Alan Rusbridger (Guardian editor):Thank you for this opportunity to address the inquiry at such an early stage. I wanted to add to some of the context which we hope this inquiry takes into account, as well as Guardian News and Media's main areas of concern.Firstly, we hope that it's apparent to all that the events that led to this inquiry were shocking and immensely damaging. Damaging because they impacted on the trust in all journalists. Shocking, for what they revealed about one powerful and dominant company; about the responses of the police and the flawed nature of regulation; about the limitations of parliament and the initial unwillingness of much of the press to write about what had been going on at the News of the World.There was, in short, a failure of the normal checks and balances in society to hold power to account.The inquiry is being held, as you know, at a time of existential threat to the idea and sustainability of journalism itself.Commercially, newspapers may struggle to survive in the form in which they currently exist. Digital media have sucked advertising out of the printed press. Circulations are declining at a rate of up to 10% a year. While digital audiences are growing fast and the possibilities are great, no digital revenue model yet offers certain hope of maintaining editorial endeavours at anything like their current levels.Editorially, the notion of journalism itself is being transformed.Until recently a newspaper was something produced by a relatively small number of people in the know for a large number of people who weren't in the know. Now virtually everyone has the capacity to publish and to inform themselves. The once-a-day deadline has been replaced by a 24-hour continuous news cycle. Newspapers are moving from text to a combination of video, audio and data as well as text.There is a convergence of media which will have implications for readers and which may well have implications for regulation What was once a one-way publishing process is now more responsive.Most editors are alive to the potential benefits of harnessing the ability of others to contribute. They are beginning to think: "If we add what you know to what we know, we may end up with a fuller, better picture."We also live in a world in which every reader becomes a potential fact checker. Social media allows anyone to respond to, expose, highlight, add to, clarify or contradict what we write. We have the choice whether to pretend this world of response doesn't exist, or to incorporate it into what we do.The more we incorporate it, the more journalism becomes, as it were, plastic. There will be less pretence that we are telling the whole truth and nothing but the truth about a story, frozen at the moment it is published – what Walter Lippman in 1922 called the confusion between "news" and "truth". A journalist today lives with the knowledge that there will be an external reaction to much of what she or he writes within minutes of publication. Journalism today is often less a snapshot, more a moving picture.Three more pieces of context, especially given the title of your first module.First, readers are, as in the rest of their lives, consumers. They expect organisations, whether public or private, to be responsive and accountable. Newspapers have often been poor in responding to challenge.Secondly, privacy is a not a fringe concern: it is mainstream.Virtually every citizen is becoming attuned to what a significant factor privacy is in the modern world. Anyone who has a Facebook account; who uses Google; who is treated by the NHS; who talks to the police; who has an Oyster card; who drives too fast; who shops at Tesco; who has insurance; who puts their bins out on a Thursday night; who banks online; who has a mobile phone – everyone is more conscious about privacy and how organisations, public or private, handle it.Thirdly we are, as citizens, more conscious of the idea of a rights-based society, with consequential responsibilities.I hope this adds to the context.Clearly, a major focus of your attention in Part Two will be phone-hacking itself. Equally important, in our view, in Part One is to look at the failures of the 18-month period once the "rotten apple" defence had been exploded by the Guardian – ie, from July 2009 to late January 2011.These months are, it seems to us, worth examining because they show the dogs that didn't bark. Why didn't they? What accounts for the reluctance of the police to investigate phone hacking properly, even in July 2009? Why did it take four inquiries before they took it seriously? Why did senior officers make untruthful statements about what had happened? Were MPs intimidated or threatened? Why did the PCC fail so lamentably in its attempt to get at the truth? Why, initially, was there a widespread reluctance among other journalists to touch the story? Why did it take an American paper to see the significance of an issue to which many British journalists appeared blind?To give one example, not yet raised, I believe, in the inquiry: no British news editor apparently considered it interesting that a former NoW journalist was, in November 2009, awarded the stunning sum of £800,000 for suffering what an Employment Tribunal regarded as a culture of bullying at the newspaper under its then editor, Andy Coulson.This record pay-out and verdict against the man who was about to walk through the front door of Number 10 were not judged to be newsworthy. But a culture of bullying in any organisation is important: it may be a highly pertinent to ask whether journalists on the paper felt intimidated and did things they knew to be wrong.I respectfully suggest that the inquiry might like to ask whether this was the case within the NoW – and, if so, what safeguards can be built into news organisations in future so that journalists, already working under ever-increasing pressure and in the context of financial insecurity, can exercise some moral choices about things they cant square with their consciences.The answers to these questions about the response to the phone-hacking revelations are vital ones for anyone who cares about the health of a democracy. Did people, both internally and externally, feel a fear of News International? Was its influence across many aspects of British political and cultural life simply too dominant?How did News Corp leverage its commercial, political, journalistic and (as we now know) outsourced criminal muscle?The second issue relates to internal practices – in particular those which related to an honest recognition of what journalism is.In my statement to your inquiry on press freedom last month I quoted David Broder, the former Washington Post commentator, and his definition of what a newspaper was – a "a partial, hasty, incomplete, inevitably somewhat flawed and inaccurate rendering of some of the things we heard about in the past 24 hours ... distorted despite our best efforts to eliminate gross bias by the very process of compression that makes it possible for you ... to read it in about an hour".That passage, and exposure to the American tradition of public editors or ombudsmen, inspired me to appoint Britain's first Readers' Editor in 1997.We note with encouragement that, since the start of your inquiry, two other newspaper groups have decided to publish regular corrections and clarifications columns on page 2. We would be happy to share with you our thinking and experience based on nearly 15 years of running truly independent columns, and the value they bring for the newspaper and for readers.This very local, responsive form of regulation – what counsel to the inquiry termed, I believe, "internal regulation" – seems to us the cornerstone of responsible journalism and has a material impact on culture, practice and ethics.Thirdly, we have already suggested that the industry might profitably learn from the thinking of others who face similar challenges in relation to ethical dilemmas. You are aware of, and counsel has noted, the questions which former GCHQ director Sir David Omand suggested any intelligence operation should consider in relation to intrusions into privacy – the harm test; the public good test; the proportionality; the need for due authorisation; the bar against fishing expeditions.Should you find it helpful, we would like to explore this further – in particular, ways of demonstrating that proper questioning and authorisation had taken place before publication. It seems to us this is an extension of the sort of pre-publication consideration and precautions which many of our reporters already use under the so-called Reynolds doctrine in defamation.Mention of defamation leads us respectfully to suggest that you consider the extent to which your own thinking in respect of regulation could be dovetailed with the current consultation on the Defamation Bill before parliament.I recognise that both you and counsel have stated that the inquiry does not intend to look at the Defamation Bill. However, our defamation laws – widely considered to be slow, costly and illiberal – are often used as a sledgehammer to crack a nut which could equally well be solved by a properly-recognised system of mediation within a system of press regulation.So, if you are minded to entertain thoughts of radical reform of the latter, it might be useful to canvas views on how you could come up with proposals which draw on an awful lot of recent and creative thinking about our libels laws. Indeed, your reference yesterday to mechanisms for dispute resolution, fair and cheap, I believe are at the heart of this.We could stick an M (for mediation) in PCC. Maybe call it the Press Standards and Mediation Commission. It could then be a one-stop shop disputes resolution service so that people seldom had to go to law to resolve their differences with newspapers. It would be quick, responsive and cheap. We could even make this a carrot to tempt people into the fold of independent regulation – ie, newspapers that signed up to PSMC would have clear advantages to newspapers that didn't.On regulation more broadly, it will come as no surprise that we were not impressed by the way the PCC handled phone hacking. We said in November 2009 that it was misleading to call the PCC a regulator, and we note that the incoming chair, Lord Hunt, has gone further: it is absolutely not a regulator in his view. So, it could be argued that, before we abolish self-regulation, we should first try it.No-one has any quarrel with the job the PCC does in mediating complaints. Many people think its code is a good one, if a little too preoccupied with exposing iniquity, and that its adjudications form a coherent body of "case law." Against that, its governance looks opaque, even to people within the industry.Its rules on so-called third party intervention are difficult to follow. If it were not merely a complaints-driven system but a more proactive regime which monitored, investigated and encouraged cultural change, it might make systemic abuse less likely to occur.Its attitude towards privacy, including informal pre-publication advice, is not at all clear. It is a mystery as to why it launched an inquiry into something it was completely ill-equipped to investigate. It was clearly lied to by the industry's main player, yet appears to lack the powers or the will to do anything about it.So, while we think there are useful things to build on, we don't agree with those who think that everything is currently broadly OK, subject to a touch on the tiller. A new regulator clearly has to have teeth – the power to intervene and investigate meaningfully and to impose significant sanctions.I note that you have questioned the overly binary debate of statutory versus self regulation. We agree. If "statutory regulation" implies some form of state control, or licensing of journalists, we would oppose it. The crucial issues, it seems to us, are funding and cost; the expertise/independence of those who run it and serve on it; and that it regulates the whole market – subject, of course, to the definitional difficulties of describing what the "market" is, or will be.If statute can help make independent self-regulation work well, then we would welcome suggested use of statute to be scrutinised properly against concerns of press freedom. For example, there may be carrots and sticks that, once recognised in law or by the courts, solve several of the challenges you have already spoken of in making non-statutory regulation work.As discussed above, a PCC successor might offer a mediation and arbitration service covering on libel. It could deal with privacy.Central to both would be a workable and agreed definition of the public interest that not only do we as an industry agree with, but should also be prepared to argue in any forum.Privacy is more difficult than libel, in two senses. It challenges the industry with the degree to which they would tolerate prior restraint.And, however little we like the developing jurisprudence of the courts, there is the problem that the further a regulator diverges from the remedies available in law, the less likely it is that claimants will use the services of the regulator.Finally – and this speaks to all the modules – it seems to us that there is a pressing need to examine the plurality and competition framework. Only last month the tiny family-owned Kent Messenger group was prevented from taking over seven Northcliffe titles because of the distortion of the newspaper market in East Kent. Yet, until the post-Milly Dowler intervention of MPs, there appeared to be nothing anyone could do to prevent News Corp from effectively doubling its already-remarkable dominance of the British media market by acquiring the 61% of BSkyB it didn't already own.If you come to the view that there was a genuine fear of News International in public life – partly, but only partly, on account of what private investigators and criminal figures were employed by them to dig up – then it is important, we submit, to recommend a regulatory and legal framework which prevents media companies in this country from acquiring too much dominance.All journalists worry about any form of interference in freedom of expression and you will have picked up on a widespread anxiety about whether new forms of regulation might inhibit us. From one point of view no-one currently gains very much from regulation.You might think the FT doesn't really need the PCC to make sure that it stays on the ethical straight and narrow. The Northern and Express titles showed just what they thought of the constant criticism by the PCC by walking out of it. Some regional and magazine editors see little gain and much expense.The PCC, for all its failings, was born from the view that there was an overriding imperative to agree a common professional and ethical code to which we would not merely pay lip service, but which would actually inform everything we do. Only by acting together could we repel the people who really were looking for any excuse to tie our hands. And so we lashed ourselves together in order to be stronger.I think the public has also gained from this. And, in the aftermath of an episode in which thousands of members of the public were illegally targeted by journalists, it's important that we keep them in front of mind.The coming period of examination of the press will doubtless be an uncomfortable one in some respects. We're sure you will have in your mind the good things that journalists do which, more than ever, need protection as well as the work of the 99 per cent of British journalists who wouldn't have a clue how to hack a phone and who don't go to work to snoop into the private lives of others.It's our hope that, with creative thinking, your and your team can find ways of bolstering all the good that flows from the best journalism while cutting out the worst.ENDS(16 November 2011)