Breakthrough in communications?

As chief executive of new super regulator Ofcom, Stephen Carter is one of the most influential people in UK media. Advertisers wait with bated breath to discover whether, with his background in the marketing industry, he will move their intere

As chief executive of new regulatory body Ofcom, Stephen Carter will have considerable scope to promote the interests of the marketing and advertising industry, in which he worked for the best part of two decades.

His background, however, is no guarantee that he will view the interests of brand owners any more sympathetically than other regulators have done in the past. But his former colleagues from the world of advertising say that here, at last, is someone in power who understands the important issues that face them.

Ofcom is expected to open its doors for business this autumn and will oversee regulatory and content issues for broadcast media and telecommunications. Created through the Communications Bill, which is at the committee stage in the House of Commons and is due to be enacted in July, Ofcom brings together five existing regulators: the Office of Telecommunications, the Independent Television Commission, the Radio Authority, the Radiocommunciations Agency and the Broadcasting Standards Commission.

Opportunity knocks

According to Incorporated Society of British Advertisers (ISBA) director of public affairs Ian Twinn, the Communications Bill gives the opportunity for advertisers’ interests to be taken into account in a way they have never been by the Independent Television Commission (ITC).

He says: “ISBA has long hoped that Ofcom’s staff and leading executives would ensure the regulator fully understands and appreciates the role and significance of advertisers in the UK communications industries. As a former chief executive of J Walter Thompson (JWT), Stephen Carter certainly qualifies in this area.”

A key phrase in the Communications Bill says there is a duty to cater for the needs of the “customers of the services of broadcasters” – and these customers could easily be interpreted as advertisers. “Of course, it would be nice for Carter to come out and say that is how they interpret it,” says Twinn. “It is, after all, our members who fund commercial radio and television.”

Ofcom draws back from specifying advertisers as the key customers of broadcasters’ services, but says: “Ofcom will take a keen interest in the advertising sector and its advertising stakeholders.”

Jim Marshall, head of media at the Institute of Practitioners in Advertising, says: “It is encouraging that he [Carter] comes from a commercial and advertising background. The ITC, the Office of Fair Trading (OFT) and the Competition Commission have given scant regard to the issues that affect the advertising industry.”

Until now, it has been the needs of viewers and listeners, followed by those of broadcasters, that have been at the top of the agenda for regulators. Advertisers have been left way behind, he says.

Marshall believes that Carter’s long service at JWT and his brief stint as managing director of NTL will give him a clear view on the proposed merger of Carlton and Granada to form a single owner of ITV. He sees responsibility for permitting and regulating the merger eventually passing to Carter’s office at Ofcom. Carter’s experience of advertising will enable him to understand how important it is to advertisers that the two broadcasters’ sales houses remain separate – and he once went for the job of chief executive of ITV, though he didn’t get it.

What about the competition?

The Communications Bill will scrap the audience share rules forbidding such a merger and the proposed Carlton and Granada merger is being investigated by the OFT. But even so, any owner of a merged ITV would have more than a 50 per cent share of television ad revenue – way above the 25 per cent market share that is usually interpreted as anti-competitive.

So advertisers are proposing a compromise.

They want a single ITV owner that will create great programmes which attract huge audiences – but they insist the airtime sales houses should be kept separate, so competition will allow brand owners to play the two sales points off against each other and try to keep airtime prices down. IPA’s Marshall believes the Government will refer the merger to the Competition Commission and then on to Ofcom. The Communications Bill says Ofcom will work alongside the competition authorities on these issues, and Marshall believes one of its first jobs will be to put in place a system whereby the two sales houses are kept separate and competitive, even though they have one owner.

The advertisers other demand – that the BBC should be fully regulated by Ofcom – is not within Carter’s gift, though his views on it would certainly be taken into account. Brand owners say there needs to be a “level playing field” between the BBC and the rest of the media world, mainly to stop the BBC unfairly encroaching on the territory of commercial organisations.

But ultimately it will be up to the Government to decide how the BBC is regulated, and this will be discussed as the BBC prepares for renewal of the Royal Charter, starting next year and to be completed in 2006. Carter may make a recommendation, and this will be listened to – as one of the most powerful people in UK media.

Many believe it unlikely that Parliament would want to give up direct control over this powerful institution. Carter’s office says: “Part of Ofcom’s responsibility will be to produce a report about the state of public service broadcasting across all public sector broadcasters. It is inevitable that this will be part of the debate on the charter.”

Burning issues

Carter’s first job will be to recruit staff to run Ofcom’s five core departments: strategy and research; content and consumer protection; competition and markets; regulatory operations; and corporate services. Other issues at the top of his agenda will include broadband roll-out, digital switchover, content regulation, access to networks, extending competition and spectrum pricing.

The regulation of broadcast advertising is one area where Carter’s experience may prove relevant. Although JWT has not been known to push the boundaries in its advertising, Carter is familiar with the strictures of ITC regulations, and what might be perceived as indecent, dishonest or offensive. But, it is content regulation, which is the area of greatest controversy for Ofcom, and the way it handles this hot potato will determine whether Carter is seen as successfully managing the inherent contradiction at the heart of Ofcom.

Opposing agendas

A strong critic of the new regulatory body is Professor Steve Barnett of the University of Westminster. He argues the idea of this “super regulator” was conceived at the end of the Nineties, at a time when there were great hopes expressed about the convergence of media and telecoms. With the collapse of the media, technology and telecoms markets, optimism over the technological future has evaporated. Telecoms and broadcasting are businesses with very different regulatory agendas, Barnett argues.

“Competition issues are more important for telecoms, while cultural and content issues are more important for broadcasting. My concern is the free-market approach that is so important for telecoms is in danger of overwhelming the approach to broadcasting,” he says.

There is also the fear that this vast, bureaucratic body will act like a shady Orwellian organisation, working in the background to control what we watch and listen to, allowing the interests of international media corporations to dominate UK broadcasting with little public transparency.

Ofcom denies this and claims it will be in touch with the public through consultation and a consumer panel. When asked how Carter would further the interests of consumers, his office replied: “It is too early to answer this question comprehensively… Ofcom will be very much in touch with the needs of consumers through research, public meetings, consultations and so forth.”

Carter – the man

Stephen Carter is a man who likes to get things done to a high standard without undue delay. It is a trait that could cause him intense frustration in his post as chief executive of Ofcom.

Having worked in the fast-moving worlds of advertising, media and big business, rising to become chief executive at J Walter Thompson (JWT), and then moving to cable company NTL as managing director UK and Ireland, the slow-paced world of civil servants and regulation may come as a shock to the 38-year-old.

JWT deputy chairman Harry MacAuslan says: “I worry a little bit about his patience. I have friends and relatives who are civil servants and the whole system moves at the pace of a snail, and I think he will get frustrated.”

At NTL Carter was an outspoken critic of the Office of Fair Trading, saying that it was too slow in its handling of various issues.

Carter’s former colleagues say he does not suffer fools gladly, making it difficult for those working around him to keep up as words such as sharp, bright, intelligent and clever are repeatedly used to describe him.

None are surprised that he has landed the post of Ofcom chief executive – all agree that his knowledge of advertising, TV and telecoms make him suited to the role.

The Ofcom job was one of a number that Carter has been linked with since his departure from NTL last year. He missed out to Tom Moloney as chief executive of EMAP and Sly Bailey at Trinity Mirror, and was also up for the chief executive of Five, which looks likely to go to Flextech chief executive Jane Lighting. Carter’s friends say the Ofcom job will give him the chance to explore his fascination with politics and the machinations of Westminster.

Although Carter has not been blamed for NTL’s debts, which piled up before he arrived, the Ofcom job will also give him the chance to shake off any negative associations with the cable company.

Explanations for Carter’s drive and motivation vary. Some say he values status, power and money; others claim he has an in-built need to prove himself that stems back to his childhood. And the Ofcom job, while not giving him as much financial reward as he would get as a chief executive of a public limited company, will certainly give him the chance to make his mark.

One of his first tasks at Ofcom will be setting up the organisational structure, by bringing together five existing regulators with different cultures under one roof and recruiting talented people for key jobs.

A former colleague who credits Carter with effectively reorganising NTL around a customer service proposition believes that he will be “brilliant” at setting up Ofcom and finding talented staff as he did at NTL. But he adds: “Having brought them in, he should have maybe let them get on with it a bit more. He gets involved with everything and it might be difficult to do that with the sheer scale of Ofcom.”

A former JWT colleague also believes that Carter finds it difficult to delegate and warns that if a task is not being carried out to his satisfaction, he is likely to intervene and do it himself. Others attribute Carter’s tendency to get involved to having a strong vision and the ability to assert himself when he feels matters are not proceeding at a pace and in a direction he agrees with.

Although known for being a hard worker there will be a limit to the degree that he will be able to get involved with the nitty-gritty, day-to-day operations of Ofcom.

Carter is also described as focused, decisive and “to the point” as Ros King, now managing director of JWT, found out when she was asked to look after Boots’ advertising account. She had expected to receive a detailed brief from Carter, but was told “Don’t fuck up Christmas” – a crucial trading period for the retailer.

Another former NTL colleague believes Carter’s strategic thinking cultivated at JWT and his logical mind, developed while studying law at Aberdeen University, will help him deal with complex policy issues facing Ofcom: “One of his great skills is to be able to cut through to what the issue is and sort it out.”

His former colleagues believe he is intrinsically fair, principled and hard-nosed and will not be swayed by either the big players in the media industry, such BSkyB, or any previous allegiance to NTL.

He is known for being opinionated to the extent that another former NTL colleague warns: “When you work for Carter it is crucial to have your own views and to make sure he knows and understands them, otherwise he will impose his own. He can be very dictatorial if the situation demands it.”

There are two sides to the man according to one former colleague at JWT: “He can be very rude and can ride rough-shod over people, but he can also be incredibly charming and very witty when in a social mood.”

Despite his hard-nosed image, Carter is credited with having a sense of humour and is able to take a joke. His penchant for Fair Isle tank-tops made him stand out in the corridors of the ad agency JWT so much so that at his leaving do his colleagues turned up dressed in tank-tops.

A prodigious networker, it is his charm and wit that is likely to stand Carter in good stead in smoothing the egos that he will no doubt encounter in his new role. Former colleagues agree that he is astute at tailoring conversations and understanding exactly what people want of him.

Former colleagues believe Carter is not Whitehall mandarin material and will tire of Ofcom after a few years: they are already speculating about what he will do next. Politics is an option, but not one that is particularly well-paid and Carter may find that his interest in the subject wanes after a few years as a regulator. Others believe he is destined for a chief executive role at a FTSE-100 company.

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