TESSA JOWELL SPEECH TO THE OXFORD MEDIA CONFERENCE, 19
JANUARY 2006
Introduction
Thank you for your kind welcome, it’s great to be here in Oxford today.
As many of you will know, it’s been my privilege to address this
Convention for the last two years.
And the best thing about such conferences is that you always have
something new to talk about. This year, it’s convergence.
As Andy Duncan said this morning, the wait is over. Convergence is
here now, and affecting the broadcast sector at a breathtaking rate.
And once again, regulators, Government and the public are occasionally
struggling to catch up.
Once upon a time we all thought we knew what the future would hold.
We thought we knew how to future proof new advances and policies.
Not any more. With this pace of change, the only certainty is that the
future isn’t what it used to be.
So today I want to talk about how we realise the full economic and social
benefits a vibrant media sector can bring. And how we also ensure our
public service and other broadcasters continue to lead the world?
In short, how we continue to have our cake and eat it.
For those of you slyly looking at your blackberries, that was the
summary of my speech.
1
Because the role of Government is to create frameworks for industry
and to set standards. To make sure that technological advance always
goes hand in hand with top quality content.
As convergence grows apace, that role is as important as ever. So I
want to bring together some of the issues including charter review,
switchover and pan European regulation in that context. Some
questions:
How do we adapt models of regulation to meet the challenges of a
converged media?
Liberalisation where possible, regulation where necessary.
And should we adapt our expectations of PSB to meet those
challenges?
Technological Change/convergence
But let me begin with some sense of the scale of this issue.
Deloitte estimates that worldwide convergence will lead to a massive
USD1 trillion shift in valuations and revenues in the converging sectors
by 2010,
It is revolutionising consumer habits and wider society. Now.

I can already listen to digital radio on my TV;
2

Broadband enables me to watch TV, listen to the radio, download
music, and make phone calls on my computer;

With my mobile phone I can surf the web, watch TV and download
and play music. I can even make phone calls with it!

Our children will shortly be able to plug a memory stick in to the
back of their PSP to watch downloaded video clips

And you will soon be able to get a pair of iPod-compatible jeans
which have a remote control and docking station fitted in its
pockets. It will come complete with attached headphones.
Although a team of scientists are still working on the washing
instructions!
People are starting moving away from a reliance on linear programming.
They will increasingly want to choose the programming they want, when
they want it, rather than just consume the programming a traditional
broadcaster wants them to, at a time determined by a scheduler.
Only this week, O2’s Oxford trial has shown that around 4 out of 5
people would pay for a mobile TV service.
Some consumers of music wonder why they should listen to “your”
music on the radio when I can listen to “their” music on my MP3 player
or PC.
What is happening with music is becoming a reality in the audiovisual
world with the emergence of TV search and download engines.
And technology penetration is growing at a staggering rate.

Over 80% of us have mobiles. In Italy, there are actually more
mobile phones than people!
3

broadband penetration is over the 9 million household mark, and
is growing by 250,000 people each month;

67% of British households have digital TV – the highest national
penetration in the world.
That is the real power of emerging technology, to offer opportunity and
information – tailored to the needs of the individual ‘on-demand’ via
multiple platforms and devices.
Digital Switchover
This process is being given a huge momentum by the drive to digital
switchover.
Because switchover offers us not simply the chance to provide more
choice and better quality television, but also a unique opportunity to
increase access to new services, including public services.
Digital switchover is now a reality. It is no longer a question of whether
it should happen, nor when it should happen. It will happen between
2008 and 2012.
Switchover will give access to free-to-view digital television and
interactive services for the entire TV viewing population. We will take
active steps to avoid the risk of a technological divide by promoting
universality and digital inclusion.
Working with the BBC, we will ensure that the elderly and disabled, who,
like all of us, have much to gain from a greater choice of programming
and services, get the support they need.
They too will be able to feel “fully 21St century now”, as one pensioner
during the recent Ferryside trials put it.
4
Switchover will also free-up a large amount of existing spectrum to be
released for new uses, for example mobile television.
Of course, mobile TV is only one use to which the released spectrum
could be put. High definition television, wireless and broadband are
other possibilities.
The wider market
It is important to ensure that there is an appropriate framework to enable
all broadcasters to seize the opportunities thrown up by convergence.
And it is not just ‘traditional’ broadcasters who we need to consider
here. Other players want a piece of the action and will get it, whether
through fair competition or through partnerships with existing
providers.
Skype and Vonage are shaking up the telecommunications market.
Google is providing new competition to many incumbents in the media
sector. And newspaper podcasts, citizen-journalist websites and blogs
all offer alternatives to traditional broadcast or printed news.
New technology and rigorous competition are good things in any sector
and the Government will continue to champion these factors in media.
Of course, convergence poses a major challenge to existing business
models. One obvious question is what does this do to the long-standing
– and very successful – funding model for commercial broadcasters: the
spot ad?
More and more people are time-shifting programmes, giving people
greater scope to skip ads.
5
Yet despite the doomsday predictions I do not believe such technology
will lead to the death of traditional broadcast advertising.
But there is an inherent challenge to broadcasters and advertisers to
become better at what they do. To embrace the opportunities the
technology provides to personalise advertising and to adopt innovative
new methods of selling.
New Media
The growth of new media technologies presents challenges like these to
the market. I It is crucial there is a fair distribution of rights between
creators and broadcasters.
As many of you will be aware, these issues were considered carefully in
Ofcom’s Review of the Television Production Sector, which was
published for consultation last week.
The Ofcom Review covered a number of important issues, including the
extent to which existing codes of practice have helped the market to
function more effectively, and the transparency of the commissioning
process.
I was pleased to note that Ofcom generally regard the Codes as working
well. But like other aspects of the regulatory environment convergence
is placing new and unique demands upon them
For example, there is clearly a lot of uncertainty within the industry
regarding new media rights, cross-platform distribution and the
exploitation of content originally commissioned for television. The
consensus seems to be that more clarity in this area is needed.
6
But I think it is important to set some context here. What the
Government wants to help create is an environment in which a myriad of
innovative, creative content producers can grow, coupled with robust
and dynamic broadcasters who distribute such content widely to eager
consumers.
I do not believe that the digital media rights debate is a mutually
exclusive equation, where the smaller independents or the incumbent
broadcaster should be favoured.
With the right approach, I see no reason why the content producer
shouldn’t receive fair and appropriate return for their material whilst
enabling the distributor/broadcaster to also generate the commercial
returns or distribution opportunities.
Ofcom are sceptical that regulatory intervention is the right tool to
achieve a solution here and I support that.
This is essentially a commercial negotiation that both parties need to
get right. I believe these issues can be resolved through industry
negotiation.
I would therefore encourage broadcasters and PACT to take up Ofcom’s
challenge to work together to find an outcome that all parties find
satisfactory.
Regulation - TVWF
Huge technological changes also raise questions about regulation and
the response of Government . Are existing regulatory mechanisms,
drawn up in world of linear transmissions, still relevant, appropriate and
effective?
7
These questions are currently being discussed in Europe because; just
as convergence shows no respect for traditional business models, nor
does it feel constrained by national borders.
As many of you will know, the European Commission recently published
their proposals for amending the Television Without Frontiers (TVWF)
Directive.
Like all of us the Commission have been grappling with convergence
and the extent to which content services which are now broadcast and
regulated as broadcasting might in future be delivered on demand.
Whilst there have been some welcome developments in the latest draft,
including the proposition to retain the principle that services are subject
to the regulation of their country of origin, the current Directive as a
whole is still unacceptable.
There is no better example of where Europe needs to face up to the
realities of globalisation and embrace the Lisbon agenda than on the
TVWF Directive.
With it we have a chance to create a modern and effective regulatory
regime that reinforces the principles of Lisbon and demonstrates
Europe’s commitment to creativity, technology and knowledge as the
bedrock of future economic success.
But if the Directive turns its back on wealth creation by imposing a
highly bureaucratic regulatory framework, there will be a clear
consequence: Holding back technological change and the development
of new markets. Then, I have to say, it will do immense and lasting
damage to Europe’s creative economy."
And I am not prepared to allow that to happen.
8
Because the UK’s media sector and other creative industries are the
jewel in our economic crown. Total revenues in the UK communications
market in 2004 were £55.9 billion, making up 4.1% of UK GDP. Radio
and broadcasting together make up over £11 billion of this figure.
And our creative industries added £56.5 bn to gross value added in
2003, growing at an average of 6% between 1997 and 2003 – almost
three times the rate of the economy as a whole.
The broadcasting and new media sectors are already contributing
increasingly to European growth and the creative industries have the
potential to significantly increase their contribution in the coming years.
But this can happen only if European law-makers ensure that the
regulatory environment sponsors and favours growth.
That is why Europe needs to be so careful not to impose unnecessary
regulatory burdens on the sector.
In addition, existing European and national law already delivers the
goals of the Directive. Issues like advertising regulation or protection of
minors are covered by national laws. And the E commerce directive
already ensures that they apply to Internet services, and that the
consumer has a clear route for redress.
If we want to apply further content regulation to the Internet than is
provided by the directive, then I believe the best approach is to rely as
far as possible on self-regulation.
So over the next year we will continue to discuss these difficult issues
with our colleagues across Europe – but we need industry to be doing
more, to be in there making the argument too, with your European
colleagues, and not just to the Commission but also to member state
governments.
9
Product placement
Finally on TVWF, many people have noticed that the Commission
proposal that Member States should have more latitude to allow product
placement to compensate for the threat to revenues from spot
advertising from PVRs or on-demand services.
This is an important issue and I welcome Ofcom’s decision to consult
upon it.
BBC and Charter Review
It is against this rapidly changing technological world that we are
reviewing the BBC’s charter. The forthcoming Charter Review White
Paper will develop the vision for a strong and independent BBC, which
we set out in the Green Paper last year.
The decisions we take now have to reflect technological convergence
and, whilst not predicting the future, seek to ensure that the BBC, and
other public service broadcasters are fully prepared for it.
We have to create the framework in which both the BBC and commercial
broadcasters can not only operate but flourish.
How then, should the BBC operate in a world so very different from the
one it found itself in when the Charter was last reviewed only ten years
ago?
Since its establishment the BBC has taken a leading role in opening up
the benefits of new technologies to mass audiences.
Our research
shows clearly that people expect the BBC to be at the forefront of new
10
developments: it is seen as a “trusted guide” to new technology and
the new experiences that new technology offers.
We want this role to continue and to develop, but in conjunction with an
equally vibrant, competitive and innovative commercial sector.
The BBC must have the flexibility to adapt to a constantly changing
media landscape over the next Charter period. It must be able not only
to react to changing audience expectations, but to anticipate and help
shape them.
I want the BBC to continue to be a major contributor to our nation’s
venture capital for creativity.
But – with this flexibility comes additional responsibility. The
relationship between the BBC and the wider market must also change to
reflect convergence and to reflect the evolution of the broadcast sector.
Because, if not framed in the right way, the enthusiasm and drive of the
BBC could stifle competition and innovation from other parts of the
broadcast environment. If that happens the expansion in consumer
choice which convergence promises will be put at risk.
That would not be good for our industry, and nor would it be welcomed
by consumers and licence fee payers.
So we must get the balance right with the White Paper: a balance which,
in many ways lies at the heart of this Charter Review.
We want a BBC
which is:
-
strong and independent, equipped to remain at the heart of public
service broadcasting over a period of unprecedented change
-
but which has a clearly defined place within a wider market in
which competition and choice are allowed to flourish.
11
That is why we will define the public purposes of the BBC more clearly
than ever before.
Why we need to strengthen its transparency and accountability to
licence fee payers.
And why we need to a new system of governance and regulation, which
delivers clear, robust scrutiny of the BBC’s activities in the public
interest.
Regulation to protect competition. Independence in the public interest.
The White Paper will confirm our intention to replace the old governance
structure with a BBC Trust and Executive Board – there will now be a
very clear separation between the Executive and the Trust - one body
responsible for delivering the BBC’s services and the other for holding it
to account.
The Green Paper set out the principles on which this new system will be
based. The White Paper, which we intend to publish by early March, will
confirm the detail.
There has been a consensus in the public debate around the BBC that
reform is needed and the principles put forward in the Green Paper were
broadly welcomed. But, understandably questions have been asked
about how these principles will be delivered in practice.
In particular, about whether the Trust model can really deliver objective
and independent oversight of the BBC’s services.
I am clear that it can.
The White Paper will make a reality of the clear separation of functions
between the Trust and Executive Board.
It will show how the Trust’s
12
key decisions will be based on evidence and consultation. How the
Trust will face outwards to licence fee payers and the industry, and how
it will work with Ofcom in areas such as competition and content
regulation.
I know there are questions about how effective the Trust can be in
bringing the interests of the wider market to bear on the BBC’s
activities.
About whether, in addition to the full force of ex-post
competition law, the BBC should also be subject to some form of exante framework. And about the role of Ofcom both in this area and in
assessing the potential market impact of new BBC activities.
As I have said, it is vital to combine flexibility for the BBC to deliver for
the licence fee payer, with tough objective regulation of its impact on
the wider market.
I am clear about the need for Ofcom to have a role in this, and for the
Trust to work in partnership with them to deliver it. Ofcom clearly has
unrivalled competition expertise in relation to the communications
markets, which it would be foolish to try and duplicate. But I am equally
clear about the importance of the Trust’s responsibility for upholding
the licence fee payer’s interests and securing the BBC’s public
purposes.
In the end, the success of the new arrangements – built on the new BBC
Trust and Executive Board – will be determined by a consensus, not
only amongst licence fee payers but also amongst industry - that the
BBC is helping make the UK environment one where both they and
commercial broadcasters can flourish.
The White Paper will also enshrine the BBC’s role as a champion for
media literacy.
Media Literacy
13
And that brings me to a favourite subject.
When the Communications Bill was published, it contained a specific
duty to promote media literacy.
I put it there.
Because I can think of fewer more important roles for a responsible
regulator. And convergence makes that task more urgent.
Even in the days of old media – the morning paper, a bit of light
entertainment then the 9 o’clock news - it mattered.
Because for the vast majority of us, the vast majority of the time, we see
or read about or hear the events and opinions that shape our lives. We
don’t experience them directly.
And that is more true in the age of wrap around converged media than it
ever was.
So we have to rely on the judgement and skill of others to show us the
world.
And learning how those “others” operate is a skill every citizen must
acquire.
Children should grow up challenging everything. Questioning
everything.
Because that is the only way to understand everything.
Making sure they do is a responsibility for the regulator. For the
industry. And most of all for the citizen.
14
As with all knowledge, passing it on is an active, not passive, verb.
I do not exaggerate when I say that media literacy in its widest sense is
as important to our development as was universal literacy in the 19 th
century.
Then, the written word was the only passport to knowledge.
Now, there are many more. And the most insidious digital divide is
between those equipped to understand that and those who aren’t.
Traditionally, we have been hampered by insufficient knowledge of
media literacy needs when developing policy on broadcasting and
telecommunications. We have had partial information, sector by sector,
but no comprehensive view of take-up, understanding and use.
Ofcom’s audit on media literacy to be published next month will address
that – in a world –first study. Their key questions address where people
are now in terms of their media uptake, usage and understanding, where
they would like to be and what Ofcom and stake holders – you – can do
to enable them to get there. This will provide a framework for action not
just on media literacy, but on developing technologies, products and
marketing strategies.
This will provide an excellent opportunity to build on the industry’s work
in the Media literacy Task Force.
I very much welcome the work undertaken by the Task Force and its
development of the Charter launched last autumn. The Charter provides
an opportunity for the media industries to encourage active and
engaged citizenship and the safe use of the full range of developing
15
technologies. I urge you all to look at the Charter and see if your
company can sign up.
Media Literacy is also an essential tool of modern citizenship. The more
confidence people have in their use of media, the more effectively and
creatively they will engage with it, and this creativity benefits
broadcasters and other content creators by feeding back into new
creators and new content. So media literacy is crucial to widening
access to skills and deriving a dynamic, successful creative economy.
That is why the forthcoming BBC White Paper will recognise the
importance of media literacy and give the BBC a stronger role in
promoting media literacy and active citizenship.
Conclusion
I want to end where I began. The future.
The pace of change will not slow. It will intensify and we need to
harness it for our society’s and our economy’s benefit.
Britain is in pole position to benefit from this change. Like almost
nowhere else we could have the most innovative industry on earth
working in converged media that delivers the highest standards on
earth.
But only if we plan it that way. And only if all of us, including regulators
and Government, walk into that future with our eyes wide open.
Thank you.
16