Select Committee on Welsh Affairs Second Report

19.  Memorandum submitted by BSkyB


  BSkyB operates both an analogue satellite television platform and, since 1 October 1998, a digital satellite television platform—SkyDigital. For both platforms viewers require a system comprising a satellite dish, a set-top box decoder and a viewing card from BSkyB through which access to and payment for channels is controlled. Any broadcaster, not just Sky, can access either platform. Sky does not own the satellites on which it leases space and all-comers can use Sky's "conditional access" technology (regulated by Oftel in the digital television market) for encrypting/decrypting television services.

  The analogue satellite service, launched in 1989, now carries over 30 channels specialising in many different genres, including general entertainment, sport, films, documentaries, news, comedy and music. The majority of these channels are non-Sky owned.

  Sky itself wholly owns 12 channels, including Sky News, Sky One, the Sky Sports channels and the Sky film channels—Sky Premier, Sky Moviemax and Sky Cinema. Many of these channels are also made available to viewers through cable and digital terrestrial television (DTT).


  Sky Digital represents a step-change from the analogue service, offering viewers a whole range of new and innovative services and much greater choice, convenience and value-for-money.

  As well as carrying most existing Sky and other broadcasters' analogue services, with much-improved picture and sound quality, new channels have been added, a number extended, and others "multiplexed" into several different schedules to give the viewer maximum choice at any given time. The extra capacity generated through digital transmission has also enabled Sky Box Office to offer "Near Video-on-Demand" (NVOD) films and other events so that, in addition to Sky's subscription film channels, the Sky Digital subscriber already has a choice of up to 15 different films each night, with starting times as often as every 15 minutes.

  The abundant bandwidth that digital provides will also turn viewers' living rooms into a personalised, 24-hour High Street. British Interactive Broadcasting Limited (BiB), a company jointly owned by BSkyB, BT, Matsushita Electric and Midland Bank, will provide an interactive television platform that will enable leading high street businesses to offer interactive services including home shopping, banking, travel and holiday services. The BiB platform will also have the capability to offer educational programmes, specialist local community and national public information services and e-mail. All these services will be available through the same digital satellite set top box that gives access to digital satellite TV broadcasts and which is connected to an ordinary telephone line. Subject to final regulatory approvals, it is anticipated that BiB's interactive services will be available to digital satellite TV subscribers from the spring of 1999.


  In addition to digital satellite there are two other ways in which viewers may receive digital television—cable and digital terrestrial television (DTT).

  Launched on 15 November 1998, DTT is delivered through a land-based transmitter network and received through roof-top aerials. It offers viewers a more limited range of channels and services than digital satellite.

  None of the UK cable networks is currently carrying digital television, although at least some of the network will begin digitalisation in 1999. Digital cable will offer a similar range of channels and services to that currently provided by Sky Digital.


  DTT and digital cable will carry all existing public service free-to-air channels—BBC1 and BBC2, ITV, Channel 4, S4C and Channel 5—as well as new free-to-air digital services provided by the BBC (BBC Choice and BBC News 24) and ITV2.

  DSAT will carry all existing and new free-to-air public service channels apart from ITV, in spite of the fact that this channel attracts 32 per cent of all UK television viewing. Viewers will not have to take any pay-TV services from Sky or any other pay-TV broadcaster in order to receive free-to-air services through digital satellite.

  S4C, in addition to Channel 4, is expected to be available to viewers free-to-air in Wales through the digital satellite platform from early 1999. Depending on its strategic aims and programme rights agreements, S4C will also have the ability to distribute its service to viewers living outside of Wales via digital satellite.


  The Committee also requested information on the impact of satellite broadcasting on Welsh viewing habits. While Sky has no information available on this question for Wales specifically, research is available on national viewing habits in homes which receive multi-channel television via cable and satellite. Attached to Annex B, therefore, are two diagrams demonstrating the aggregate national viewing percentage share in satellite and cable homes for the week ending 15 November 1998 and, for comparison, the aggregate share of national viewing in the same week in homes with no multi-channel television.


  ITV's decision not to transmit its free-to-air public service channel (described by ITV as "the nation's favourite channel") or its new free-to-air channel, ITV2, on all digital platforms will disadvantage many viewers in Wales. Instead, digital ITV and ITV2 are currently available to viewers through the digital terrestrial network only.

  This decision is preventing a large number of viewers in Wales (and millions throughout the UK) from enjoying the benefits of these services. Unlike digital satellite, DTT does not extend across the whole of the UK and does not cover large parts of Wales. The two maps attached at Annex C[9] indicate those areas of the UK and the HTV region (with Parliamentary boundaries indicated) which do not currently receive digital terrestrial broadcasts of digital ITV and ITV2.[10]

  Coverage will evolve as more digital terrestrial transmitters are switched on between now and the end of 1999. However even when the digital transmission network is completed at the end of 1999, a Report[11] commissioned by the Department for Culture, Media and Sport has shown that between five per cent and 10 per cent of the UK's population will still be unable to receive any digital terrestrial broadcasts. There is currently no detailed information in the public domain which accurately describes those areas which comprise this excluded 5 per cent to 10 per cent, but it would appear that people living in parts of Wales, Scotland, North-east and North-west England, and East Anglia will be worse affected. Even within DTT coverage areas, new aerials or aerial adjustments may be required for many viewers.

  The predicted coverage of some DTT services will also be much less than the above figures. The ITC's own submission to the government consultation "Television: The Digital Future", for instance, suggests that only around 70 per cent of the UK will receive "Multiplex D" (an ONdigital multiplex) with the supposition that this may reduce to as little as 55 per cent if people do not replace their existing aerials.

  BSkyB believes that ITV should use its privileged position as a powerful public service broadcaster with responsibility, and this includes making its free-to-air services available as widely as possible on all platforms. Only in this way will all viewers in Wales be able to receive all free-to-air public services. Every other public service broadcaster—BBC, Channel 4, S4C and Channel 5—has adopted "platform neutrality" in order to be available in digital regardless of whether consumers acquire DSAT or DTT. By not placing its channels on digital satellite ITV is discriminating against viewers in areas of Wales with little or no DTT reception.

  In addition, viewers in Wales who are within DTT coverage areas, but who opt for a digital satellite system instead, will at additional cost have to adapt their box in order to receive digital ITV and ITV2.



  It is through its free-to-air 24-hour news channel, Sky News, that Sky will provide coverage both of the Welsh Assembly and Welsh Assembly elections. The cost of this coverage will come out of the existing Sky News budget.

  As Europe's first 24-hour dedicated television news channel, Sky News is watched by over one million UK viewers a day, and services 70 million viewers in more than 40 countries. It is able to bring immediate coverage of breaking stories from the UK and around the world. The Millbank studios in Westminster serve as a base for up-to-the-minute reports and topical political programmes. PMQs focuses on the Prime Minister's weekly Parliamentary Q & A; Sunday with Adam Boulton features in-depth, extended interviews with leading political and public figures; and Forum gives audiences from around Britain the opportunity to share their views with leading political figures.

  Sky News is currently available to viewers through analogue and digital satellite platforms, but not DTT. Sky News is also available to cable operators.


  While details have yet to be finalised, Sky News is planning to broadcast extended coverage of all three elections taking place on 6 May 1999—the Welsh Assembly Elections, the Scottish Parliamentary Elections, and the Local Government Elections. Viewers can expect to see a level of coverage on 6 May on a par with that of the May 1997 General Election. Sky News will also be following the progress of each campaign prior to 6 May, with coverage building as polling day approaches.

  In addition, Professor Michael Thrasher, Sky News' Election Consultant, is co-authoring with the BBC, ITN and the Press Association a media-guide to the 1999 British elections.


  Sky News' coverage of proceedings and issues surrounding the Welsh Assembly will take their place alongside all other news items, and will be subject to normal editorial judgement as to what is of interest to a national news audience. Plans are currently proceeding on the basis that Sky News will have access to a live feed from the Welsh Assembly, as well as recorded proceedings, from which it will draw as and when necessary. It is expected that Sky News will carry live coverage of the opening of the Assembly.

Ray Gallagher

Director of Public Affairs

10 December 1998

9  Not printed. Back

10  Based on information provided by the Digital Television Group (DTG). Back

11  NERA/Smith, January 1998-"A study to estimate the economic impact of Government policies towards digital television". Back

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