Never say never to foreign ownership

To read the coverage it got, you might have concluded that the only thing Lord Puttnam's report on the Government's proposed communications legislation had said was that foreign owners should not be allowed into mainstream British broadcasting.

In fact, that wasn't what Lord Puttnam and his joint committee of MPs and peers said at all, and I'll return to the point in a moment; but the real meat of their report lies in a host of other recommendations, many of which raise important points of principle.

Their proposal, for example, for a "plurality test" to be used alongside competition policy when judgments are made on media ownership is bold and sensible. Safeguarding plurality means making sure that across the various forms of media we, the audience, receive not only many different points of view but that they come from a range of different sources (and owners) too.

The report's recommendations about the operation of the programme supply market also merit attention. The draft Bill has had little to say about the relationship between the creators of content and the broadcasters of content. Yet without the creative flow, the broadcasting output will at best be diminished and at worst dry up completely. Trust a film-maker like Puttnam to spot the creative gap!

He wants the BBC to fund its fair share of programmes from independent producers, not just in the dead of night but in peak time; he wants Ofcom to monitor all the broadcasters' performance on this; and he wants the competition authorities to ensure a fair market in intellectual property rights for television so that the creative people who have the ideas benefit from them. These should indeed be important aims for Ofcom.

The Puttnam committee touches on the role of Ofcom in relation to the BBC, although I fear they have baulked at the crucial issue of whether Ofcom should have an ultimate role in overseeing the BBC's responsibility for fulfilling its public service remit. They do, however, make an important recommendation, that the Government's proposals for Charter renewal for the BBC – due in 2006 – should be published before the Communications Bill is considered by Parliament. They are in effect saying that the relationship between the BBC and Ofcom is still up for grabs, but the Charter is the place to do it, not the Bill.

There will be much debate about this point when the Bill comes to Parliament in any case. The most sensible approach would be to leave the board of governors in place as the overall managers of the BBC, but to give the final "back-stop" regulatory authority to Ofcom rather than leaving it – as at present – with the Secretary of State. The BBC, after all, is a fiercely independent public service broadcaster. I'm not sure that having a politician in control is the best way to secure that independence.

One of the most important tools that Ofcom will have is the obligation to prepare an overview report on the state of the whole of public service broadcasting, including the BBC.

It is, however, the foreign ownership question – and the Government's apparent instant dismissal of the committee's view that Ofcom should decide on the issue – that has dominated the coverage. Yet what Puttnam has said is "not yet", rather than "never". He and the Government are not a million miles apart. Why don't they achieve consensus by putting a permissive power to open up ownership in the Bill, but only to be activated after Ofcom has reviewed the issue?

It is important that the Government is seen to be taking full and proper account of the committee's report. If they don't, they will devalue the whole of this rather brave experiment in pre-legislative scrutiny. After all, what everyone has said is that the process now has to be one of making a basically good Bill even better.

The writer is former Secretary of State for Culture, Media and Sport