The government's long-awaited Draft Media Bill was published on 29 March 2023. As anticipated, the Bill extends the current prominence regime for public service broadcasters (PSBs) beyond linear TV to include online viewing. According to Culture Secretary Lucy Frazer's Ministerial Statement, the Bill will "[m]ake sure public service broadcast content is always carried and easy to find for UK audiences on connected devices and major online platforms, including on Smart TVs, set-top boxes and streaming sticks, so audiences can easily access this content in the way that best suits them".
In this article we examine the scope and requirements of the new regime, and whether it strikes the right balance between PSBs' interests and services' ability to innovate to serve their customers. For the Bill's requirements for VOD services and voice-activated radio selection services, see our articles here and here.
Scope of the new regime
PSBs
The Bill attaches to "internet programme services" provided by the BBC, another PSB, or their subsidiaries. Except in the case of the BBC, the service will need to be designated by Ofcom. This means BBC iPlayer will automatically be covered but other on-demand programme services provided by PSBs, like ITVX, Channel4, My5 and Britbox, won't. Instead, they will need to sufficiently fulfil a public service remit in order to be designated. Only services whose principal purpose is the provision of visual programming are in scope, which excludes services like BBC Sounds that primarily offer audio content.
TV services
The Bill attaches to designated "television selection services", meaning services:
- (i) provided over the internet
- (ii) in connection with "internet television equipment" (which will be specified in secondary legislation)
- (iii) that consist of the presentation of internet programme services, and
- (iv) that enable users to select between internet programme services or the programmes within them, and access the service or programme selected.
The breadth of services potentially affected will depend on how "internet television equipment" is defined in regulations. This will likely include the types of equipment specified by the Culture Secretary in her Ministerial Statement, namely Smart TVs, set-top boxes and streaming sticks. It is less clear whether non-TV-specific equipment like computers, smartphones and tablets will be included, and therefore whether TV aggregation services that are browser- and mobile-only could fall within scope.
In order to be regulated under the Bill, television selection services need to be designated by, or of a type specified in, secondary legislation. The precise services in scope are therefore still unknown.
'Must Offer'/'Must Carry' and prominence obligations
PSBs
PSBs must offer their designated internet programme services (IPSs) as being available to regulated television services (TVSSs), subject to agreeing terms, and do their best to ensure that their IPSs are included in those TVSSs.
In doing so they will need to act consistently with the following "agreement objectives":
- That the IPS is given an appropriate degree of prominence within the TVSS, including appropriate prominence being given to public service remit content and channels
- That the arrangements made are such that the PSB is able to meet the costs of fulfilling its relevant public service remit, and
- That the arrangements made do not disproportionately restrict how a TVSS provider may make innovations in the ways that users may select and access IPSs or programmes included in them.
The detail of how PSBs and TV services may act consistently with agreement objectives will be set out in guidance published by Ofcom, and the guidance is therefore likely to be the most crucial piece of the new regime.
TV services
TV services must enter into and keep in force arrangements to include each IPS in their TVSS. Like PSBs, they must act consistently with the "agreement objectives". They are also subject to a separate obligation to ensure that IPSs, and the public service content and channels within them, are presented to users with an appropriate degree of prominence, which appears to duplicate the "agreement objective" on prominence. Ofcom will again be tasked with issuing a code of practice describing recommended actions for compliance, which will provide a safe harbour rather than mandatory requirements.
TVSS providers must also incorporate accessibility features in their services so that persons with disabilities affecting their sight and/or hearing are able, so far as practicable, to make use of the service for the same purposes as persons without disabilities.
Dispute resolution, enforcement and sanctions
In addition to a traditional supervisory role, Ofcom also has a new dispute resolution function to help break stalemates in negotiations as a measure of last resort. PSBs and TV services can refer disputes over prominence arrangements to Ofcom if there is no other realistic prospect of resolving the dispute. In this role, Ofcom can issue declarations of the parties' rights and obligations, give directions fixing terms and conditions or monetary payments, and order interim measures pending its final decision.
Ofcom is also responsible for taking enforcement action against TV services for non-compliance with their obligations under the Bill. This can potentially culminate in a requirement for the service to take particular steps or pay a fine amounting to the greater of £250,000 or 5% of qualifying worldwide revenue. There is no equivalent in the Bill for non-compliance by PSBs, presumably because the consequence of their non-compliance is intended to be governed by the existing licensing regime that applies to them.
Ofcom may require PSBs and/or TV services to pay a fee to cover its costs of carrying out its functions under the Bill.
What are the issues with the proposed regime?
The Bill comes at a time where, even without a formal online prominence regime, PSBs may make extensive demands on TV services in relation to the placement of their content. Services may resist these on the basis that PSBs should not become de-facto product managers or UI designers, or require carriage and prominence for their non-public service offerings as a condition to licensing public service content. The Bill has the potential to help resolve these issues by increasing certainty as to what is expected from both PSBs and TV services but must draw the right balance between their interests.
There is an inherent tension between the "agreement objectives" set out in the Bill. The requirement for prominence to be given to public service content and channels (as opposed to simply requiring a prominent entry point into the service itself) is particularly difficult to reconcile with the freedom of services to innovate and improve their user experience. It has the potential (presumably unintended by legislators) to inappropriately extend prominence requirements to UI features like search results, recommendations, and personalisation features that users expect to be based on parameters such as relevance to their query or viewing history rather than the fact particular content is provided by a PSB. Ofcom will need to address these tensions in a manner that avoids unintended consequences for innovation and user experience.
With respect to TV services' separate prominence obligations, it is unclear what (if anything) this is intended to add to the 'must carry' obligation, since it is presumably not intended to place a stronger emphasis on prominence than is afforded by the "agreement objectives" taken as a whole. Ultimately much of the substance of the Bill's prominence obligations will rest on Ofcom's guidance. If drafted thoughtfully this could prove useful not only as a guide to what TV services should do to meet prominence requirements but also of when, in the face of increasing demands from PSBs, they have done enough.
Separate from Ofcom's role, there are examples of problematic imbalance in the Bill itself. The PSBs' 'must offer' obligation is qualified as being subject to the need to agree terms, and TV services' 'must carry' obligation should be similarly qualified. Also problematic is the imbalance of incentives resulting from onerous potential sanctions under the Bill for TV services, the threat of which may lead them to accept overly burdensome terms of carriage. Regardless of the imbalance, the maximum fine of 5% of qualifying worldwide revenue seems disproportionately high in this context (ie a Bill intended to benefit a small handful of broadcasters – compare this to the maximum fine of 4% of global turnover under the GDPR, which protects fundamental rights of individuals).
The CMS Committee has launched its pre-legislative scrutiny of the Bill, during which it has carried out a Call for Evidence and will consider the Bill's policy objectives, any unintended consequences, and how the Bill may be improved. Affected organisations will need to continue their public policy engagement with the government, legislators and Ofcom throughout the Bill's passage and beyond, given the importance of secondary legislation and Ofcom's guidance to the scope and substance of the regime.
