Analysis: Ofcom to give BBC remit for universal Net access?

The government has acknowledged that the archaic rules for regulating broadcasting, telecoms and the Internet need to be updated for the converged world and so has created Ofcom. And while it may finally find a solution for getting the UK online, even a super regulator faces an uphill struggle to unite the industries it has been charged with overseeing.

First and probably the most difficult task facing Ofcom will be making universal Internet access available by 2005, as promised by Labour. At least one analyst believes there is an intriguing clue in Tuesday's White Paper as to how the new watchdog intends to achieve its goal.

In short, the government may want to lay off regulating the BBC in order to keep the UK's only public broadcaster sweet. So says analyst Andrew Curry of research firm the Henley Centre

"It may be the government sees the BBC as the best vehicle to deliver universal Net access," he says.

The government is committed to universal Internet access by 2005 but with many reluctant or unable to pay for a PC, it is generally believed its vision can only be fulfilled through television. With the BBC available to all homes with a TV set, it is, according to Curry, the perfect vehicle to deliver email and online access to the nation.

It is not just the BBC that will benefit from the new super regulator. Curry thinks all TV companies will have reason to smile because Ofcom -- which will take on responsibilities currently carried Oftel, the Independent Television Commission, the Broadcasting Standards Commission, the Radio Authority and the Radio Communications Agency -- will actually reduce the rules and regulations governing TV.

Under current rules, independent television companies providing content for ITV are not allowed to earn more than 15 percent of the total advertising revenue and no one company is allowed to own both regional weekend and daytime content. Those restrictions will be swept away by Ofcom.

For Curry Ofcom is an acknowledgment that television is no longer the only or indeed the most important mass media for the nation. "In the sixties and seventies -- when TV was the main kind of mass media for most people -- the government was very keen to regulate. Now it is saying television is becoming less important and we don't need to control it so much," he says.

It should be noted though that there is no indication Ofcom will be any less tough on the rules governing the mix of editorial and advertising content. For broadcasters keen to cash in on clickthrough to adverts from TV programs, the super-regulator may prove as big a wall as the current Independent Television Commission (ITC).

But all the while broadcasters are offering toasts to their new regulator, spare a thought for the embattled telecoms regulator Oftel which had hoped to oversee the new body. Oftel has attracted severe and repeated criticism for failing to act quickly enough over controversial issues such as unmetered Internet access and local loop unbundling. Perhaps for its consistently and well publicised incompetence David Edmonds' charge will now be assimilated by the encompassing Ofcom -- leaving the director general's future somewhat uncertain.

The government remains cagey over the details but confirms that Oftel will be merged and the job of chairman of the newly created Ofcom will be up for grabs. "Oftel will be merged into the new company. I can't say what David Edmond's role will be within it," says a spokeswoman for the Department of Culture, Media and Sport (DCMS), the brains behind Ofcom. "We will advertise for someone with relevant experience."

Analyst with GartnerGroup Adam Daum is convinced Oftel's past record is evidence enough it should not be chosen to oversee the new regulator. " Oftel has received a lot of bad press. If Ofcom is to have credibility it has to be conceived as something completely new," he says.

So who will be given the tricky job of heading up this huge, influential organisation? It has to be someone with both a big personality and a good knowledge of both telecoms and broadcast says Daum or else there will be big trouble. "There is an obvious danger it is going to be a turf war without a powerful personality," he says.

Analyst with Jupiter Nick Jones agrees that a turf war between the different regulators is a very real possibility and worries that far from being an integrated body, Ofcom could be a disparate collection of watchdogs with their own agendas.

The government dismisses suggestions of infighting, and promises a smooth ride. "There won't be turf wars. Everyone is working together to establish rules and codes and each regulator will have an input. One would assume there would be no conflict," says the DCMS spokeswoman.

While no-one can doubt that Ofcom is about to become one of the most powerful regulators in the UK, there are question marks over whether bigger is necessarily better. In an interview with ZDNet News David Edmonds admitted that the nature of regulation -- having to report to government and consult with industry -- puts watchdogs frustratingly out of step with Intenet time. So will the new body also come complete with a new Internet time approach?

The government says yes.

"The whole point of a single regulator is to simplify regulation. Existing regulators can be quite restricted and the idea of Ofcom is to make it more up to date and up to speed," says the DMSC spokeswoman.

Oftel is confident the physical nature of Ofcom will improve the paperwork. "It is by its nature larger but I wouldn't say that means more bureaucracy. If we are all under one roof communication will improve," says an Oftel spokeswoman.

Ofcom's competence will ultimately be tested by consumers who want the best deal for their money. Oftel, for one, is confident they won't be dissapointed. "Consumers should have a better deal," it promises.

Homechoice -- which provides video-on-demand over ADSL -- is cited by the telecoms watchdog as a perfect example of the way telecoms and broadcasting are currently converging but some customers have complained that they have not got the service to work. The problem, they say, is compounded by the fact that BT provides the infrastructure and Homechoice provides the content and the set top box.

The road to convergence may not always be a smooth one and we can only wait to see what difference Ofcom will make.

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