Sunday, 10 July 2011

Broadcasting: "fit and proper person" - what does it mean?

Monday 11th July:   The Independent - "Hunt seeks advice over BSkyB takeover" and "News International knew hacking was widespread in 2007"

"News Corp's BSkyB bid referred by Hunt to Competition Commission" - The Guardian 11th July

Telegraph  "News Corp forces government to refer BSkyB deal to Competition Commission"


The Broadcasting Act 1990 is a massive piece of legislation.  Part I of the Act dealt with Independent Television Services including the licensing of service providers and Part I Chapter 1 deals with the regulation of television services generally.  On top of that is another blockbuster - the Broadcasting Act 1996.   This is concerned with Digital television broadcasting and, again, deals with licensing.  Then there is the Communications Act 2003 which sets out the powers and duties of the Office of Communications (Ofcom). 

Note:  The 1990 Act set up the Independent Television Commission (ITC) which existed from 1st January 1991 until replaced, from 29th December 2003, by the Office of Communications (Ofcom).  Ofcom became responsible for licensing.

The phrase "fit and proper person"

The 1990 Act section 3(3):

Ofcom —
(a) shall not grant a licence to any person unless they are satisfied that he is a fit and proper person to hold it; and
(b) shall do all that they can to secure that, if they cease to be so satisfied in the case of any person holding a licence, that person does not remain the holder of the licence; ....

Sub para (b) appears to imply that Ofcom has a role to ensure that they are aware of anything which might affect the license holder's "fit and proper person" status.

The 1996 Act section section 3 has the same wording.

Therefore, the words "fit and proper person" are central to the law.  Unfortunately, we search the legislation in vain for any amplification of the meaning of those, somewhat vague, words.

The word "person" will include
not just individuals but a body of persons corporate or unincorporate - Interpretation Act 1981.

The role of Ofcom:

The Communications Act 2003 section 3 is lengthy but sets out the many factors which Ofcom must consider.  It begins - in s3(1) - with a general duty to further the interest of citizens in relation to communications matters.  This is amplified in later subsections.   Thus, "plurality of providers" appears in s3(2)(d).  Section 3(2)(f) is interesting because it requires Ofcom to apply standards to protect members of the public and all other persons from ... (ii) unwarranted infringement of privacy resulting from activities carried on for the purposes of such services.  Under section 3(4) we see that Ofcom has to have regard to a lengthy list of matters including - (sub para j) - the desirability of preventing crime and disorder.

So what does fit and proper mean?  

If the legislation as a whole is considered it is clear that the scheme for licensing is based very much on public interest matters which are developed by the considerable number of points which Ofcom must consider under the Communications Act 2003 s.3.  It is submitted that the phrase "fit and proper person" should be construed in the light of all of those matters.

News International and BSkyB
News Corporation already has a large holding in BSkyB.  In 2010, News Corporation signalled that it wished to own BSkyB entirely.  Naturally, this raised a number of concerns including the question of plurality and, since the revelations relating to the News of the World, the question of "fit and proper person."

The Liberal Democrat MP Simon Hughes wrote to Ofcom asking them to consider the question.  An informative article is that by Robert Preston on the BBC News website - "Scandal could influence Ofcom over News Corp's BSkyB bid."    The article is of particular interest because it includes the text of a letter sent by Ofcom to John Whittingdale MP - Chairman of the House of Commons Culture, Media and Sport Committee.  The Chief Executive of Ofcom has indicated that - "in considering whether any licensee remains a 'fit and proper' person to hold broadcasting licences Ofcom will consider any relevant conduct of those who manage and control such a licence."

A further interesting article is by Eleanor Steyn - a media lawyer with Michael Simkins LLP - where it is considered how the fit and proper person test has been applied in the past.

More details of Ofcom - its Board etc. may be seen on their website.


  1. Without prejudging I think it is safe to presume that Rupert Murdoch is not a fit and proper person to own BSkyB.

  2. It is far, far too early to say. The situation is by no means simple. It is not just a matter of the Murdoch's (love 'em or hate 'em). The entire company structure will have to be looked at + the directorships + the terms of the actual existing licence + whether BSkyB ( as distinct from NotW) has done anything it should not have done . (There may be numerous other factors - I am not a media lawyer). Further consideration will have to be given to all the detail of any negotiations between BSkyB and the government and regulators. Watch this space - the story has some way to run !!

  3. I think you have missed the essential feature. Whatever process the government appears to go through the Minister will now be looking over his shoulder at Cameron and the political [and electoral] consequences of any decision. For THAT reason, however disguised, I would wager that the bid will be refused.

  4. @ Justice of the Peace - for that reason I will not be taking a bet !! The government is desperate to get off this hook. An ideally convenient solution for the politicians would be for Murdoch to abandon his bid. I doubt that he would do that though it cannot be entirely ruled out. Meanwhile it is reported that the government has been planning a strategy to stop the bid. It was also reported that the strategy must be proofed against judicial review!

    The post above was only aimed at considering what this fit and proper person test actually meant.

  5. I don't believe the issue is "whether BSkyB ( as distinct from NotW) has done anything it should not have done", rather the focus is on Rupert Murdoch.

    Remember that Murdoch's press claimed that Max Mosley was not a fit and proper person...