Can it be right that Ofcom is so very powerful?

Britain has become rather casual about power and the role of regulators

March 02, 2020
Photo: Yui Mok/PA Wire/PA Images
Photo: Yui Mok/PA Wire/PA Images

Given the noise around British politics, the announcement of new powers for the Office of Communications, widely known as Ofcom, understandably got lost. Understandable maybe, but regrettable because Ofcom is emerging as a potent part of the UK’s system of unelected power.

Its extra new role will be to police socially damaging content published on media platforms such as Facebook, Twitter and YouTube. Ofcom will be able, in the final resort, to require them to remove images and text concerning, for example, child abuse, cyber-bullying, extreme violence and terrorism. Introducing such powers lies within the spectrum of reasonable public policy, even if other democratic states end up striking a different balance between free speech and damaged citizens. For all the debate and, no doubt, fierce lobbying those powers will prompt, it is not the only thing that makes Britain’s plan interesting.

Ofcom’s history is of gradually accumulating functions. Some date back to the privatisation of utility industries (gas, electricity, water, and telecoms) a generation ago, when a range of independent agencies, including an Office of Telecommunications (Oftel), were created to promote effective competition. This is, unambiguously, economic regulation, which for telecoms involves licensing use of the electromagnetic spectrum and setting the terms on which the firms can sell their wares. It is complex stuff, calling for subject-specific technical knowledge and expert command of the economics of industrial organisation.

In the early 2000s, Oftel was merged with a number of similar bodies, creating Ofcom. Strikingly, the amalgamation included the old Broadcasting Standards Commission, responsible for overseeing whether the output of independent television and radio networks was too offensive. As well as requiring skills closer to those of a moral philosopher than a micro-economist, this extra mission produced an unusually powerful agency in Ofcom. Around the same time, France decided to keep its own telco-media economic and content regulators separate precisely to avoid creating what, in my book Unelected Power, I call an over-mighty citizen. Given its multiple missions, Ofcom’s directors were, usefully, required to establish a dedicated content board for its regulation of the media’s output, but judging from its published minutes it seems to be advisory, with no formal powers of its own.

Fast-forward another decade and, in 2016, Ofcom became the overseer of the BBC’s outputs, acting as a standard setter and court of appeal for complaints. While the pros and cons of ending the BBC’s self-regulation were contested, there was little public discussion of whether the design and structure of Ofcom made it fit to be so very powerful. With the prospect of even more power coming its way, it is time to open that box. Here are just a couple of issues.

Like many of the UK’s economic regulators, Ofcom’s governance seems to be modelled on that of a publicly quoted for-profit business, with a chief executive overseen by a board of directors who are non-executive and part-time (and few of whom are subject to House of Commons select committee confirmation hearings). It baffles me why anyone can think this is a decent way to delegate quasi-legislative, executive and adjudicatory powers in a constitutional democracy. Nor is it how Britain always does things. When, in 1997, the Bank of England was given independence, parliament established a monetary policy committee of nine equal members, whose published minutes disclose their votes and so leave each having to explain and defend his or her judgments. When, after 2007/08’s terrible financial crisis, parliament returned banking system supervision to the BoE, we wanted the new committees (the Financial Policy Committee for the system as a whole, and the Prudential Authority for individual firms) to be more like the MPC than the flawed model of board/CEO (which, by the way, the government retained for the separate Financial Conduct Authority).

The structure of Ofcom and its peers concentrates too much power in the hands of the CEO (however talented and virtuous), does not ensure major decisions are reached after collective deliberation among individually accountable policy makers, and limits how much disagreement is exposed to public view. All that increases the vital importance of the judges as a procedural backstop and check, and makes it easier for the government of the day to alter the course of policy via the CEO and chair rather than changes in the law.

A reasonable response is “but we want government ministers to be able to steer policy.” We must, then, be clear why Ofcom and others are insulated from day-to-day politics. Presumably because we worry an elected decision taker would prioritise short-term popularity, and because investment in the infrastructure might fall if regulatory policy chopped and changed with political opinion polls.

If those grounds for independence still command support, then parliament needs to set each of these regulators a clear statutory objective, ensuring that unelected technocrats do not decide high policy, and that we the people, largely via our elected representatives, can track whether a policy regime is working broadly as intended. Ofcom’s principal statutory duties are “(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.” That is vague to the point of being vacuous (a problem that has plagued the much older US regulatory commissions, gradually sapping their legitimacy), and although there are constraints in the legislation none provides a clear standard.

Many Prospect readers know much more than I about telecoms and the media, and will be able to expose sins of commission and omission in this piece. But do we know quite what we have delegated, or to whom? Britain has become a bit casual about power: a constitutional democracy should have some principles constraining who wields the power of the state, and on what terms. Given how many of our laws are set by regulators, this should not continue to be sidelined by debates, however important, about the second chamber, judicial review and devolution.

Unelected Power by Paul Tucker is published by Princeton University Press