and regulation covering the media and communications sector.  Thus, I think the low-hanging fruit for Hunt is to get quick Ofcom agreement on a less-is-more, lower cost approach to regulation.