Broadcasting Acts 1990 and 1996
Schedule 2 to the Broadcasting Act 1996 amends earlier ownership provisions in Schedule 2 to the Broadcasting Act 1990. Provisions in the new Act came into force on 1 November 1996.
Compliance. Section 5 of the 1990 Act, as amended by the 1996 Act, requires the ITC to do all it can to see that licensees comply with the ownership rules. The licensee’s failure to comply may lead to the imposition of sanctions.
Control. The 1996 Act introduces a new definition of control allowing the ITC to determine that a person controls an enterprise if ‘it is reasonable, having regard to all the circumstances, to expect that he will be able, by whatever means and whether directly or indirectly, to achieve the result that the affairs of the body are conducted in accordance with his wishes’. The ITC has also been given specific powers to determine whether a deadlocked company is controlled by either of the participants.
Connected persons. Limitations on ownership which apply to the holder of a licence generally apply to any connected person. These include a person who controls the licence holder, an associate of the licence holder or a person who controls the licence holder and a body which is controlled by the licence holder or by an associate of the licence holder.
Disqualification. Schedule 2 lists persons who are disqualified from holding broadcasting licences. Persons or companies based or registered outside of the European Economic Area may not hold a licence for a channel 3 service, channel 5, or a restricted service. There are no foreign ownership restrictions on the ownership of local delivery services, satellite television services (STS), licensable programme services (LPS), additional service licences (other than the public teletext service), television multiplex services and digital programme services. No licence may be held by a local authority, a religious body, political body or advertising agency. The 1990 Act disqualifies the holding of a channel 3 or channel 5 licence by the BBC and S4C although the ITC may, under the 1996 Act, licence services provided by companies in which the BBC has controlling interests. The ITC can determine that it is appropriate for a religious body to hold an STS or LPS licence under certain circumstances.
Accumulation of broadcasting interests
The 1996 Act abolished numerical limits on the holding of television licences, although restrictions remain on the common control of a national Channel 3 service and Channel 5, and regional Channel 3 services provided for the same area. Generally, apart from these restrictions, holdings will now be restricted to 15% of audience share.
Under this new rule, no person may hold licences for or have ‘qualifying’ interests in television programme services whose share together exceeds 15% of the total television audience. This control serves to limit the aggregation of interests in licences to provide:
· Regional channel 3 and national channel 3 services
· Channel 5
· Satellite television services
· Licensable programme services
· Digital programme services
The limit does not apply to the BBC, Channel 4 and S4C, although the audience of such services is included in the total when attributing audience share to commercial television licences.
Allocation of audience share. The holder of a licence is attributed the audience time for that service and a person with a ‘qualifying interest’ (an interest of more than 20% but not control) is attributed half the audience share for that service.
Digital multiplex services. No person may hold more than 3 licences to provide television multiplex services. A person who holds 3 such licences is limited to a 20% interest in a fourth multiplex licence. A person who has more than a 20% interest in a television multiplex licence is subject to the same restrictions as a person who controls a licence.
Digital programme services. The digital points scheme introduced by the 1996 Act to prevent an accumulation of interests in programme services across digital multiplexes was abolished by Order of the Secretary of State in 2000.
Cross-media ownership
National TV and radio licences. The 1996 Act prevents a person who holds a licence to provide a national channel 3 service or channel 5 from controlling a licence to provide a national radio service.
Local and regional TV and radio licences. The 1996 Act also prevents a person who holds a licence to provide a regional channel 3 service from holding a local radio service or a local digital sound programme service licence where the coverage area is to a significant extent the same.
TV licences and national newspapers. A person who runs a national newspaper group which has a national market share of 20% or more may not control licences to provide a regional or national channel 3 service or channel 5. There is no such restriction on them controlling licences for local delivery services, licensable programme services, satellite television services, restricted services, digital multiplex services and digital programme services. If a newspaper publisher does have a 20% market share or more it is prevented from having more than a 20% interest in regional and national channel 3 services and channel 5.
Newspaper groups with less than a 20% national market share may apply to control licences to provide a regional or national channel 3 service or channel 5, subject to satisfying a public interest test.
Local newspapers. A local newspaper group with more than 20% of local market share in the relevant area may not control a licence to provide a regional channel 3 service in that area. Those with less than a 20% share in the relevant area may control such a licence subject to satisfying a public interest test. The test would also apply if a local newspaper group wished to control a national channel 3 service or channel 5, but would not apply if it wished to control a regional channel 3 service whose broadcast area is wholly outside of the group’s circulation areas.
Local newspaper groups are also prohibited from providing a local digital television programme service if they have more than 20% of local market share in the coverage area of that service (groups with less than 20% may provide such digital services).
The public interest test. The 1996 Act provides for the ITC to consider whether cross-holdings between newspaper publishers and terrestrial television licensees operate, or could be expected to operate, against the public interest. This public interest test can be applied: on the grant of a channel 3 or channel 5 licence; as a result of a change in control taking place; or in the case of a proposal for a change of control, as a result of a notice being served on the ITC.
Further references
ITC Publications
ITC notes 2-38 cover all aspects of the ITC’s functions and activities
Memorandum on media ownership. ITC. 2 March 1994
External Publications
Broadcasting Act 1990. London: HMSO, 1990
Broadcasting Act 1996. London: HMSO, 1996
The Broadcasting (Restrictions on the Holding of Licences) Order 1991. (S.I. 1991/1176). London: HMSO, 1991
The Broadcasting (Restrictions on the Holding of Licences) (Amendment) Order 1993. (S.I. 1993/3199). London: HMSO, 1993
The Broadcasting (Restrictions on the Holding of Licences) (Amendment) Order 1995. (S.I. 1995/1924). London: HMSO, 1995
The Television Broadcasting Regulations 1998 (S.I. 1998/3196) London: Stationery Office, 1999
DEPARTMENT OF NATIONAL HERITAGE. Media ownership: the Government’s proposals. (Cm 2872) London: HMSO, 1995
DEPARTMENT OF NATIONAL HERITAGE. Media ownership regulation. An explanatory guide to the provisions in the Broadcasting Acts 1990 and 1996. London: DNH, 1996
The Broadcasting (Limit in Relation to Provision of Digital Programme Services) Order 2000 (S.I. 2913/2000)
April 2003
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