Mr. Jon Zeff:

From our point of view, this is not a question around the importance of public service broadcasting. Indeed, I have spent many years of my career thinking about questions in the UK Government around how to ensure the sustainability of public service broadcasting. What we did in our analysis was to look at the practical consequences and risks around the introduction of retransmission fees. We have seen there are a number of quite significant risks around it. In particular, the international experience where retransmission fees exist, particularly from the US but also from markets like that of Italy, is that there are a lot of commercial disputes. In fact, in the US, blackouts of channels from pay platforms are very common as a result, with some 800 blackouts since 2010. Many of the pay platforms in the US, when they pay retransmission fees, add an explicit charge onto their bills for consumers. Members will see on page 5 of our submission that we have pulled out an example of that. We think there is a particular risk that this will be seen, by most consumers, as a double charge for channels they have already paid for. This risks undermining support for the licence fee and the public service broadcasting system it is supposed to support.

Modelling of the outcome is almost impossible to do. In fact, Mathew Horsman of Mediatique said very clearly when he was before this committee earlier in the year that it is impossible in practice to predict the outcome of the commercial negotiations. When the Department for Culture, Media and Sport looked at this in the UK and looked at the modelling of potential outcomes of commercial negotiations around retransmission fees, it came up with a very wide range of possible results, including substantial payments to the broadcasters, but also including the possibility that it would end up with substantial payments from the broadcasters to the platforms. The other point to make is that retransmission fees, as we know, are incompatible with the current must-carry framework, which means they put at risk the universal availability of public service platforms, which I would see as one of the key fundamental principles that underpins public service broadcasting.

Those are essentially the reasons the UK Government rejected the introduction of retransmission fees, having considered this over a two-year process through consultation, consideration and independent analysis. It felt it would not be a practical way of supporting the future of public service broadcasting.