OFCOM’s Peter Davies made the comments in front of a critical audience at the Radio Academy’s Radio At The Edge conference today. Davies was put on the spot by moderator James Ashton. After years of trying to put a brave face on DAB, the OFCOM man all but admitted the British radio industry now needed drastic action.

“Yes, it will require legislation,” he said, in order to restructure the industry, and lower costs, so that commercial operators could survive.

Davies acknowledged he’d have no choice if the commercial operators all decided to revolt en masse.

OFCOM effectively forces national operators onto DAB by making it a mandatory condition of a new 12 year analog license. But DAB is nothing but a millstone – costing about 10 times as much as analog to broadcast, and with very few listeners. If all the commercial operators handed in their DAB licenses back to OFCOM at once, what would the regulator do? Davies said that may be the cue for action. But he did warn that legislation took a year to pass through Parliament, so even if the broadcasters revolted tomorrow, it would be 2010 before

Asked if Britain hadn’t leapt into digital radio too early – the rest of the world is introducing more advanced and efficient standards – Davies said it didn’t really matter, as radios using a common profile would be technology-neutral. Which is too bad for those of us with plain old DAB.

So how low is DAB listenership?

One radio exec, Daniel Nathan of Brighton-based Juice, even went as far as suggesting that listenership was so low on the new digital stations, it might as well not go out over broadcast radio at all. Nathan pointed out that most get around 10,000 to 15,000 per half hour, and big hitters like BBC Radio 6 barely topped 50,000, with peaks of 61,000 on Saturday mornings.

“We might as well move them to IP,” he pointed out.

“Five years ago DAB looked like the future – but the world has moved on,” he said.

That was one one of the nicer things said about digital radio yesterday at yesterday’s Academy event.

The elephant in the room, internet radio, was represented by Darryl Pomicter of Radeo – a very tidy aggregator.

Pomicter was diplomatic. Internet radio would always be complementary to broadcast, he said, but let’s not delude ourselves that most consumer electronics media formats are not successful: Polavision and Betamax to name just two. There’s little justification for making radios that only pick up local broadcasts. So why not build in Wi-Fi, analog and DAB into new radios?

The Guardian Media Group’s Paul Fairburn wasn’t impressed by the argument (from the DAB lobby’s Tony Moretta) that radio operators should build visuals and other gimmicks into their DAB broadcasts to make DAB more multimediatastic.

“Don’t propose to us that we add to our costs by adding expensive bits now,” he responded.

BBC: Crisis? What crisis?

We should say that half of the audience was critical. The other half, drawn from various corners of the BBC, sat there very quietly, looking pretty pleased with how things are going – as well they might. The commercial radio disaster is the best thing to happen to BBC radio since the 1960′s, when the state sailed in on its behalf to capsize the pirates. Daniel Nathan probably summed up the mood of the other, commercial, half of the room by echoing Fru Hazlett’s view that the DAB business model is now “fucked”.

The BBC’s ‘Controller, Multi-platform and Interactive’, Mark Friend reflected the somersaults of logic one must go through to justify satisfaction at the radio landscape today. It goes something like this: do we want radio to go digital or not in the next ten years?

(Don’t all put your hands up at once.)

If we stall on DAB, the argument goes, then we’re saying we don’t want radio to go digital. Outside Broadcasting House management meetings, I can’t see that cart-before-the-horse proposition winning many hearts and minds. Digital and analog are, at the end of the day, just conduits.

Mark Friend said he couldn’t anticipate a “FreeView moment” for DAB, or see why one was necessary. That refers to acknowledgement that digital terrestrial TV had failed, and the main interests had to pool their interests to ensure a wider adoption of the technology. That day might come for digital radio pretty soon: as early as next year.

Ofcom recently proposed that the BBC should share the licence fee with commercial rivals. But with one exception, none of the commercial rivals actually want this to happen – which leaves Ofcom keenest of all on the idea.

At the Westminster Media Forum debate on Wednesday, executives from the top of British TV management discussed the regulator’s review into Public Service Broadcasting, in which “top-slicing” the licence fee is The Big Idea.

As we discussed here, Ofcom gets itself into terrible difficulties trying to define the subject. It can’t decide what “Broadcasting” is in the Noo-Media era, nor what “Public Service” is, either. This culminates in some very strange conclusions, such as lauding Symantec’s Anti-Virus help page as a very modern example of Public Service Broadcasting.

Amongst other things I also learned is how this purportedly “blue sky consultation” contrives to leave most of the interesting options out of the debate. Which isn’t surprising when you see how few people there are at top of the public service TV business – they all simply swap jobs every few years – and how almost all of the Professorial “independent experts” are really just part of the furniture. Shafts of insight were as rare as rude words in church. But more of that in a moment. As for top-slicing, where do they stand?

Take your positions

Naturally the BBC regards Ofcom’s review as an attack, or “pickpocketing”. In a speech on Tuesday, BBC chairman Sir Michael Lyons said the licence fee is “not a back pocket for government or regulators or anyone else for that matter. It is not a spare pot of cash, a contingency fund, to be raided every time there is a cause, however worthy, with a hole in its balance sheet and a media flag attached.”

In other words, it’s the Ark of the Covenant, and the BBC alone is trusted with the sacred duty to spend it. That’s not so surprising – what is rather startling is that neither ITV nor Five want a slice of your money.

“We’re not asking for money, we’re asking for freedom,” said ITV’s director of strategy Carolyn Fairbairn. She agreed that the old model no longer worked, and that a multi-channel world meant only a fraction of revenue – around ten per cent – was being invested in programming by the newer channels. Magnus Brooke, ITV’s directory of regulatory affairs, added that ITV would be tied by bureaucracy and compromised by public money.

Five echoed this theme, with its regulation exec Martin Stott chastising “an experiment in intervention that may or may not succeed”. He also criticised the lack of accountability of a licence fee diffused between commercial broadcasters, and thought that by the time the cost of the additional bureaucrats had been totted up there wouldn’t be a great deal of extra money for programmes. So you might as well give the money to the BBC.

BSkyB, which receives no public subsidy and has no public service broadcasting obligations, also thought it was a daft idea. There wasn’t really a problem with a dearth of material, what with shows like Ross Kemp in Afghanistan, said Sky’s director of corporate affairs Graham McWilliam. Sky’s subscription highbrow arts channel was a good example of the market meeting the demand, he added. None of Ofcom’s four proposed options involved less regulation, McWilliam pointed out – they all involved more. Jellyfish syndrome, again.

Naturally Channel 4′s chief executive Andy Duncan disagreed. Duncan’s main problem was not looking too chuffed at the suggestion of top-slicing, since Channel 4 is the biggest beneficiary.

His argument was primarily economic – the TV advertising market is shrinking, and C4 is great value, since it doesn’t have to pay a dividend to shareholders. (ITV also points out the looming crisis in ad spend, but would prefer to have the public service obligations lifted so it can compete with Sky, rather than get a cash hand-out.)

What does a TV executive look like?

It’s hard not to notice when you look at these top execs and policy makers that they all share similar backgrounds. Dame Patricia Hodgson ran the Independent Television Commission – she’s now on the BBC Trust. Ofcom’s lead on the review, Peter Philips, was head of corporate planning at the BBC. C4′s finance director was the BBC’s finance director. And the aforementioned Fairbairn, a McKinseyite management consultant, has sashayed from being Director of Corporate Planning at the BBC, to the same job at ITV. She stopped off at 10 Downing Street, from which Ed Richards, Ofcom chief, sprang…

No wonder that when they see a hairline crack in opinion, it looks like the Grand Canyon.

It was Kip Meek, former Ofcom No.2, who pointed out that for all the talk of “plurality” there was actually very little when you looked at the output of the public service news organisations. Not, he said, when you compared them to Fox or Al-Jazeera for example. Which is very true – when these news outlets “compete”, it’s to elbow each other out of the way to get the most melancholy shot of a polar bear. They won’t tell you that polar bear populations are actually doing just fine.

And it was a movie distributor (of quality documentaries), Tim Sparke, who dared describe most public service broadcasting as rubbish, or “fast food”, with thin ideas stretched into whole series.

Sparke’s right – the big broadcasters have lost their ambition of making challenging programs that make people think (rather than agree with a thought or feeling). This is a real heresy, and challenges us to compare the memory of the public service broadcasting we grew up with (Morecambe and Wise Christmas shows, The World About Us, Dennis Potter) with the reality of prime-time today, where we find the BBC – with a few honorable exceptions – is one long advertisement for itself, punctuated with glossy cooking and property shows. No wonder the reality of the BBC today is unbearable for many so of the pundits, that they prefer the sentimental fiction – the paternalism and the smell of Ovaltine – that emanates from the constructed memory.

Not so for Sparke, but then he has never worked at the BBC – and so can’t have had the chip implant.

Hands off my dial

Alas, the pundits and “citizens groups” are even more myopic and interbred than the cosy coterie of TV executives. There’s the Voice of the Listener and Viewer, which was set up 25 years ago in response to the prospect of The Archers disappearing from Radio 4. (Seriously.) Speaking at Westminster on their behalf was Ivan Gaber, who makes programmes for the BBC.

Journalist Steve Barnett, who chaired one panel, can be relied on to portray the BBC as a handicapped, put-upon contender; as can another journalist, Maggie Brown, a sort of Diet Polly Toynbee.

But the most vociferous ankle-biter, ever-present at such events, is marketing advisor Patrick Barham. He hectors and interrupts panellists to announce that the licence fee is far too low, and he’d gladly sell his house and all its possessions each year to pay for the Beeb. I’m exaggerating, but not by much.

(In 2004, the BBC rewarded his loyalty with a hefty digital consultancy.)

Three of the above four are “Professors” (Bedford, Westminster and LBS respectively), and all can be relied at such events on to keep the debate on tightly-defined territory. Narratives which may see the BBC expand on a global scale, for example, or which question any of its sacred duties, are simply excluded. Time and again they presented polling evidence that the current licence fee arrangement was for the best.

But people are voting with their feet. Or thumbs. And this Ofcom correctly identifies as an issue worthy of public debate.

Martin Lejeune found himself being attacked from all directions, but raised a very simple fact – that a third of the public consumes less than five hours of BBC services a week.

The panic this provoked from the audience was fascinating to see.

A bloke from the production staff union BECTU, who was so loud he didn’t need a microphone and who deafened everyone when he did, effectively called Dejeune a fifth columnist. Another attendee, whose affiliation I didn’t catch, argued that if the BBC’s revenues were cut, then it would be crippled, because its cost base had to remain the same. Deductive reasoning, anyone?

Almost the last word went to independent producer Alex Graham, who swotted away a point by Reg favourite Anthony Lilley of Nathan Barley Quango notoriety. Graham’s company recently completed the amazing series The Genius of Photography, and he’s a scourge of reality TV.

Lilley did his usual Fear Pitch of sub-Jeff Jarvisisms, by talking about the “attention crisis”. As ever, the answer to the crisis of the dwindling TV audience is “employ New Media people like me!”.

(At Westminster Forums, panellists write their own bios – I’ve been on a couple. And I couldn’t help noticing that the only person with a bio longer than Anthony Lilley’s epic contribution was Steve Barnett.)

But Graham pointed out that the answer to the “attention crisis” (ie, people finding something better to do than watch terrible TV) was quite simple – make great programmes.

Do you think it might work?

Alas the Beeb’s crisis of confidence is now so great, it’s unable to do what it should, and can do very well. But even more of a problem, I think, is that its supporters prefer a fictional, nostalgic, saccharine version of the BBC rooted in a bygone era, the one that really only exists in their imaginations.

They think they’re helping the BBC, but really they’re helping kill it. Slowly and painfully.

It must feel like a stag night in SE1, as the executives fly in expensive blue-sky wonks and consultants, and Ofcom gets quite giddy with itself at the prospect of a world without Ofcom. Then sobriety returns, of course, and it wakes up and finds itself knickerless and handcuffed to a lampost.

So Ofcom gets back to what it loves doing best: Making Very Big Decisions about What’s Good for Us.

Yesterday Ofcom published its second Public Service Broadcasting (PSB) review in five years, and while this one extends itself to encompass new media – such as the very intarweb you’re reading now – it doesn’t do much more than hem and haw, and fret about the status quo. This PSB review doesn’t dare answer the questions it raises, while leaving the biggest issues untouched.

So here’s a modest proposal.

How we must judge a media regulator is on how well it tackles the causes. Here we find Ofcom does less well. It tiptoes around a couple of gigantic issues, either of which is the proverbial elephant in the room. I’ll take each heffalump in turn.

While they dare not spell it out, I would say Ofcom’s analysts have described the surface of things just about right. There’s a super-abundance of stuff – and viewpoints – on the internet, which makes a repetitious, pack-chasing institutional news media that’s lost its confidence almost completely redundant.

And yet… there’s nothing worth watching on TV. There’s a yawning absence of formal channels to tell us stuff we didn’t know, or join the dots. This, concludes Ofcom, leaves our children, and those provincials who still point at aeroplanes (I paraphrase) – in grave peril. It couldn’t quite bring itself to go all the way, and suggest that we’re all in peril (or not) if this mythical thing called Public Service Broadcasting disappears.

What’s a broadcast? Who is allowed to do it?

Let’s look at the first elephant. What material and what mechanisms make up a permissible definition of “broadcasting”? And who is allowed to do it, and where?

Well, as the regulator pointed out yesterday, the tools of production are now cheap and widely available. But as they fail to point out, so are the tools of transmission. And now, huge areas of spectrum, which notionally belong to us and which we merely entrust to Ofcom, are up for grabs. So why not make better use of them? Why not give them back to us?

It’s a taboo subject, of course; state regulators have been loathe to trust people with “real” media. But as it happens, Ofcom has already tried this bold move, and with spectacular results.

When people are given professional-quality training, and let loose to be creative, the results are terrific. The regulator has been granting dozens of licenses for low power community FM radio stations in recent years, and these often shame the heavily sponsored “official” stations they jostle against on the radio dial.

Manchester’s Radio Regen has trained many hundreds of people, and in contrast to the patronising “citizen journalism” projects undertaken by digital missionaries, these have produced great programs, and had a real effect on the communities.

Something strange happened in Salford, when this was tried out:

“Local police neighbourhood nuisance in the areas went down during the months Radio Regen was working people there, with reductions petty crime. During the PCK FM broadcast, the local desk sergeant was invited in for an interview. When asked if he was having a good weekend, he replied, ‘Yes, because you lot are keeping the teenagers off the street!’”

They were making radio programs.

So although these licenses are given out with the same sniffy disdain for the proles as a petrol station grudgingly letting the local travellers use the forecourt WC, let’s give credit where it’s due. And then build on the success.

Alas, it seems that the powers that be have a grimmer vision of society in mind. They would much prefer the population was pharmaceutically pacified – ideally using some kind of self-service dispensing mechanism; a Web 2.0 widget, perhaps. And should the masses stray into self-expression, however, then it must be as solitary bloggers, communing with the Hive Mind by posting messages into the ether that no human will ever read – but that provide raw material for Google Adwords and Phorm intercepts. Which can then be processed and fed back to them.

In this scenario, the streets will also be free of teenagers – but the fibre optic cables will pulse with targeted and relevant behavioural advertising (And government health warnings, of course).

Which vision of society do you prefer?

There’s a practical policy problem, however. Spectrum that today is used by analogue radio and analogue TV, is earmarked for “reapportionment”. This is really what Ofcom loves most, because the bureaucratic carve up that results gives it “tax and spend” powers.

In yesterday’s consultation document, it’s clear Ofcom has already decided who should get this spectrum. And we know what happens next. After another bout of consultation, and evidence-based research – which will then be chucked in the bin – the spectrum will be handed to telecoms companies for “mobile TV”.

But why reapportion it at all? Why can’t we have it back?

What’s public service, anyway?

This bring us to the second elephant, what does “public service” mean anyway? You’ll have to read thousands of words (we haven’t counted) of policy documents Ofcom unleashed on us yesterday, to discover that it really doesn’t know the answer itself. It knows what “public service broadcasting” should do – it should leave a nice smell in the room, one of “plurality”. And one of “Britishness”, apparently too.

But it doesn’t go any further, and it studiously makes a point of avoiding the subject by outsourcing the research to third parties. One of these consultants, tasked with the heroic job of defining “public service” for wibbly web material – suggested … BoingBoing, RealClimate, and The Richard Dawkins Foundation websites. You couldn’t find three better examples of hermetically-sealed groupthink if you tried. They’re cults in the making.

(And just to show these new media consultants are heroically clueless, Symantec’s Virus forum is also on the list. It’s a public service, too, apparently).

There’s nowt on TV

A few years ago, as now, Ofcom saw how funding for high quality “public service” programming as we know it would dry up. It came up with a very good idea – a “Public Service Publisher” – which would give an additional source of funding for programme makers.

The BBC, insulted by this challenge to its monopoly, fought this concept tooth and nail, and succeeded in killing it. (The “PSP” resurfaced with a Web 2.0 flavour as the notorious “Nathan Barley Quango”, that Reg readers helped shoot down last year – Thankfully, that was absent from yesterday’s discussion document.)

But with the BBC dying a death of a thousand cuts – why not revive the PSP in its original form? The funding could come from… well, the BBC.

One of the most attractive ideas I’ve heard in years is to take the license fee and divide it up in £25,000 chunks – and give it to anyone who wanted it. The argument is: we have so many excellent TV people in the UK, quality would win out. We’d still get Top Gear, and The Archers, but imagine what else we could have, too? Once we have the spectrum back, we ought to have the programming back, too.

But as promised, we won’t duck the issue that Ofcom avoided – which is what criteria should such £25,000 chunks, or £4bn chunks, be given out?

Well here’s a suggestion that came up at El Reg during our “BBC Week” last November. I think it’s a good one. (If you’re squeamish, when you see the word “BBC” in the next paragraph, just substitute the word “gatekeeper” – for the point is applicable to whoever holds a substantial amount of commissioning money). Take it away, Luther Blissett:

The BBC has to decide if people are stupid or intelligent.

If the former, then embedded reporters will continue to be interviewed in politically correct terms by talking heads about unverified snippets from dubious sources while spilling the beans in selective fashion, and people will use the internet to find the other side of the coin.

If the latter, then it has to get out of the way and allow disparate points of view to be put by those who hold them, and their narratives aired sufficiently fully so people don’t have to use the internet to make up their minds. Since some narratives are more complex and/or harder to put across, it has to jettison its specious simulacrum of a concept of “balance” – which in any case would be irrelevant. (The question of when to pull the broadcasting plug on a narrative might be settled in various ways. One would be to see when it degenerates into tedium, repetition, blatant adversariality, tendentiousness, ad hominem attacks, personality cult, etc).

And here’s the punchline:

Rationality… really needs an intellectual overhaul which does not leave reason itself as the privilege of a select few tribes or as a mode of life which one tribe can seek to impose on another. In other words .. either we all are capable of reasoning in one and same way, or none of us are.

In other words, we’re all capable of thinking for ourselves. In the week that the Beeb cowered before a fact-free fanatic, touting the “emerging truth” of an “infant science”) this seems particularly poignant.

Now here’s the BBC’s Adam Curtis, on what a fragmented landscape looks like when the “public service” media don’t know what they’re doing.

What marks out all these groups is that they’re fundamentally negative – they’re looking for something to criticise. They don’t have a political ideal – and they don’t know what’s going on. So they retreat into a simplified and often very dated view of the world.

Which is fine, because actually you’re right, most people throughout history have a simplified view of the world. What a journalist’s job is to try and do, is go a tiny bit further than that, and actually try and open people’s minds up, and ask, “Have you thought of looking at it this way?” That’s its job.

What’s happening on the internet is that people are retreating into their citadels where they will not have that. And if you try and do it, they don’t like it. Because you’re joining up the dots in a way that isn’t the way they joined up the dots.

What really happens now, is that they’re so entrenched in their self-referential groups, anyone who joins up the dots any other way is a bad person.

That’s the kind of groupthink so beautifully exemplified by Ofcom’s idea of public service: BoingBoing, RealClimate and the Dawkins personality cult.

So from those two starting points, we can see a real strategy for Public Service Broadcasting begin to emerge. It should start with giving us the airwaves, and unlocking the talent.

Richards said in a speech to the Royal Television Society on Tuesday night that the “the PSP as a concept has served its purpose and we can move on to the relevant questions for today”.

Translated from PR-speak, that means the game is up for the much-derided idea. (It’s been called “Welfare For Wankers”.) So what is the PSP and why did it create such a passionate response from Reg readers?

When the idea was first floated in 2004, it was as a TV commissioning agency for worthy “public service” programming, with a budget of about £300m a year. It was needed, Ofcom explained, “to ensure that the necessary level of competition for quality in public service broadcasting continues through the transition to digital”.

The BBC helped shoot that down, but Richards couldn’t let the idea drop. The PSP was revived, only this time encumbered with Web 2.0 buzzwords – and in one of the most spectacularly naff policy proposals ever made, emerged as a quango for New Media types, with an annual budget of £100m mooted.

“It’s a new media answer to a new media question,” is how Ofcom described it, tautologically.

The argument was that the “market” for worthy new media projects had failed, and that British internet users were too stupid to find it for themselves on Google.

A year ago, we invited readers to tell Ofcom what it thought as part of its consultation process – with hilarious results:

“As a self-actualising media node, I welcome this redistribution of government funds from provincial luddites to new media ‘creative’ Sohoites…

“Cool Britannia lives! The creative industries initiative was good but didn’t radically empower young creatives and their 360-degree thinking. Unleash the collective wisdom of new media and see us swarm!”

“Let’s use those redundant factories to turn out polyphonic ringtones.”

Ofcom coolly ignored the hostile responses, claiming the public supported the concept. Senior BBC web luvvie Tom Loosemore was hired to strategise on what he described as a “visionary and transformative” project.

But after MPs savaged the idea last autumn, Richards had little option but to find a graceful exit.

“Geoff Metzger, managing director of the History Channel, perhaps summed it up best when he said that the public service publisher was a ‘cure with no known disease’,” the Commons Select Committee for Culture, Media and Sport concluded.

Yet even then, so many of New Labour’s new media types found the idea of a cash trough so irresistable, that the corpse of the PSP was still being given electric shocks.

“To really move on, the creative industries need to get past special pleading and on to a sound intellectual basis regarding the encouragement of, and support, for risk and how to measure results,” pleaded Lord Lilley of Webquango, one of the authors of the P2P 2.0 proposal, in The Guardian.

Having staked so much of his personal capital on the project, Richards now calls it a “rock thrown into a pool”.

DAB has been a very British failure. While the specification is almost 20 years old, and (just about) adequate, bureaucracy and regulatory greed left British listeners with an experience far short of the “CD quality” sound they were promised.

Digital radio has been expensively promoted by both the BBC and Ofcom – both of whom have deeply vested interests in the digital switchover. And the vested interests range far and wide, too – media companies have digital stations of their own, and prefer cross-promoting their investments in their publications to reporting the subject frankly. Meanwhile, analogue radio remains Briton’s best-loved and most popular medium, a survey confirmed this week, with 100m analogue sets in use – compared to 6.5m DAB receivers.

Finally, GCap blew the whistle on the charade two weeks ago, when it announced that it was canning two of its DAB stations.

“We do not believe that – with its current cost structure and infrastructure – [DAB] is an economically viable platform,” the commercial broadcaster said.

The FT reports that secret crisis talks are taking place in Manchester today to try and make digital radio more attractive to commercial broadcasters. Coercion of one form or another seems high on the agenda, however.

One idea is to make the analogue receivers obsolete overnight, by withdrawing BBC broadcasts from analogue radio. Want the Beeb? Go out and buy a new set.

Running down analogue has also spawned dozens of thriving community FM stations, which provide a stark contrast to government-backed “community empowerment” programs based on web technologies such as social networking. These stations also embarrass the BBC, whose own lacklustre local radio stations too often appear to serve as a home for washed-up Alan Partridges. When given the choice, people prefer listening to real people, rather than the patronising “local” voice of the BBC.

Another idea cited is to use our own money for more digital propaganda. The FT reports that the BBC has a £250m spare license payers’ cash, in the kitty handed to it for digital radio:

“Another radical idea would be to use public money to support a huge switchover advertising campaign – and subsidies for elderly and low-income families to buy new radios – in the same way that as has happened in aiding the switch-over to digital television.”

The Commons’ select committee for Culture, Media and Sport rejects the idea that the creation of a “Public Service Publisher” gatekeeper would help the market.

The report is here, while the Ofcomwatch blog broke the news here. The PSP would have cost taxpayers £300m a year, with the cash going to production houses to create interactive Web 2.0-style concepts.

Readers savaged the idea during Ofcom’s consultation process. One submission to OFCOM urged:

“As a self-actualising media node, I welcome this redistribution of government funds from provincial luddites to new media ‘creative’ Sohoites… Ed Richards’s initiative ‘gets’ new media on so many levels. Let’s flashmob this bitch up to escape velocity.”

(This, and other responses are on the Ofcom site.)

MPs go beyond saying that there’s no sign of market failure, which is a precondition for the regulator to intervene. The committee concludes that the new quango would distort the market. The committee writes:

“Geoff Metzger, managing director of the History Channel, perhaps summed it up best when he said that the public service publisher was a ‘cure with no known disease’.”

The “Public Service Publisher” is a quintessentially New Labour backscratching exercise, backed by friends of Ofcom chief Ed Richards, who calls it his “personal crusade”.

The quango would be “a new media answer to a new media question”, an Ofcom spokesman told us back in March.

Unfortunately, the hastily-scribbled concepts looked less like the future of media, and more like Look Around You updated with Web 2.0 buzzwords.

The regulator gave the job of studying the idea to executives at two media companies Andrew Chitty of Illumina Digital, and Anthony Lilley of Magic Lantern Productions, a tiny TV production house. The pair recommended it start life with a budget of £100m a year, although this may need to rise.

So Ofcom’s quango looks dead – but new media luvvies are getting the taste for hand-outs. Lilley continues to campaign for new media subsidies (aka “give me the money”) in his self-aggrandising Grauniad column, for example here. Only he calls them “investments”.

Don’t expect him to stop.

The PSP, or Public Service Publisher, is a new quango that would cost taxpayers between £100m than £150m a year – handing out money to new media types for interactive websites, and other “user generated content” gimmicks. Ofcom loves the idea – and gave the task of investigating it two new media production houses who would stand to gain handsomely from the new gravy train.

Unsurprisingly, they thought a Nathan Barley Quango, or NBQ, was a splendid idea.

The public responses should be sobering, however. Most are skeptical of the need for the new quango, while many more are completely indifferent. And some are very scathing. Step forward, W Jackson:

As a self-actualizing media node, I welcome this redistribution of government funds from provincial luddites to new media ‘creative’ Sohoites.

Cool Britannia lives! The creative industries initiative was good but didn’t radically empower young creatives and their 360-degree thinking. Unleash the collective wisdom of new media and see us swarm!

If Tony had done this when he first got in (and I know how hard you tried, Ed) then thousands of people could already be employed – let’s use those redundant factories to turn out polyphonic ringtones.

Critics – like Orlowski at The Register – will complain that this is pork-barrel politics for tech. utopians. That this has no relevance to’ ‘ordinary’ people and their lives.

Well, I’ve had enough of that patronising rubbish. I’ve launched a post-ironic web brand – nar.ciss.us – that was created using the competitively-priced labour of redundant industrial workers. It shows that anyone can ‘get’ asynchronous java – even people from the North.

If anyone wants to brainstorm this – then twitter/IM/SMS/Skype/email me. I’m up for an ‘emergent conference’.

Ed Richards’s initiative ‘gets’ new media on so many levels. Let’s flashmob this bitch up to escape velocity.

Another, Dr Stephen Jones, points out that new and old media are complimentary, and don’t need taxpayer-funded pampering.

The consultation document is founded on several dubious premises.

The report states that new media displaces old media, and that public service material should therefore be targeted at new platforms. However, as commentators have pointed out, new media enhances old media.

Nor is there a rationale for public investment in platforms where the barriers to entry are already low, and where private investment is plentiful.

The PSP idea in its current form is little more than a taxpayer-funded subsidy for web production houses.

OFCOM should instead fulfill its commitment to strengthening public service broadcast material.

Reader Mark Splinter submitted a long, thoughtful, and passionate response that boils down to: why not just give the money to a thousand mavericks directly? You don’t really need a quango.

The Ofcom proposal before me does absolutely nothing to alter the problem that the best creative ideas can be lost in bureaucracy. The examples given are uninspired grey goo, the illustration styles used are ten years old, and sending text messages to a panel of experts is elevated to the status of innovative debate.

It smells bad, and I must present to Ofcom the possibility that they are a regulator, not an artists’ loft, and they really don’t know what they are doing. Asking a couple of the internet equivalents of Werner Hogg to comment on the idea of receiving free public money will get you a distorted answer, probably involving “yes please” and “exactly how high would you like us to jump?”

If you offered me 50,000,000 I would also probably tell you that you need an “edgy urban mix of interrelated electronic Web 2.0 synergies” and then laugh all the way to the bank.

Trust the punks, the mavericks, the lunatics, the fringe of the fringe. Use public money to help them fight against the bland requirements of corporations and venture capitalists. Be not afraid of 1000 failures. Be bold, or you are being superfluous and irrelevant, and perhaps ridiculous.

Ofcom doesn’t think it’s being ridiculous though. Turning its own “evidence based” policy-making guideline on its head, it concludes there’s “broad support” for OFCOM intervening with a new quango, so it’s full steam ahead.

That’s democracy in action, then.

The new agency, which Ofcom calls a “Public Service Publisher” or PSP, would play a “gatekeeper” role in commissioning new media concepts. These range from interactive websites to participatory games involving different kinds of digital media, such as text messaging.

And without Parliament so much as examining the idea, it already looks like a shoo-in.

The idea has the powerful backing of UK Telecoms regulator Ofcom, and the personal imprimatur of its CEO Ed Richards, who describes it as the centerpiece of his “personal crusade”.

“It’s a new media answer to a new media question”, Ofcom spokesman Simon Bates told us.

That’s an indication of how much the idea has morphed since it was first floated three years ago. Back then, the PSP was envisaged as an independent commissioner of worthy Public Service Broadcasting – high quality documentaries and a dramas – fulfilling a role left by Channel 4′s downmarket turn over the years, and as a counterweight to the BBC.

The latest incarnation of the PSP idea is sold as a helping hand to zero-budget web ideas – only it has an old school, TV-sized budget attached.

A taste of what to expect from the newly Web 2.0-ified PSP can be found in a discussion paper published in January, called A new approach to public service content in the digital media age: The potential role of the Public Service Publisher.

Examples of the type of output we can expect from the new quango include an earnest interactive panel format, where text messages are zapped in to a panel of “Citizens” and “Experts”:

… and a multimedia game described as an “Augmented Reality Drama”.

Phone a friend

Ofcom asked executives at two digital media production houses, Andrew Chitty of Illumina Digital, and Anthony Lilley of Magic Lantern Productions, to examine the idea. The resulting report is filled with buzzwords and assumptions that are the staple rhetoric of today’s technology evangelist.

“We are entering the age of ‘our media’ where the communication of ideas amongst groups and the sharing of content are at the heart of what is going on. This change adds significantly to the ecology of mass media as we have understood it since the invention of radio broadcasting at the end of the 19th century,” writes Lilley. “We are entering the networked, learning age.”

So a New Age is upon us. But is it one that needs a new gatekeeper?

We asked Ofcom if there wasn’t a conflict of interest in giving two new media production companies, who could well directly benefit from the creation of PSP, the job of recommending whether or not it should exist.

It’s little surprise that Lilley and Chitty, who have lobbied tirelessly for the creation of the agency (Lilley with the help of his Guardian column) came out in support of the idea. As digital production companies, both Magic Lantern and Illumina Digital will be first in line to benefit from the new flood of public money.

Chitty and Lilley also came up with the modest budget proposal.

“We suggest funding of £50m to £100m annually as a sensible starting-point,” wrote Chitty. But this is merely the start.

“However, the PSP’s role within the public service system is likely to grow over time, and its initial funding may need to be expanded.”

That’s a lot of money for what critics charge is “fancy websites” and games. Ofcom denied the conflict-of-interest charge.

“I wouldn’t see them at being at a huge advantage,” Bates told us. “When it comes to who will run the PSP, and where the money will come from and where it will go hasn’t been decided. We’ve simply asked these two individuals to ask others how it could be developed.”

Special pleading

We asked the key advocates of the new quango why digital media needed its own gatekeeper? Why the web needed preferential treatment over existing media, and why, in the age of YouTube, we needed a gatekeeper at all?

Interactive art and community projects face a variety of options for funding at the moment – and commercial sponsorship isn’t hard to find.

According to Ofcom, its policy was not to intervene in the market, however, there were situations where market failure would justify it – and PSP was one of them.

“The market doesn’t have the incentive to provide a certain kind of content,” said Ofcom’s Bates. “The BBC, with its license fee settlement…will provide a cornerstone of public service content and quite rightly so. But our strategic review found that the BBC needs competition in Public Sector Content”.

But this jars somewhat with where Lilley sees support emerging:

“It’s not about special pleading for creatives,” he told us.

He said the PSP idea was winning backing from existing commercial ventures, which could use some help with their websites, such as major media owners.

“Channel 4 now see they could be a beneficiary,” said Lilley. “Newspaper groups see they could be in partnerships”.

It remains to be seen how popular the idea of underwriting, say, the Daily Express interactive Sudoku will be with the public, who ultimately foot the bill.

So while PSP is sold as a way of “empowering the grassroots”, it’s a boondoggle for big media. Not surprisingly, the PSP has already drawn fire from technology utopians who perhaps expected something more tuned to the amateur:

“Sadly, it seems the PSP [will be] funding the struggling UK film and TV industry to produce a quota of parochial ‘new media projects’, the IPR to which they may then exploit worldwide,” says the Open Knowledge network’s Saul Albert.

Ofcom’s taxpayer-funded PSP will differ from other commissioning agencies – such as the Arts Council or the Film Council – in that its aesthetic role appears to be defined by the technology, and little more.
Stealth Quango

Luke Gibbs, the independent policy advisor and founder of the Ofcomwatch blog, finds PSP problematic for two reasons.

“It’s public money – so it should be government driving the policy,” he told us.

“If you’re saying that you need to create a new BBC or Channel 4-type model, then that’s industrial policy. It needs to be approved by Parliament and at the moment it’s Ofcom making the suggestions about how public money is being spent. That’s quite a hard sell, and it’s not for Ofcom to be selling it.”

The other is Ofcom’s assumption that what applies to broadcast media should apply to the very different world of new media.

“The BBC and others have been privileged in being allowed sole use of a scarce public resource, from an era when people had little or no choice. In return for use of this scarce public resource, they were expected to adhere to certain principles.

“But in the online space how do you classify these obligations? And you haven’t got the same scarcity of resources – material is likely to be too small within a vast ocean to be worth anything.”

Saving content, by killing telly
Then there’s the underlying assumption that TV is in terminal decline.

A history of technological innovation in media shows that after a period of disruption, every “new” media tends to validate and refresh the old, rather replacing it.

After the upheaval, the same media owners are usually in place – and typically more concentrated. It’s quite unlike the history of transportation, where one technology (for example, the train) supersedes another (for example, the canalway) for economic reasons. So in assuming that TV is in a fatal condition, Ofcom is merely hastening its demise.

Ofcom quoted us figures suggesting that 10 per cent of 16 to 24 year olds had defected to the web: these are included in the report. But in addition to ignoring the impetus the internet provides for TV, the figures also show this is a generational factor: older adults value TV much more than the 16 to 24s. Once they have families, these viewers return.

Wouldn’t good, relevant TV win them back? Ofcom told us its role was to cater to everyone – but the message appears simple. It’s got the web religion, and from now on it’s “computers or bust”.

“Public Service Broadcasting has traditionally meant TV, and Sunday night dramas andd BBC Current Affairs shows. But we’ve got to look further ahead,” Bates told us.

“We think there’s a gap in the provision of content for new media networks – that’s the context of the PSP debate. But no one is pretending the PSP is anything other than part of a solution to a wider challenge.”

Even in the converging world of IP-based TV, there’s little sign of “sit forward” more interactive services such as Joost, and “lean back” traditional TV, where an audience wants to be absorbed and entertained.

Also unacknowleged anywhere in the 57-page report is the rapid growth of “Mycasting” – which enables people to view their favourite TV shows remotely using Sling Media’s Slingbox, or Orb Networks’ software. Again, this use of technology enhances, rather than replaces traditional broadcasting.

Without acknowledging such developments, Ofcom’s PSP authors offer a very narrow vision of the future.

Falling between the two stools, a PSP could find itself providing material for a cable channel or websites no one wants to watch.

As Ovum noted this week, only the biggest brands, such as YouTube, have made the leap from “sit forward” to “sit back”. And there are very few of these major web content brands, confirming Gibbs’ view that old media assumptions don’t often apply to the new.

So stripped of its voguish web-centric sales pitch, is there really a reason for a £100m gatekeeper to exist?

How to respond: The consultation period ends today at 5pm. It’s only gathered nine responses so far, so yours could make a difference. Details about the PSP can be found here – and readers can send their thoughts on the PSP to Ofcom via this handy form.

What emerged from the sessions is that ‘Neutrality’ is one of those incomprehensible American phenomenons, from which we’ve mercifully escaped. Your reporter was one of those invited to give a briefing – having reported on the issue from both sides of the pond – and said as much. But in the expectation that this would be the heretic view, rather than the near unanimous consensus opinion.

Summing up, Michael described the clamour for pre-emptive technical legislation as “extreme… unattractive and impractical”.

It was, he said, “an answer to problems we don’t have, using a philosophy we don’t share”.

That wasn’t the only surprise.

Google strop

Interestingly, the event was snubbed by Google, which in the USA has done so much to stoke the “Neutrality” crusade. Google has thrown lobbying money and muscle at Congress, but at Westminster, declined an invitation to speak. It sent a representative who told a fellow attendee that the panel was “biased”.

Stranger still, and this should cause conspiracy theorists some confusion – the Forum was sponsored by AT&T. That’s the AT&T that Neutralists insist doesn’t want to talk about its nefarious plans to sabotage the internet. Well, here it was. Maybe AT&T never had any intention of doing what the Neutralists claimed it wanted to do – and it was all a huge misdirection. But Occam’s Razor is never sufficient for conspiracy theorists, who simply create a new, and more elaborate narrative.

Overall, the debate was on another plane of technical and economic literacy to the hysteria served before Congress.

That doesn’t mean the UK regulator is oblivious to sensitivities. OFCOM regards the markets as essentially different. There’s more access competition here, and the UK doesn’t have such as ancient cruft as the US distinction between an information provider and a telephony provider. Greater competition means a regulator can do what a regular should do, believes OFCOM, and let the market sort it out.

OFCOM’s Douglas Scott reiterated that policy today. He said, however, he believed Neutrality wasn’t a US-only debate. Neutrality issues were being pushed up the agenda by the emergence of time-critical applications (such as video), and the ability of equipment vendors to deliver a smarter network. He then demolished most of the reasons why OFCOM needed to get involved.

In the USA, “all bits is equal” is a mainstream view, in Europe, it isn’t. The European framework permits ISP to prioritize packets by application, which the UK regulator regards as fine. A grey area, he suggested, was when an ISP offered MySpace a preferential Quality of Service deal, for a fee. Should the regulator constrain the fee?

Hand-off hands off

concerns about T-Mobile’s contract blocking VoIP calls last year. OFCOM was aware that rival network operators were striking deals with VoIP operators (3 UK now offers a packaging including Skype for £5 a month) and declined to intervene. T-Mobile has now responded with a VoIP tariff.

(It’s largely irrelevant, but still worth noting, that T-Mobile has yet to block a VoIP call made by your reporter, which suggests that while it wants to discourage VoIP calls it can’t afford to prevent them).

In that example, said Scott, OFCOM would probably have stepped in if all the operators were blocking VoIP.

Scott concluded by saying neutrality wasn’t an issue, so long as customers could migrate to an alternative provider quickly and easily.

Speaker after speaker described the difficulty of painting the phantom called Neutrality. Most characterized it as a US-centric debate. Most were wary of prescriptive regulation, which had to be technical by nature, when no harm had been caused and the problem couldn’t be described.

The Head of UK Telecoms Policy at the Department of Trade and Industry, Claire Hobson, said Neutrality was in danger of being an issue that’s “flogged to death”. She described the position as “relaxed but not comatose”, and reiterated Douglas Scott’s view that so long as people knew what deal they were getting, and could switch easily, “Neutrality” wasn’t an issue.

And Americans characterize Europeans as regulation-happy?