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House of Commons

Friday 29 October 1999

The House met at half-past Nine o'clock


[Madam Speaker in the Chair]


Motion made, and Question proposed, That this House do now adjourn.--[Mr. Pope.]

9.33 am

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Broadcasting is close to the hearts of many Members on both sides of the House because it is of enormous importance to our constituents. I am pleased to initiate this debate as broadcasting reaches yet another important milestone, perhaps the most significant for society in the longer term.

The debate is particularly timely. One year on from the start of digital satellite and digital terrestrial services, with cable operators beginning to roll out their digital services, and just two weeks since new interactive services began, the digital revolution could be said fully to have arrived. We are beginning to see the strengths of the new technology not only in providing more choice and diversity of entertainment for viewers, but in adding to traditional broadcast services new interactive services, connections to the internet and, more generally, an easy introduction to other forms of electronic communication, which Government and industry are increasingly adopting to conduct business. The latest figures show that 1.8 million people have signed up to digital television in this country and it is growing daily.

Mr. Gerald Kaufman (Manchester, Gorton): Will my right hon. Friend confirm that, when he says 1.8 million people have signed up to digital television, that means that they have signed contracts with commercial providers of digital television?

Mr. Smith: That is correct. Those people have signed contracts either with ONdigital, or with digital satellite through Sky. Over the past couple of weeks, they may have signed up for digital cable services as well.

In the excitement that has been generated by the digital visions of the broadcasting industry, we must not lose sight of the ordinary viewer's needs and of the importance of ensuring that all sections of society have access to the new services. Several issues need to be resolved, and new ways forward need to be debated to ensure that we get it right. I intend to provide as clear a policy and legislative framework as possible, which will enable broadcasters to plan with confidence and, at the same time, ensure that consumers' best interests are furthered and protected. Before we take final decisions, for example, on the Davies report on the future funding of the BBC, it is important for us all to listen to what Members on both sides of the

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House, the Select Committee on Culture, Media and Sport, which is so ably chaired by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), and the world outside have to say.

I raised several important issues when I addressed last month's Royal Television Society conference in Cambridge. I hope that hon. Members will use the opportunity to debate fully many of the key issues and their other concerns.

At the conference, my aim was to look forward and to promote the future of digital broadcasting, but, at the same time, to reassure the public about the safeguards that should be put in place. I wanted to set out the Government's thinking on the time scale of the switch-over from analogue to digital broadcasting as soon as possible because it is a key issue for broadcasters and for the Government, and of immediate concern to viewers.

Viewers need to be fully informed of the advantages and opportunities of the new technology. Those who want to continue simply to receive free-to-air channels need to be effectively protected. I have set two crucial tests that must be met before the analogue signal is fully switched to digital: a test of availability and a test of affordability.

We need to ensure that, at the very least, everyone who currently receives free-to-air analogue channels--99.4 per cent. of the United Kingdom population--is able to switch over and to continue to do so digitally. The digital signal must be receivable by as many people as currently receive the analogue signal.

Mr. Norman Baker (Lewes): I am grateful for that point, but does the Secretary of State accept that the 99.4 per cent. mark that he has set means that 150,000 households will not be able to receive digital television? Should not the opportunity of digital television be taken to ensure that households that cannot receive analogue television are able to receive digital television?

Mr. Smith: I sympathise with the hon. Gentleman's point. He will have noticed the crucial phrase "at the very least". I hope that we can aim for absolutely universal coverage, which would, of course, be better than is achieved under the analogue system. Achieving that level of coverage will not be easy. Over the next two years, one of the main tasks will be to establish the best technological means for doing so. It may not be the case that all the service is delivered to all people by digital terrestrial means. We may need to use other technical means to reach the entire population.

I welcome the work being undertaken by the Radiocommunications Agency, and the establishment by the Independent Television Commission, the BBC, NTL and Crown Castle Transmissions of an advisory board to develop further the frequency plan for digital terrestrial television and the use of cable, satellite and new transmission technologies.

Consumers must not face unacceptable costs when switching to digital services. "Affordable" must mean that prices are within the range of people on low and fixed incomes, including pensioners. It is also essential that those who want to watch only the free-to-air channels should be able to do so without heavy costs. The level of take-up of digital equipment will be a key measure of progress. I want to ensure that at least 95 per cent. of consumers have achieved access to digital before the switch-over.

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We also need to ensure that it is easy for consumers to switch between different platforms and providers. The three regulators--the ITC, Oftel and the Office of Fair Trading--are taking forward my request that they advise the Government on options for ensuring that the digital television market does not develop in a way that inhibits competition or sets unnecessary barriers to access to new services. The aim has to be that the viewer can make a ready and easy choice between terrestrial, satellite and cable, and does not have to invest in a tower block of set-top boxes to do so. We want to encourage the development of affordable equipment that facilitates open access as far as possible.

The full switch-over to digital transmission will not happen until the two key tests of affordability and availability are met. That could start to happen as early as 2006 and could be completed by 2010. With the help of the industry, that time scale can be achieved. However, I emphasise that the tests, not the target dates, are paramount. We shall need to make regular checks to measure progress against the two key tests and to check our assumptions against what is happening in the marketplace. I intend to do that through a series of two-yearly reviews, beginning with a formal consultation of the BBC, the ITC, the industry and consumer groups before the end of 2001. The reviews will enable us to take any necessary action to accelerate take-up levels.

It is particularly important to have an independent view from consumers. I am in the process of setting up a viewers' panel, which will assess the evidence provided by industry, broadcasters and the Government at each review stage and will report on the matters that are causing most concern to the public. My intention is that representatives of consumer organisations and pensioners will feed their views directly through the panel.

For switch-over to happen, we need the confidence and support of consumers. It is clear from speaking to consumer organisations and constituents, and from letters that we have received from hon. Members and from the public, that there is considerable confusion among viewers about what digital means and about what services and equipment are available to them. No one is explaining what digital television as a whole has to offer. There is robust commercial competition between companies offering different digital packages, but no one is explaining to the public what digital means. I have invited the major broadcasters, manufacturers and retailers to meet me on 11 November to discuss ways of giving consumers clear, general messages about what digital has to offer, reassuring us about the timetable for switch-over and giving information about the tests that will have to be met.

Mr. Peter Ainsworth (East Surrey): I welcome what the right hon. Gentleman has said about getting together with the industry and other interested parties. There is a need to inform the public about what is available.

The 95 per cent. threshold is potentially a crude measurement. Many households have more than one television set. Does the threshold mean that 95 per cent. of households should have digital television? If so, what

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happens to all the television sets that are not accessing digital technology? Will teenagers across the country find that their bedroom television suddenly goes blank?

Mr. Smith: We do not want to deprive teenagers around the country of access to television in their bedroom. During the next seven to 10 years, the price of set-top boxes and integrated television sets will undoubtedly tumble. That always happens with the development of such technology. A second-hand market in set-top boxes will also develop as people purchase integrated sets and their old sets begin to wear out. The NERA report last year showed that the turnover time for an average television set is about seven years. As people buy integrated sets, they will hand on their set-top boxes to children's bedroom televisions.

The threshold is a relatively crude measurement. It cannot take account of every second or third set that people have. However, it is a useful broad measure of our progress on the tests of availability and affordability, and it has been broadly welcomed following the Royal Television Society speech.

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