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Communications bill at a glance

LONDON - There were few surprises for the media and advertising industries in the final draft of the government's communications bill, published this week, which the government said it hoped would create a market that thrives on competition.

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The bill establishes the main duties of new regulator Ofcom -- the new regulator that replaces the Independent Television Commission, Radio Authority, Oftel, Broadcasting Standards Commission and the Radiocommunications Agency.

Advertising regulation

However, despite Ofcom's wide overall responsibility for regulating advertising, it has failed so far to give a clear idea of what its policy on the regulation of broadcast advertising is to be. It was also given a get-out clause in the bill, which states that the powers to regulate the advertising industry will be contracted out to another body.

This puts the ball back in the court of the advertising industry to put forward a proposal for the type of body that it wants to see regulate TV advertising. This is in line with the bill's self-regulation ethos, which is underpinned with tough measures to make sure the consumer is protected.

Patricia Hewitt, secretary of state for trade and industry, said: "In drafting the bill, and throughout the process of pre-legislative consultation, the interests of the consumer have been paramount."

Political advertising

As part of the bill, the government said it was keeping its present ban on political advertising on television and radio. This has been renewed and clarified. The government said it believed, as did the Neill Committee, that this is an important plank in protecting the impartiality of broadcasting and democratic debate.

"Because of a judgment in the European Court of Human Rights concerning Switzerland, the government can not make a statement of compatibility under the Human Rights Act in relation to this ban, but believes that there remains a strong case that the UK ban is compatible and therefore wishes Parliament to consider the bill," Hewitt said.

The BBC

The regulation of the BBC is to be split between Ofcom and its governors. Ofcom will have the power to fine the BBC on matters of taste and decency in the same way that it can fine its commercial rivals, while its governors will continue to have powers over the BBC's political and editorial content. The BBC has responded angrily to the inclusion of this clause while the Conservative Party opposition has called for Ofcom to be given full power over the BBC.

John Whittingdale, shadow secretary of state for culture, media and sport, said: "It is indefensible that the biggest and most powerful of broadcasters should be allowed to continue to act as judge and jury on complaints about its behaviour and we will be tabling amendments to make the BBC subject to the same regulatory requirements as other broadcasters."

Foreign ownership

This was one of the biggest debates in the run-up to the bill being published and, much to the consternation of the industry, the government has gone ahead with its initial proposals.

Foreign and cross-media ownership laws are being swept away, to allow US companies to buy Five, ITV and all analogue radio stations. This brings the broadcasting industry in line with other industries such as publishing, which has seen companies such as AOL Time Warner buy IPC Media, while News Corporation owns The Sun and The Times.

To prevent channels being filled with low-budget US programming, which was one of the concerns of the Puttnam report, ITV, Channel 4 and Five will have to fulfil public service obligations such as regional production quotas, over and above European regulations, which state that 50% of original content must be produced in the EU.

"[The bill] will liberalise the market, removing unnecessary reguatory burdens and cutting red tape, but at the same time will retain key safeguards that will protect the diversity and plurality of our media," Hewitt said.

Radio

Radio ownership laws have been relaxed following lobbying by the industry. This will allow the operation of two local stations alongside the BBC station in each local market.

It will allow for greater consolidation in the industry. However, consolidation is limited to 55% ownership of one market, which is still a rise on the previous 45%.

This move has already given rise to speculation that US radio giant Clear Channel will enter the UK and acquire some of the UK's largest radio groups, including Capital and Emap, possible.

In conclusion, Hewitt said: "Britain is already one of the world's leaders in the communications industry. This bill will give companies an even better environment to develop their businesses in a sector of the economy that already accounts for 300,000 jobs and £12bn of investment a year."

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