Opinion: “Fit and proper” regulation?” – Eleanor Steyn

28 09 2012

After an investigation spanning some 14 months, Ofcom ruled last week that British Sky Broadcasting Limited (BSkyB) was “fit and proper” to hold a broadcasting licence.  The overall decision is unsurprising, given that BSkyB has a good Ofcom compliance record and is a separate company from News Group Newspapers Limited (NGN), and James Murdoch is not the only director of British Sky Broadcasting Group plc (Sky), BSkyB’s parent company.

What is notable, however, is the extent to which Ofcom pronounced on James Murdoch’s conduct and the standards that can reasonably be expected of him as a director of Sky and of News Corporation.  Ofcom notes in its decision that: “In contrast to some other UK regulatory regimes, Ofcom does not have any statutory responsibility for declaring individuals ‘fit and proper’ (unless they are broadcast licensees themselves).

Nevertheless, it goes on to find that “James Murdoch’s conduct in relation to events at NGN repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman.” It is the first and so far the only time that Ofcom has opined on directors’ duties, an area which is generally regarded as being the preserve of the courts. News Corporation has stated that it disagrees “with certain of the report’s statements about James Murdoch’s prior actions as an executive and Director, which are not at all substantiated by evidence”.

Unlike the Leveson Inquiry, Ofcom does not have the power to compel witnesses to give evidence under oath in public. Nor can it compel those it does not regulate to provide documents or information. Ofcom’s investigatory powers are derived from the Communications Act 2003 and the Broadcasting Acts 1990 and 1996. Ofcom can require broadcasters to provide such “documents, accounts, returns, estimates, reports, notices or other information” as Ofcom may require for the purpose of exercising its statutory functions. The categories of information that broadcasters are frequently and routinely required to provide to Ofcom are financial information (including providing a statement of “qualifying revenue” to Ofcom on an annual basis) and recordings of programmes that are the subject of standards, fairness and/or privacy complaints, and other related documents (such as transcripts, rushes and correspondence with the complainant).

The evidence that Ofcom considered in reaching its decision in this case was, in particular, evidence published by the Culture, Media and Sport Select Committee, evidence published by the Leveson Inquiry and evidence provided to Ofcom by NGN. NGN is not a company that Ofcom regulates. Nonetheless, Ofcom sought voluntary disclosure of certain documents disclosed in the civil proceedings before Mr Justice Vos in order to “equip [itself] with all information relevant to [its] duty”. NGN provided the documents requested. Had NGN not done so, it is open to question whether Ofcom’s decision would have been different, or even if it would have felt able to reach a decision at all.

In the context of Lord Justice Leveson’s imminent recommendations on Part 1 of the Inquiry into Culture, Practice and Ethics of the Press, it is appropriate to consider whether Ofcom-style regulation could work for the press. Much has been made – by the press – of any kind of statutory regulation of the press as being a slippery slope towards state control of the media. This is, in my view, unnecessarily alarmist and unsustainable when compared with the vast and diverse array of content broadcast on television and on radio in the UK, under regulation by Ofcom. I do not believe that freedom of expression would be hampered by statutory regulation of the press or statutory underpinning of press regulation. Nor would it necessarily lead to an unjustifiable burden being placed on small newspapers. After all, many radio stations, which are subject to regulation by Ofcom, are run on a shoe-string and still manage to comply achieve compliance to a high standard. Having similar investigatory powers to Ofcom would, in my view, be beneficial for the press regulator. Ofcom’s investigatory powers may not be perfect but they are considerably more effective than the current powers of the PCC.

Eleanor Steyn is an associate at Michael Simkins LLP and specialises in reputation protection. She formerly worked for Ofcom.

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1 10 2012
Opinion: “Fit and proper” regulation?” – Eleanor Steyn | Media Law | Scoop.it

[...] After an investigation spanning some 14 months, Ofcom ruled last week that British Sky Broadcasting Limited (BSkyB) was “fit and proper” to hold a broadcasting licence.  The overall decision is uns…  [...]

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