57th MEETING OF THE OFCOM ADVISORY COMMITTEE FOR WALES. Wednesday, 3 February 2016 MINUTES

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1 57th MEETING OF THE OFCOM ADVISORY COMMITTEE FOR WALES Wednesday, 3 February 2016 MINUTES Present: John Davies (Chairman) Aled Eirug (Content Board Member for Wales) Glyn Mathias (Member) Nerys Evans (Member) Hywel Wiliam (Member) Huw Roberts (Member) Karen Lewis (Member) Jason Bryant - Executive Chairman, Nation Broadcasting Ltd Martin Mumford Managing Director, Nation Broadcasting Ltd Apologies: Rhys Evans (Communications Consumer Panel Member for Wales) Ofcom Staff: Cardiff Rhodri Williams, Director, Wales Elinor Williams, Regulatory Affairs Manager, Wales Nia Thomas, Regulatory Affairs Advisor, Wales London Mark Sweeney, Director of Government and Parliamentary Business via videoconference Liz Bates Principal, Policy Development; Neil Pratt Economic Director; Olivia Thompson Legal Advisor; Sophie Richings Associate, Policy Development Huw Saunders Director Network Infrastructure Neil Stock Head of Radio Policy; Matthew Bourne Programme Executive, Content Policy Ed Leighton Associate, Strategy; Alastair Goff Graduate, Strategy Rebecca Taylor Strategy Analyst; Ian Macrae Principal, Strategy; Puja Kalaria Associate, Strategy; David Michels Graduate, Strategy; Andrew Scoones Senior Associate, Government and Parliamentary Business Apologies: Dilip Roy Legal Advisor 1

2 Item 1: Chairman s Introduction & Apologies for Absence 1. The Chairman, John Davies, welcomed Members and Ofcom staff to the 57 th meeting of the Ofcom Advisory Committee for Wales (ACW). Apologies were received from Rhys Evans (Communications Consumer Panel Member for Wales). It was noted that Mark Sweeney (Director of Government and Parliamentary Business) would be present via videoconference. 2. The Chairman welcomed Aled Eirug, Content Board Member for Wales, to his first meeting. His appointment was made effective from 1 December The Chairman noted some last-minute changes to the agenda. Item 2: Minutes of the 56th Meeting & Matters Arising 4. The Minutes of the 56th meeting of the Ofcom Advisory Committee for Wales were reviewed and approved as a true and correct record of proceedings. 5. The actions from the previous meeting were reviewed. Matters arising/outstanding were as follows:- 6. ACW 56 (15) Minute 38 Nerys Evans thanked NT for providing the information on male to female ratio within Ofcom. She requested further information on the senior management target. ACTION: NT to send information to NE. 7. ACW 55 (15) Minute 56 Huw Roberts informed Members that he is yet to meet with the Channel 4 news team and asked to carry forward the action. ACTION: Carry forward action point. Item 3: Chairman s Report 8. The Chairman provided an oral update since the last Advisory Committee for Wales meeting in November. 9. He reported that the meeting between Ofcom, the four mobile network operators and Assembly Member for Montgomeryshire, Russell George, which took place in Newtown on 13 November, was extremely beneficial for all involved. He added that Elinor Williams would discuss the outcome of the meeting in more detail during item The Chairman highlighted the success of Ofcom s Proposed Annual Plan stakeholder event in Cardiff on 26 January which he said was well attended. He noted some of the matters raised during the discussion which included the take-up of broadband being as important as its availability and concerns regarding the transmission of BBC Radio Wales and BBC Radio Cymru in Mid Wales. 11. Members were given details of the Nations Committee which took place in December. The Chairman said that the Committee discussed the function of the meeting and it was agreed that Members would appreciate more clarity on the advice given to and for the nations. He noted that Channel 4 delivered the same presentation to the Nations Committee as was provided at the last ACW meeting and that the definition of the Government broadband USO was discussed. 2

3 12. The Chairman made reference to the item on spectrum which he said was both interesting and useful. He suggested that ACW members may be interested in seeing the slides. ACTION: NT to circulate slides on spectrum to ACW Members. 13. He informed Members that he had written to Chair of the Nations Committee, Dame Lynne Brindley, outlining his views regarding the BT/Openreach split which is being considered as part of Ofcom s Strategic Review of Digital Communications. He said he was advised by the Chair to attend a meeting with Clive Carter and Steve Unger, which he said had now taken place. 14. The Chairman extended his thanks and appreciation on behalf of the Committee to Graham Howell, Secretary to the Corporation, who would be leaving Ofcom in March. He noted that Graham has been with Ofcom since its formation twelve years ago. Item 4: Report Communications Consumer Panel Member for Wales 15. In Rhys Evans absence, the Chairman said that the Communications Consumer Panel has started the process of creating a new work plan and that ACW Members are welcome to provide their input to the plan. ACTION: Circulate work plan to ACW Members. Item 5: Discussion Policy and Management Board meeting 16. Elinor Williams informed Members that Ofcom s Policy and Management Board would be holding its meeting at the Cardiff office on 11 February and that the ACW has been invited to discuss three of the main issues for Wales for the forthcoming year. 17. The Chairman, John Davies, highlighted his three main priorities; plurality of media coverage, mobile coverage and the implementation of the new Welsh Language Standards. He asked the Committee for their views on his proposals. Members agreed with the three priorities. 18. Karen Lewis asked for more details on the Welsh Language Commissioner s proposals and John Davies briefly explained what the new Standards could mean for Ofcom. 19. Elinor Williams noted that the Welsh Language Standards in Round 2 would be debated at the National Assembly for Wales on 9 February. She said that the Welsh Language Commissioner would then proceed with formulating the compliance notices for the 32 named organisations, including Ofcom, stipulating which standards they are required to provide in Welsh. She said that each organisation would then have an opportunity to provide detailed evidence in support of, or challenging the standards (on the grounds that they are disproportionate and/or unreasonable) outlined in the compliance notice. 20. Aled Eirug asked whether Ofcom has discussed the Standards with other organisations in Round 2 whose headquarters are in London but have offices in Wales. He suggested that discussions with organisations in a similar position could be useful for Ofcom. 21. The Chairman raised the Committee s awareness to how the Standards could mean an increase in work load for the team in Wales and would have cost implications for Ofcom. 22. The Committee agreed to discuss media plurality first at the PMB meeting followed by media coverage and then Welsh language matters. Elinor Williams added that she would be addressing PMB on the Welsh Language Standards in an individual item. 3

4 Item 6: Feedback Huw Roberts on the Postal Review 23. Huw Roberts informed the Committee that he had met with Chris Rowsell, Competition Policy Director, and project director of the Review of the Regulation of the Royal Mail, to provide some input and advice. He noted that the meeting was extremely useful for both parties. 24. Huw noted that one part of the review focuses on the concerns regarding end-to-end letter delivery following the departure of Royal Mail s only rival competitor, Whistl. 25. He explained that Ofcom is concerned that Royal Mail has ramped up prices for the delivery of post in rural parts of the UK instead of considering bringing down the prices where Whistl was providing its service. He said it is concerning that Royal Mail is using pricing powers to affect the price of competition. 26. He told the Committee that he had made Chris aware of Wales tradition of distant selling in view of the overall sparsity of population which exists in Wales. He suggested that while there is an increase in sales through the effective deployment of superfast broadband across Wales, he is concerned about a reduction in the capacity to deliver the goods. 27. He noted that Chris considers distant selling as a characteristic which is common in rural England and Scotland and is not an issue that s exclusive to Wales, but added that Wales could provide an exemplar of what could go wrong and what could happen. 28. Huw noted that the discussion also focussed on parcel regulation and said that both he and Chris agreed that more could be done to ensure efficient competition in the parcel sector. He said that Ofcom recognises that, under the current policy, Royal Mail could start charging differentially to where they deliver which could have a significant impact on small businesses in Wales. 29. Finally, he told the Committee that he had drawn Chris attention to the deployment of superfast broadband in Cornwall and explained that he and John Davies are on the Welsh Government Superfast Broadband Business Exploitation Programme. He said he had suggested to Chris that Ofcom could benefit from finding out more about how the roll-out is working in Cornwall. 30. The Chairman asked whether the project team conducting the review considers Royal Mail as a natural monopoly following its privatisation. Huw noted that the team is considering all the issues carefully and would be ready to inform Government if the evidence grew to suggest that competition was being distorted. Item 7: Report Director, Wales 31. Rhodri Williams, Director of Wales, had circulated his report ahead of the meeting which was taken as read. 32. In addition to the paper, Rhodri Williams discussed some of the recommendations made as part of the BBC Trust s consultation on BBC Nations radio and news. He said the proposals include suggestions on ways to improve coverage of BBC Radio Cymru and BBC Radio Wales in parts of Mid Wales. 4

5 33. Hywel Wiliam asked whether there are any maps to show coverage of the services in Mid Wales. Rhodri said that he could share maps with Members to show how coverage might be improved. ACTION: RW to share maps with Members. 34. Karen Lewis suggested that Ofcom could carry out audience research in Mid Wales to find out whether BBC Radio Wales and BBC Radio Cymru are being prioritised by listeners over other BBC radio services in the area. 35. Rhodri discussed the content of the latest Welsh Government Next Generation Broadband in Wales meeting. He noted that more money has been made available with the extension of the two schemes; Access Broadband Cymru and the Ultrafast Connectivity Voucher Scheme. 36. He added that while there is a general feeling among members of the Board that broadband is being rolled out at a good rate, there are concerns regarding mobile coverage. 37. Members were informed of the agreement between the Government and the MNOs to review the Electronic Communications Code. He added that Carl Sargeant had recently written to Russell George AM asking for evidence from the MNOs regarding the current planning regime. 38. Elinor Williams proceeded to give a short update on the problems with mobile signals which made headlines in Newtown before Christmas. She emphasised that the problems are linked to capacity issues and not coverage and that EE are in the process of rolling out 4G in the area. She added that EE had agreed at the meeting in Newtown in November, to provide their customers with femtocells while they made their improvements. However, she informed Members that she has received evidence from customers who are still waiting for the femtocells. 39. The Committee was interested in hearing the latest position with regard to local TV following the departure of Made in Cardiff s station manager, Bryn Roberts. Rhodri Williams noted that the operations in Mold and Swansea are due to launch shortly. 40. Hywel Wiliam asked whether the local TV operation in Mold is being extended to Wrexham. Rhodri Williams confirmed that Comux is awaiting further information from the DCMS regarding the funding of the extension before making a decision. 41. The Committee asked for an update on the process to appoint a Welsh member to the Ofcom Board. Rhodri Williams said that the appointment is dependent on the Wales Bill. He added that the Board is happy to appoint members from all nations, however the timing of when this happens is out of Ofcom s control. 42. Karen Lewis made reference to the Digital Communities Wales project and suggested that the Committee may enjoy learning more about the development of the project from a Welsh Government representative. She added that she would be interested in providing input to the Ofcom Media Literacy e-bulletin. 5

6 Item 8: Government Broadband USO 43. The Chairman welcomed the project team via videoconference. A paper providing information on the Government Broadband USO had been circulated ahead of the meeting. The team welcomed any questions from Members. 44. Liz Bates informed Members that the team has been consulting and generating thoughts to inform Government. She added that they did not know at this stage how the USO will look. 45. Glyn Mathias asked about the speed requirement of the USO. Liz Bates said it will almost certainly be implemented with a download speed obligation of 10Mbit/s (the speed which Ofcom believes a typical household now requires) but added that the team is building an evidence base on other issues such as upload speed and latency. 46. There was a question on whether consumers without superfast broadband would be entitled to the 10Mbit/s speed or whether they would be obliged to pay extra for superfast broadband. Liz Bates said that the current focus is on those who cannot access 10Mbit/s. 47. Neil Pratt drew attention to other related questions which the team is considering such as whether to set the USO at a retail or wholesale level. If set on a retail level, he said there is a question on whether customers will be able to get a choice of retailer. 48. The Chairman noted that getting the USO to remote areas could mean using multiple technologies. He added that the USO could place a burden on providers within the wholesale market. Neil Pratt said that the team is currently waiting for more clarity on the specifications. 49. There was a discussion on the implementation of the USO in Wales and the Chairman noted the method at which the Welsh Government will soon be rolling out superfast broadband to the final 4% in Wales. He suggested that the team could use the Welsh Government s method as an exemplar for the roll-out of the USO. 50. Glyn Mathias raised concerns about having one designated provider for the USO and suggested that different providers should be considered. Liz Bates added that the Government will decide on how and what will be implemented before the regulatory process is delegated to Ofcom. Huw Roberts noted that one single provider could charge highly for providing the USO, ultimately generating high costs for consumers. 51. Liz Bates discussed the issue of pricing and said there is a scope within the framework for the USO to be affordable. She added that it could be set at a uniform price. 52. Karen Lewis asked about Ofcom s thinking in terms of providing consumers with the necessary information on how they can access and receive the USO. Liz Bates said that Ofcom will be raising awareness and informing consumers as and when the USO comes into force. Item 9: Report, Content Board Member for Wales 6

7 53. Aled Eirug, the new Content Board Member for Wales, addressed the Committee for the first time in his new role. Aled was appointed as Wales new Content Board Member in December He informed the Committee that the Content Board meeting scheduled for January did not take place. He added that Bill Emmett has now been appointed Chair of the Content Board and that he would be chairing his first meeting at the end of February. 55. Aled discussed some of the key challenges for Wales including issues on plurality and the future funding of S4C. 56. He said he is looking forward to the challenge of representing Wales on the Content Board during a period of great change, and speculation of additional regulatory responsibilities being passed to Ofcom as part of the new BBC Charter. Item 10: Report Director, Government and Regulatory Affairs 57. Mark Sweeney (on videoconference) had circulated his update ahead of the meeting which he took as read. 58. In addition to the paper, Mark noted that Clementi is coming to the end of his review of the BBC Charter and that his recommendations would be made shortly. 59. Hywel Wiliam drew attention to the National Assembly for Wales elections and the campaigning work for both the NAfW elections and the EU referendum. Mark noted that the referendum broadcasts are designated by the electoral commission and said that Ofcom will be holding briefing sessions to inform broadcasters of the specifications in March. Item 11: Mobile Coverage update 60. Huw Saunders joined the meeting via videoconference. He informed the Committee that he is part of the team responsible for liaising with Government on the implementation of the broadband USO, and said he would be meeting with the Welsh Government shortly to discuss the matter. 61. He discussed the breakdown of the Mobile Infrastructure Project (MIP) in October 2015 which failed to erect any of the 27 masts planned for North Wales. 62. He drew attention to the 90% geographic coverage agreement with the mobile network operators (MNOs) and said that the Government is looking at reforming the Electronic Communications Code to help MNOs to fulfil that commitment. 63. Members were informed that the Department for Transport is responsible for improving mobile coverage on trains. He added that there are technology trials currently underway and that the results will then determine what interventions may be needed to improve coverage. 64. He added that the MNOs are also working to improve 4G coverage by 2017 and aiming to replace 2G voice coverage with 4G voice coverage fairly rapidly. He also added that Ofcom is working hard to ensure that consumers have the relevant information on switching and that the interactive maps which show network coverage of all four operators on the Ofcom website are being updated regularly for the benefit of consumers. 7

8 65. Hywel Wiliam said it would be useful if ACW Members were provided with a crib sheet of all the varying requirements for mobile coverage. ACTION: NT to provide crib sheet of data and circulate to ACW Members. 66. The Chairman asked whether Ofcom had any further information on the cost of the broadband USO to which Huw Saunders said that the team is currently looking at various technology options. The Chairman suggested sending a note to Huw Saunders of the points discussed during the item on the broadband USO. ACTION: Draft letter to send to HS Item 12: Nation Broadcasting Ltd 67. Jason Bryant, Executive Chairman, and Martin Mumford, Managing Director of Nation Broadcasting Ltd joined the meeting to give a presentation on some of the company s latest developments. 68. Jason Bryant informed the Committee that the company recently changed its name from Town and Country Broadcasting to Nation Broadcasting Ltd as part of a new brand and identity. 69. They outlined their plans to further expand St Hilary with the addition of four digital studios and added that commercial radio often gets a negative picture. They added that the development has meant a growth in staff at the site. 70. Jason Bryant discussed their new service, Nation Gold, which will be launched shortly on DAB. He added that the service will focus on playing some all-time greatest hits from the 70s, 80s and 90s. They also informed the Committee that Nation Hits would shortly be returning to its former name, Swansea Bay radio. 71. The Committee was interested in hearing about how DAB roll-out is progressing. Martin Mumford noted that the company is building out the transmitter network to implement five sites later this year which would bring DAB coverage up to 65%. He added that DAB growth in Wales is good but is far slower than in London for example and that most people in Wales listen to their radio services on FM. He noted that roll-out of Nation Radio in West Wales is progressing well. 72. Both Jason Bryant and Martin Mumford noted their support of the local coverage obligations for commercial radio and said that music output is not as important as it used to be. They stressed that speech broadcasts are extremely important and should contain local information for listeners, particularly in light of the recent decline in local print output in Wales. 73. There was a wider discussion on whether localness regulations should apply to services on analogue and digital radio. Jason Bryant said that regulations could be a barrier of entry for innovative services coming through who propose to provide broadcasts for the people of Wales but have their production facilities elsewhere. 74. Karen Lewis asked about the effect of changing demographics on radio services and what their thinking is with regard to online platforms. 8

9 75. Martin Mumford noted that listeners of their local services are growing older and that new younger audiences are not coming to replace them. He added that most young people are now busy with tablets and online material. To this, Jason Bryant said that Nation Broadcasting Ltd is looking to invest more in its own website considering the growing market for websites and online content. 76. Hywel Wiliam asked for more information on the possibility of a small-scale DAB option in Aberystwyth. Jason Bryant said they have been in conversation with Neil Stock, Ofcom Head of Radio Policy. He noted that small-scale in Wales is different because of the population density which exists in Wales. 77. Nerys Evans asked whether Nation Broadcasting Ltd is increasing its capacity to deliver Welsh news. Martin Mumford said they are employing journalists in St Hilary to look at ways to present relevant news in a better and more effective way. 78. There was a discussion on community radio in light of the BBC Nations consultation paper. Martin Mumford noted that Radio Pembrokeshire and Radio Ceredigion are already operating as community radio stations and are providing local content for listeners. Glyn Mathias suggested that commercial radio stations in Wales are at an advantage considering there are no local BBC radio services in Wales. Item 13: Localness Review 79. Neil Stock and Matthew Bourne joined the meeting via videoconference. They noted that they had no further information but would provide a short update on the latest position regarding Ofcom s options for Government on radio deregulation. 80. Neil Stock informed the Committee that Ofcom is in the process of drafting the letter to send to Ed Vaizey MP setting out the recommendations based on the extensive research carried out. He added that the research would be published on the Ofcom website but that it would be down to the Government to decide whether to publish the letter. 81. Glyn Mathias asked the team about the extent at which the information on the importance of local news output in Wales had been considered. Neil Stock said that all the information has been included as part of the options for Government. 82. The Committee briefly outlined the views of Nation Broadcasting Ltd and said that the company is already providing local news output on their services regardless of the regulatory measures. However, Nerys Evans said that services should be required to carry local news to reflect a devolved Wales. She added that unless provision is made for national news that there is a danger of sustaining a system where news provision is inaccurate and irrelevant and listeners will have a lack of understanding of the democratic process. 83. To this, Glyn Mathias summarised the Committee s main concern that the Government could introduce blanket regulation without considering the preferences of the nations. Neil Stock stressed that Ofcom would highlight their concerns in the letter to the DCMS. Glyn Mathias asked if the Committee could see the letter once it has been sent at which Neil Stock said he would discuss with colleagues and get back to the Committee in due course. ACTION: NT to chase letter. 9

10 84. The team informed the Committee that the next step in the process will be a DCMS consultation and that stakeholders will be invited to provide input and information on the options. Item 14: Strategic Review of Digital Communications 85. Ed Leighton, Alastair Goff and Andrew Scoones joined the meeting via videoconference. A short paper had been circulated to the Committee ahead of the meeting which was taken as read. 86. Ed Leighton noted that the team is providing short updates to all nations Advisory Committees at present but would be providing further details at the Nations Committee in March following the publication of the Strategic Review of Digital Communications. 87. The Chairman informed the team that he had met with the project sponsor, Steve Unger, and the project manager, Clive Carter, to discuss the implications of the separation of Openreach from BT. He added that Ofcom could impose separate quality of service requirements on BT. Ed Leighton noted that Ofcom has been carrying out substantial amount of work on the quality of service of both BT and Openreach and the details will be passed on following the publication. 88. Ed Leighton confirmed that the team has considered the points raised in the Welsh Government s response to the consultation. 89. Hywel Wiliam asked about Virgin Media and how the network has grown in Wales. Ed Leighton said that there has been little change in Wales but that 45% of the UK is able to access Virgin Media s network. However, he added that Virgin Media does not provide a competitive restraint on a retail level and further details of Ofcom s thinking on how best to provide competition will be included in the publication. Item 15: AOB & Items for future agendas 90. Nothing to report. Items For Information Date of next meeting 27 April 2016 Ofcom Advisory Committee for Wales 3 February 2016 Signed: Date: John Davies, Chairman, Ofcom Advisory Committee for Wales 10

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