Ofcom props up the BBC by unfairly over regulating private broadcasters.

• Ofcom has propped up the BBC through a protectionist regulatory framework that unfairly penalizes private and commercial broadcasters, according to new research from the Adam Smith Institute (ASI).

• American media sites that regularly have partisan transparency consistently rank higher in public trust than UK broadcasters. In the UK public trust in media has plummeted to a trust index of just 39 out of 100.

• The ASI calls on the Government to deregulate the sector by replacing the restrictive licensing model with a "general authorisation" regime similar to the postal sector.

Ofcom has propped up the BBC through a protectionist regulatory framework that unfairly penalizes private and commercial broadcasters, according to new research from the Adam Smith Institute (ASI).

This comes as the announcement of Ofcom’s new chair is expected in early April, in preparation for when Lord Grade (current chair) steps down on the 30th April. With this, there is an opportunity for the regulator to assess and return to its founding principles. 

Ofcom has strayed from its founding mission of promoting competition between broadcasters. Instead, it has created a "two-tier" system where public broadcasters like the BBC enjoy unique regulatory cushions such as the ‘BBC First’ complaints procedure while private competitors face intrusive content moderation and the threat of massive financial penalties. 

Despite the UK's heavy regulation, public trust in media has plummeted to a trust index of just 39 out of 100. Enforced nominal neutrality is counterproductive. Looking at American media, where partisan transparency is the norm, it consistently ranks higher in public trust than the UK.

The ASI calls on the Government to deregulate the sector by replacing the restrictive licensing model with a "general authorisation" regime, letting broadcasters freely enter the market if they want to. Other recommendations aim to strip back the Ofcom Broadcast Code and end enforced impartiality. This would allow broadcasters to air any content within the law, shifting the power of regulation from bureaucrats to viewers who "vote with their eyes".

Key Points:

This new report by the Adam Smith Institute assesses broadcast regulation and the powers of Ofcom. This paper argues that:

• Ofcom has strayed from its founding principles of ‘competition policy-plus’ designed to ‘reflect market realities’.

• Instead, it has grown in power at the expense of economic growth and free speech. 

• The broadcast license regime suppresses media plurality.

• The ‘BBC First’ complaints procedure and special treatment of Public Service Broadcasters undermine trust in the media.

• Enforced neutrality of reporting (enshrined in clause five of the Ofcom Broadcasting Code) also undermines trust in the media. 

• Clause two of the Ofcom Broadcasting Code undermines free speech by forcing broadcasters to navigate vague definitions of ‘harm and offence’ in their content. 

• Ofcom’s power to fine broadcasters by a percentage of their global qualifying revenue creates market uncertainty that deters investment and market entry.

To improve Britain’s broadcast sector, we propose the following changes:

• Abolish principles two and five of the Ofcom Broadcasting Code.

• Replace the broadcast licensing regime with a general authorisation model.

• Replace the ‘percentage of global qualifying revenue’ fine limit with a fixed sum limit.

• Extend the provisions of the ‘BBC First’ clause to all broadcasters.

• Remove the BBC’s regulatory privilege and replace it with an enhanced regulatory model. 

• Remove the provisions of the Media Act 2024 pertaining to the enforced prominence of Public Service Broadcasters on streaming services.
  

Rt Hon Sir Desmond Swayne Conservative MP for New Forest West, said:

“For too long, Ofcom has been allowed to punish private broadcasters.

“This report by the Adam Smith Institute is encouraging, Ofcom should be facilitating more private broadcasters to add to our media space, rather than shielding the sector by prioritising failing business models, like that of the BBC."

ENDS

For further comments or to arrange an interview, contact joanna@adamsmith.org| 0798 5540467.

Notes to editors: 

The Adam Smith Institute is one of the world’s leading think tanks. It was ranked first in the world among independent think tanks and as the best domestic and international economic policy think tank in the UK by the University of Pennsylvania. Independent, non-profit and non-partisan, the Institute is at the forefront of making the case for free markets and a free society, through education, research, publishing, and media outreach.