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6 key issues that await Britain's new government


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6 key issues that await Britain's new government

As has been installed as thenew prime minister of the U.K., S&PGlobal Market Intelligence looks at a number of outstanding bills andlegislative measures across the media and communications landscape that will bedealt with by May and her new cabinet, which includes Karen Bradley asSecretary of State for Culture, Media and Sport.

Digital Economy Bill

Thedepartment for culture, media & sport's new Digital Economy Bill willenforce the legal right to fast 10Mbps broadband connection by 2020, among aswathe of measures designed to ensure Britain "remains at the forefront"of the global economy. Announced in the Queen's speech this yearand introduced by erstwhile Prime Minister David Cameron and former CultureSecretary John Whittingdale, the bill proposes to give Ofcom oversight of theBritish Broadcasting Corp.and harsher penalties for violations of online copyright laws. If passed, thebill also has severe implications for mobile networks. Under the proposals,Ofcom would be able to fine mobile networks a maximum of £20,000 a day, up to atotal sum of £2 million, in the event they fail to hit agreed service goals.


The new Digital Economy Bill also leaves the door wide openfor retransmissionfees in the U.K., reigniting a debateon whether U.K. pay TV operators Sky,'s and TV should have their retransprivileges curbed and be forced to pay public service broadcasters such as theBBC and Channel 4 for the distribution of their channels. Althoughthe government has indicated it will not support any move to charge retransfees and is keen to maintain a system of "no net payments," ITV ispushing for commercial negotiations on retrans fees with the main pay TVoperators. Both ITVand Channel 4 have campaigned long and hard for retrans fees, which they saidwould boost their investment in British programming.

BBC license fee loopholeclosure

TheresaMay's government will also be tasked with carrying out long-proposed reforms ofthe BBC as outlined by John Whittingdale earlier this year. Some of the keychanges include closing the iPlayer "loophole" and making it arequirement for online viewers of BBC's on-demand programs to obtain a TVlicense and pay the so-called license fee. The license fee will be valid for atleast 11 years and will increase in line with inflation until 2021-2022. TheBBC will also explore suggestions to make content available through asubscription-only offering, which will not replace its current license fee.And, following an independent review led by former Bank of England deputygovernor Sir David Clementi into the BBC's governance and regulatory structure,the BBC will henceforth be regulated by Ofcom.

Channel 4 privatization

TheBritish government confirmed a possible sale in November 2015, when Prime Minister David Cameronsaid he is looking at all possible options, including privatization, to securethe financial future of the public broadcaster. The announcement of theprivatization, potentially worth as much as £1 billion, fueled speculation overwho may go after the broadcaster. Potential bidders that have emerged includeSky, Disney, VirginMedia and Discovery,among others. The move has been met with fierce opposition from TVbosses, most notably Channel 4 Chief Executive . A House of Lords selectcommittee on communications argued privatization would pose more risks thanbenefits to the public broadcaster in terms of its remit and commitment tosupport independent producers, among others.

Snoopers' charter

Earlierthis year, the British House of Commons approved the controversial Investigatory Powers Bill,dubbed the "Snoopers' Charter." The legislation, which plans toincrease the remit of the British government's ability to privatecommunications and individual, was proposed by Theresa May, then home secretary.The bill has come under heavy criticism of privacy infringement by civil rightsgroups, lawmakers and tech companies, and will be reviewed by legal experts,followed by a vote by the House of Lords in the fall. A group of MPs challengedthe proposals in the European Court of Justice, which last week ruled the billis compatible with EU law. This is relevant as the U.K. will still be a fullmember of the EU for at least the next two to three years. If passed, the lawwill take effect January 2017.

PotentialBT-Openreach spinoff

Ofcom is set to deliver its verdict in the long-runningreview of how BT should improve performance at its Openreach division in orderto avoid being broken up. Ofcom Chief Executive Sharon White had previouslysaid maintaining Openreach's status as British Telecom's infrastructure arm wasunlikely to continue. Meanwhile a culture, media and sport select committee inparliament recently found the telecoms group not only "exploited itsposition" but is also "significantly under investing" inOpenreach. The committee is demanding Britain's biggest telecoms provider putits house in order or face a split. BT has already offered to puttogether an independent board and chairman to run Openreach in attempt toappease the regulator, Ofcom, and its rivals. The longstanding debate hasdivided opinions. Sky, TalkTalk and Vodafone have long for a separation of BT fromOpenreach, stating the structure presents an unfair advantage for BT. On the other hand, Virgin MediaCEO Tom Mockridge has argued against a BT-Openreach breakup.