BBC Charter review: Why an external competition regulator is (and always was) inevitable for BBC’s public service broadcasting services

With the announcement that Lord Burns’ Panel on Charter Review is in favour of an external competition regulator for the BBC’s public service broadcasting services (rather than the in-house one which was the Beeb’s preference), one act of a classic Whitehall farce is left to run – namely the government’s endorsement of the Panel’s recommendation.

It is a farce because after the publication of the EC’s Communication on state aid in November 2001 (see our early warning of November 2001), its preference for a truly independent competition regulator of public service broadcasting services (confirmed by DG Comp Head Phillip Lowe at last year’s Oxford Media Conference) effectively tied the government’s hands if a limited competition law exemption for services of general economic interest were to be granted to the BBC. Rather than being seen to kowtow to Brussels, however, the government has had to be seen to be putting its own house in order – hence a gold plated consultation and enquiry exercise led by a “safe pair of hands” with the outcome essentially decided in advance.

To make it more farcical still, it is even arguable that since November 2001, Ofcom has actually legally enjoyed regulatory power over the exercise of the BBC’s public service obligations since the EC Commission’s limited exemption for services of general economic interest is dependent on there being an independent regulator (which of course there has not been to date). If this is right, then Lord Burns’ exercise was redundant from the start.

Whatever the legal merits of the argument, Burns’ key finding that “the regulation of commercial/competition issues at present the responsibility of the BBC governors, subject where appropriate to … Ofcom should be brought into line with other broadcasters and regulated by Ofcom” will put the matter to rest eventually.

What this will mean in practice is that commercial competitors affected by the BBC’s activities in areas covered by the public service remit will not have to exhaust internal “remedies” (i.e. a complaint to BBC governors) before approaching Ofcom. This should certainly expedite the handling of complaints in fast moving markets when any intervention has to be swift to have any chance at all of being effective.

However, the interval between Act 2 and the denouement may be rather lengthy with an election in the offing. The Beeb’s competitors really won the argument in 2001 thanks to Brussels: it seems unsatisfactory (but very British) that they still have to await government confirmation in 2005.

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