Regulating the BBC: A tough job for Ofcom

Regulating the BBC: A tough job for Ofcom

By Martin Stott,
Wednesday, 22nd March 2017
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Martin Stott lays out the challenges facing the regulator as it takes over responsibility for the BBC

As Sir David Clementi begins his work as the first Chair of the “unitary board” that he recommended to run the BBC, is he having second thoughts about his other big piece of advice – that Ofcom should regulate the BBC?

It was Clementi’s report, published one year ago and largely adopted by the Government, that suggested scrapping the BBC Trust. The idea was to replace it with a single board. Meanwhile, for the first time in the BBC’s history, an external body would regulate the corporation.

Sir David opposed the idea of a discrete, BBC-only regulator. He said that Ofcom had scale and credibility and “would be a strong regulator to match a strong BBC”.

Twelve months on, Ofcom is preparing in typically comprehensive manner for BBC Day – 3 April. That is when it formally takes over responsibility for overseeing the BBC.

Over recent months, Ofcom has not only recruited dozens of new staff, it has issued eight separate consultations on how the new regime will work in practice. These include Ofcom’s enhanced role in content regulation and its oversight of the BBC’s commercial activities. The most substantial document, the new operating licence that will cover the whole BBC service, has yet to be published.

Of those that have been published, most are highly detailed transpositions of the new BBC Charter and Agreement: they lay out the procedures that Ofcom will follow in the big new areas that it is responsible for.

There is already a new Ofcom acronym: a BCR – BBC competition review – will be instituted if there is evidence that a BBC service is, or might be, having an undue impact on the market.

And there will be a new complaints procedure, called “BBC First”. Given that the BBC receives a couple of hundred thousand complaints each year, they will not go to Ofcom in the first instance (as complaints about all other broadcasters can).

“The BBC has a special status but we won’t give it special treatment”.

One surprising aspect of the new set-up is that certain areas of BBC activity will be exempt from Ofcom’s oversight. These include the World Service and non-video online content (though Ofcom will have an advisory role in the latter case). It is something of a paradox that the BBC Trust regulated the BBC in its entirety, while the avowedly more robust Ofcom regime will leave some activities to the unitary board.

Ofcom’s trickiest responsibility could turn out to be the BBC’s operating licence, which is why the regulator is taking time to consult the corporation and others over the course of this year. The licence will set out how the BBC’s core services should fulfil its mission and public purposes – and the criteria that Ofcom should use to assess the BBC’s performance.

Crucially, Ofcom will assess whether the BBC’s output has been sufficiently distinctive. This may prove challenging for a regulator that likes to rely on objective, measurable criteria. For many people, distinctiveness only truly exists in the eye of the beholder.

Overall, Ofcom is talking a tough game. It says that the aim of the new regime it is putting in place is to hold the BBC to account more robustly than in the past. And, to ensure that happens, the regulator will have tough enforcement powers.

The really important question, however, is not about the flavour of Ofcom’s rhetoric, nor what it has written down in its detailed procedures, but how it will act when a controversial issue arises on which it needs to adjudicate.

Ofcom says it recognises that “the BBC has a special status but we won’t give it special treatment”.

Such statements try to navigate between the higher expectations of Ofcom that many external stakeholders have (including some commercial broadcasters) and the BBC’s status as a publicly funded body that commands considerable public support.

Ofcom may say it wants to regulate the BBC like any other broadcaster, but the BBC is unique. And not only in relation to its funding model: people have higher expectations of its services and we know that it attracts many more complaints than other broadcasters.

At the same time, the regulations and obligations placed upon it are more extensive and, in many ways, tougher than for its competitors.

The risk for Ofcom (and for the BBC) is that when some knotty problem arises, the regulator either does not prove as tough as some arch BBC critics might hope for, or it overreacts in order to demonstrate its toughness.

Ofcom is going to be under much greater scrutiny in regulating the BBC than in its dealings with any other broadcaster. That creates a potentially greater reputational risk for itself. No wonder that it was unenthusiastic in volunteering for the role.

Ofcom's Sharon White
(Credit: Paul Hampartsoumian)

The regulator also has to worry about how close an interest it is seen to be taking. For some people, the BBC Trust was always too close to the corporation – though, in practice, it did reject some of the BBC Executive’s wilder ambitions. So, will Ofcom be an arm’s-length regulator and allow the new BBC Board to get on with running the corporation – or an interventionist one? The conundrum is that, if the BBC makes decisions that Ofcom agrees are within its remit but which then prove controversial, Ofcom may face criticism for being too hands off.

It will probably take years for the true nature of the BBC/Ofcom relation­ship to become clear.

Perhaps the weightiest medium-­term problem is that the BBC is a big, complex and very high-profile organisation – and Ofcom has many other issues to worry about: the telecoms market, spectrum policy and competition cases, not forgetting the rest of UK broadcasting.

Ofcom will be under intense scrutiny over how it deals with the corporation over the next year or two. But just how much will Ofcom be able to maintain a focus on the BBC once this initial phase is over?

Perhaps a tough regulator concentrating on ensuring that the BBC complied with the new Charter might have been a better fit. But that was the option Sir David Clementi rejected a year ago.

Martin Stott was, until recently, head of corporate and regulatory affairs at Channel 5.

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