Examination of Witnesses (Questions 120
- 139)
WEDNESDAY 30 JUNE 1999
MR DOMINIC
MORRIS CBE AND
MR HENRY
PRICE
120. 60 per cent as well as on terrestrial?
(Mr Morris) 100 per cent, we hope, will be able to
get the proceedings on the floor of the House. 60 per cent will
be able to get the select committee proceedings.
Mrs Gordon
121. Does that include on line to boost it up
a bit?
(Mr Morris) I think there is an element of duplication
of different subsets. Yes, you could get households that were
DTT and had a personal computer in the home. If you took five
or six years out from now, maybe 10, 20 or 30 per cent of those
houses would have broadband access and if you have an Online service
with pictures etc., they would be able to get it. What you cannot
guarantee is a population match, that everyone who has DTT will
have a PC with broad band access.
Mr Lepper
122. We have talked about terrestrial and cable
and to some extent about satellite and availability there. I do
not think I quite caught all that you were saying.
(Mr Morris) Physically, satellite can reach 90-something
per cent of homes. It is in the cities where there is building
shadow which prevents putting up dishes. Physically, it can reach
most of the population. Our projections of those are in effect
of commercial or consumer preference take-up where perhaps a third
of households will go for the satellite option; maybe a bit more,
maybe a bit less. The issue of reaching them is simply the cost.
There is plenty of transponder capacity on the satellites at the
moment. It is not a constraint as it has been in the past. It
is simply going to the market and buying it by the yard or buying
uplinks from a range of competing operators.
123. In terms of the three options, cable, terrestrial
and satellite, satellite is the most expensive?
(Mr Morris) No, but cable is the cheapest if you can
get access. Bandwidth costs are very small. It is a straightforward
issue for them of whether they see in effect a marketing advantage
or a public service advantage in offering additional band width
capacity. They are moving from a position where they pay people
to go with cable companies to charging people.
Mr Hopkins
124. I am most interested in my first meeting
on the subject and I am particularly concerned about access to
future service for different socio-economic groups, in particular
the less well off. What is your guess for ten years' time? Effectively,
would every household, however rich or less affluent, have access
to this service, or is it likely to be for those who are best
equipped to buy the more expensive equipment? I am in a situation
where I have cable now and if we need another service we just
buy it. Some people are not in that position.
(Mr Morris) The current takeup of multi-channel TV
is surprisingly concentrated in socio-economic groups C1, C2 and
D. They tend to be earlier adopters of media rich technologies.
For the very poor, I think it is going to be more difficult. One
of the reasons why we have felt it right to launch new services
such as BBC Parliament and BBC Knowledge is to ensure that there
is a free to air service available to everybody from rich to poor,
that it is not a subscription issue, and that as long as people
get the equipment they can do it. Digital television equipment,
the platform operators, BSkyB and On Digital, are in effect doing
free rental of the box but in return for people paying subscriptions
for at least a year, £100 or £150, to take a package
of services. Over time, we expect box prices to come down quite
considerably and for them to be a reasonably cheap, disposable
item. PCs and Online: certainly the American experience is that
it is moving quite a long way down the demographic line. PC usage
is no longer for young anoraks, if I can put it that way. It is
for both sexes, a wide range of age groups and a wide range of
demographics. Again, for those at the poorest end of the scale,
a capital price of £1,000 plus and the line cost for high
quality line must be a deterrent.
(Mr Price) Internet access is becoming cheaper quite
rapidly. There is free Internet access from organisations like
Freeserve but also computers are getting much cheaper. Many of
the set top boxes that we are thinking about as digital TV now
will be having the Internet in them so they will be another way
to get on the Internet. I would have thought that Internet access
will be coming to a point in ten years as colour TV was ten years
after its launch, which was getting to 90 per cent penetration.
It has a very steep rise and in the last couple of years computer
penetration in households has been getting very high[2].
Mrs Gordon
125. I am interested in Online. Given that the
government has an agenda to put citizenship as part of the national
curriculum, how do you see thatfitting it, and about the quality
of Online? You say that it is that quality you showed us in offices.
When will it reach schools?
(Mr Morris) We think it will reach schools
much earlier than homes. There is a strong incentive. I think
a lot of the telecommunication companies and cable companies understand
the national desire to have schools well equipped with wide bandwidth.
There are plenty of computers in schools now. It is more or less
there in quite a lot of secondary schools. Within the lifetime
of this Parliament, you could expect to see the majority of secondary
schools have some places in those schools where you have high
bandwidth access to Online. That is one of the reasons why we
are doing things like launching news in schools as part of our
Online service so that we can take news and citizenship as part
of that, as the technology allows.
(Mr Price) One of the big advantages
of Online is its flexibility in the service we offer. If you commit
to a television channel, you have to enter into a long term contract
with the distribution provider. The figures that Dominic was talking
about, the half to one million, tend to be tied up with typically
a ten or five year contract. That rally does bind you into something.
If you find a little way down the line that this is not exactly
what people wanted, it is quite difficult, whereas Online you
can actually say, "Why do we not start in sound only?"
As you know, you get absolutely excellent sound now Online. You
may like to think about things like can you present something
with Online with still pictures. Rather than having a low quality
video, you could put sound with pictures of the Committee, perhaps
taken once every second, so people could have quite a good quality
of picture of who is there and perhaps even annotated. You might
find a way of annotating who is speaking at any one time. There
are imaginative solutions for Online. I think you will see it
develop as time goes on and band width opens up more and more
to the home. You can begin to think about offering real video.
Mrs Gordon: I have seen the presentation
of the CD-ROM on Parliament which I thought was very good. I do
not know how far that is down the line.
Mr Stunell
126. You hinted with great delicacy that maybe
not a lot of people would want to watch this. I wonder if you
could give us some estimate about current viewing figures. Bearing
in mind that the more different media we present this on the smaller
the audience on each, given that there is a finite audience, perhaps
you could give us some estimate of how you think the viewing there
might go?
(Mr Morris) We too want that estimate because since
we launched BBC Parliament we are looking for figures that will
tell us what sort of numbers are tuning in and for how long. The
cable companies' experience, when they ran the parliamentary channel
as part of their subscription package, was I think the low tens
of thousands in terms of audience share. Online: you will have
your own figures for the number of page impressions Hansard receives
each month. Certainly, within the BBC, news as a whole is the
single most powerful driver. It is about 50 per cent of our 100
million page impressions a month, of which Parliament is a part.
On can talk in terms of and expect page impressions running into
the hundreds of thousands—possibly higher than that—per
month for Parliament.
(Mr Price) This is having to project something into
the future, particularly if it is Online, but we know for instance
we offer BBC Wales News which appears in S4C in Wales Online as
a stream video service. We get between 5,000 and 10,000 people
streaming that on a regular basis. We are talking about the sort
of services that we have streamed, of that sort of order. I would
have thought you would not be far expecting that sort of figure
if you had tens of thousands of people coming. If you have an
audience you think is of the order of tens of thousands, the Online
service might be a very good way of providing the service to that
sort of audience.
127. I have not yet got a very clear picture
of the matrix of the cost of the various routes that you describe
against the audience size—if you like, the cost per head.
I wonder if you would be able to give us some sort of view about
that?
(Mr Morris) If we may, we will send you written evidence
with more workings out rather than my doing it on the back of
a fag packet here and now. All one can say with a reasonable degree
of certainty is that the cost per head is substantially higher
on television than Online. You will get at least the same amount
of, or nearly the same amount of, viewing or access to that information,
whether it is text, video or whatever, from Online that you will
on television.
128. To some extent that is because the viewer
is paying as they do it on the Online service in some way or another,
but I think I heard you say before that in any case you would
want to maintain a digital terrestrial channel which is available
to 95/99 per cent of customers, which would be like the mainstream.
You would see the other media that we have described as being
the second channel, or would you see the first channel being available
on the alternative media as well?
(Mr Morris) BBC Parliament, the coverage of the floor
and weekend coverage of select committees, our aim and indeed
in practice, is to have it available on digital terrestrial. It
is available on digital satellite and will be available on digital
cable as soon as it rolls out. Every digital household will have
access to that channel, free at the point of delivery. The second
channel, if you want to go down a broadcasting mode, it would
have to be on satellite and cable only which gets to 60 per cent
of the population, bolstered by Online.
Mr Gale
129. The problem we face, Mr Morris, is that
the nature of the work of the House of Commons is changing and
has changed dramatically I think since this experiment, as it
then was, was first introduced. The nature of the work of the
House has shifted, as we all know, from the floor of the House,
to a very significant extent, to committees, to special select
committees, special standing committees, to a proposed second
chamber and indeed to national parliaments in Scotland, an assembly
in Wales and a parliament in Northern Ireland. They will have
to make some arrangements for their own coverage. Those responsible
for broadcasting are going to have to accommodate them as well.
The availability of spectrum is both difficult in terms of coverage
of the floor and inadequate in terms of the coverage of what is
really happening in the House. We all know that most people see
out of context clips on the nine o'clock news or whatever time
is the news on the other channel and very little else. The impression
that the public has of the work of the House of Commons is therefore,
in the view of many Members of the House, very distorted. What
we want to seek to do is to help find a way forward and make recommendations
that will enable the BBC, who are now charged with the responsibility
of providing the parliamentary channel, to also provide additional
coverage of all the other parliamentary outlets that I have referred
to. That has to be paid for. It is a moot point whether the existing
arrangements with the existing broadcasters can be expected in
the foreseeable future to go on paying for all of it and we have
to find an outlet for it. Can you begin to put yourself on the
line rather more than you have already and start to say, as the
controller of policy development, how you see the BBC and the
BBC parliamentary unit going down that road and achieving what
we know we would all like to achieve?
(Mr Morris) I am perfectly happy to do that. I understand
you have invited colleagues from BBC news and the BBC parliamentary
unit themselves to come and give evidence to you. I hope what
I say now will not give them any grief when they come before you.
The first point is that we have committed to providing gavel to
gavel coverage of the floor. That said, we are as conscious as
anyone that the nature of the Westminster Parliament itself is
changing and I am sure we would not want our coverage to be locked
into an inflexible mode of: it is all happening on the floor;
therefore, that is what we will only ever cover. Our aim and hope
is to be able to do more flexible coverage. Sometimes if the floor
is quiet, one might want to move up to some important select committee
that is taking place. In terms of developing beyond that limited
bandwidth, it is no secret that we would like, funding permitting,
to provide further and better coverage of Parliament. We are looking
to do so partly through Online and our Online site and partly
through cable and satellite if—and this is a question as
much for Parliament and government—Parliament and government
take the view that some of our services need not be universally
available through all platforms. That is quite a big step and
it is a step I think that Parliament itself would want to contemplate,
even for a parliamentary channel. I come back to our hopes for
Online. We see considerable potential, as we have touched on,
in archiving and providing for both the informed home viewer but
also for your audience among the companies, among those who have
a strong commercial interest in understanding and following the
legislative process and in schools, so that people are able to
get greater richness out of proceedings. They do not have to be
plonked in front of a screen exactly as it is happening but can
follow through as part perhaps of some school research projects
a particular subject strand through its lifetime in Parliament,
whether on the floor or in its earlier status in a select committee
etc. Those are both funding issues, expense and priority issues,
that we are addressing; they are also to a degree technology issues.
We are working closely with people such as the Cambridge University
Engineering Department who have some very good automatic archive
tagging systems which we believe could be used with our own existing
archive to provide some quite exciting proposals and developments
Online in how we cover Parliament and how we make its proceedings
available to all those people who have access to it. It is not
a static picture. I come back to the point: if one wants universal
television coverage, it is constrained by band width on the terrestrial
platform.
130. Should we then be thinking, in terms of
the existing channel that we have becoming more readily available
to more people on digital terrestrial television, and accepting
that perhaps the broadcasters may, with the approval of the House,
feel it is appropriate to move away from the floor of the House
on occasions to, as you say, possibly a more interesting select
committee that is taking place at the same time and live with
that; or do you think we should say, "This is the ideal.
This is what we want to cover at its broadest, so we will develop
now, at the dawn of the digital age, a unit that is capable of
doing all those things and allowing that coverage to find its
outlet as the outlets develop"?
(Mr Price) There is no doubt, with the way things
are developing, that it would be a great benefit in being able
to have something that was flexible, something that could cope
with things that come up surprisingly. One of the things we have
learned in the last couple of years, looking at technology, is
that things move at such a pace now that you are constantly being
surprised by new opportunities. That might be something that you
could start small and perhaps, as you say, take a channel and
say, "We will make it more flexible within itself" so
it is not governed to one thing. At the same time, you want to
be able to take the opportunity to go Online and offer services
Online and I would have thought having a unit to look after that
would be quite sensible.
(Mr Morris) I am not sure that necessarily they are
either/or options. We are, as the BBC, committed to providing
as much and as effective a coverage as we can of as much of the
House's activity as we can, and the second chamber's, through
whatever means: one channel guaranteed, and it is an early priority
to get it onto DTT as we can compress and make better use of the
band width we have. That is a two or perhaps three year time horizon,
perhaps sooner if we are lucky, doing more on Online but in effect
that is a public organisation seeking to provide, with the consent
of the House, the best coverage it can. That is not to say that
the House itself should not think of having a unit which imaginatively
considers its own proposals; how do we want to get out to schools?
How do we want to get out to those with a particular interest
in the regulatory process? Which things do we think of the greatest
spread of activities that the House is now doing ought to be brought
into coverage in some way? The two could complement each other.
131. Are you suggesting the possibility of two
separate units?
(Mr Morris) I am saying I think that there is a strong
case for the House itself having a unit with a view that is clear
of what it wants to do. We are committed to doing certain things,
come what may, anyway, because we believe that is important for
the access to people to this part of our democratic process. There
may be things that either technically we could not do or within
a licence fee funded arrangement might be quite difficult: if
the House wanted to say, "We only want to make something
available to satellite viewers" and Parliament and the government
said, "The BBC's role as it has traditionally been is to
make things available to all viewers". Either Parliament
needs to make a decision, "We accept the BBC should do it
and it could only go to a limited number of viewers", or,
"We do not take that decision but we want it done. Therefore,
we will have a unit to do that bit ourselves."
Mr Lepper
132. You talked about the potential for archiving.
I took you to mean commercial potential.
(Mr Morris) I think it has both public service or
democratic potential technically, but we believe there is commercial
potential for the journalistic, commercial, lobbyist organisations
who would want to know and would want to be able to search back.
It is a very good service for them. Subscription Online has proved
itself to succeed with a limited range of products. Disney is
successful and one or two of the other American sites are. This
one has commercial potential but one would want to look at the
business plan quite carefully.
133. As you might know, we have been to look
at parliamentary broadcasting in a couple of places and every
legislature is different in the way it operates, although there
are always certain similarities perhaps among them. I wonder if
you had carried out a similar exercise, if you had had a look
at the way in which the business of making the proceedings of
Parliament is operated in other countries and whether you had
come to any conclusions.
(Mr Morris) Yes, the BBC has. I have not myself looked
in depth. It may be a question to ask our colleagues from BBC
Parliament when they come.
Mr Hopkins
134. I wanted to think rather more radically.
It seems to me that in an ideal world one would have perhaps three
channels dedicated to parliamentary broadcasting, maybe four.
You say in Scotland you have the Scottish Parliament, then there
is our own House plus select committees and standing committees,
and three channels would seem to be a minimum to get proper coverage.
You could get real access to what is being discussed in the political
world. That is not what is on offer because clearly there is a
problem of cost. The only form of broadcasting which is accessible
to most people is terrestrial TV. Terrestrial is limited in the
number of channels available. You have to look to satellite in
particular and cable as well. We have to pay for those separately.
It does not come within the BBC licence. It seems to me that,
if anything was appropriate for public service broadcasting, it
is the broadcasting of Parliament above all. This is not a commercial
proposition, but in a thriving democracy it is very important
that everyone knows what is going on and what is being said, not
just said in the rather ceremonial battles of Question Time. They
are important as well but at the same time they are rather staged
performances. Actually to get into the texture of what is being
said about the big issues in committees—that is the ideal.
It seems to me that really we are talking about funding, and ownership
and control of the other forms of distribution of broadcasts.
If the BBC owned all the cable, it seems to me there would not
be a problem. You would pay for it but you would have to pay for
it in other ways. That might exercise the Treasury somewhat but
if we are serious about making sure that everyone has proper access
to what is going on in our democracy then we have to have more
channels available for all members of the public through their
ordinary television sets than they have now, or when they have
digital sets. This opens up a big question. I would like the BBC
to have a wider spread of channels and much more say and control
of perhaps cable, maybe not satellite, and to have access to more
channels so that when we pay our licence fees we can have a larger
range of channels to choose from on our standard sets, without
paying extra to private organisations. This may be a slightly
more radical view, but it is at least a possible way forward.
I do not think it is necessarily going to happen, but on the other
hand is it a possibility?
(Mr Morris) It is indeed a possibility. It is not
any resistance on the part of the BBC to that concept. The caution
I raised was that it is moving away from a universal licence fee
and a single, universal service. It may be, over the long term,
an inevitable element of the digital future as people's way of
receiving things fragments. If Parliament concludes that that
is a proper and right way forward for the Corporation and that
the funding is there available to do it, there is no difficulty,
hostility or anything from the BBC towards that approach. We certainly
could do through cable and satellite additional channels if Parliament
were happy that only the people who have satellite and cable have
those but they were somehow funded through the licence fee. We
would certainly want on DTT, as the set top box becomes more and
more like the computer in the home over the next five years, to
provide as much as we could through that box in effect as a form
of Online. It comes back to your question about using Online to
get at the other part of the population.
Mrs Gordon
135. Is it too late for us to get another digital
terrestrial channel? You talk about spectrum. If Parliament had
the will to have another channel—I would settle for two;
I know Kelvin wants three—so that you could do gavel to
gavel plus committees and the various other things that go on,
given the finance, is it already too late for us to dedicate another
channel to parliamentary broadcasts?
(Mr Morris) This is about the laws of physics. I will
pass it on.
(Mr Price) It depends what sphere you want to move
in. Can we get another frequency at all the transmitters in order
to provide another batch? Each frequency carries between four
and eight channels. There are six frequencies transmitting from
each mast. At the moment there are in total about 30 something
television channels available. The BBC has four channels that
it runs on its own signal. We have one parked on another multiplex
at the moment because we cannot make room for it and we have BBC
Parliament to put on as well. As Dominic said, hopefully over
the next couple of years we will squeeze ours on six which will
more or less be what the others have. They have all done their
own plans; they have pay per view television; they have films.
They are all full, so the question is how would you then get the
extra parliamentary channel on. You could use the force of law,
which is probably unacceptable, to say, "You must squeeze
up". They other way would be to try to find a seventh channel
at each transmitter. We are in great difficulty there because
we worked very, very hard to get the sixth on. To get the seventh
on, we would probably achieve it in some parts of the country
but nothing like universally. You would probably end up with perhaps
30 or 40 per cent of the country being able to get a seventh multiplex,
which could then carry all the parliamentary broadcasting you
probably envisage. It could carry six channels of parliamentary
broadcasting, but to perhaps only 30 per cent of the population
which is probably not a very satisfactory outcome. There is still
capacity on satellite and cable and you could go and look for
that sort of capacity on satellite and cable now and say, "We
want to buy a big chunk of frequencies or band width to deliver
services like this", but then of course you will only probably
ever get it to two thirds of homes. It is unfortunately not a
very satisfactory outcome and the weak link in the chain is the
digital terrestrial, certainly for the foreseeable future.
Mr Gale
136. It sounds as though what you are saying
is that there is a short to mid term problem that might well be
alleviated by technological development, particularly in terms
of Online?
(Mr Price) Yes.
137. If we go down this road and if we say we
want more coverage of more aspects of parliamentary life around
the regions and here, that clearly has to be paid for. Who has
given consideration to the funding situation as it is at the moment,
bearing in mind that while the BBC were not looking for the parliamentary
channel they have got lumbered with it not of their own choice,
and therefore that has to be subsidised by the contributors to
Parliamentary Broadcasting Limited and also, to a not inconsiderable
extent, by the BBC. Have you given consideration to whether that
is a mid to longer term satisfactory form of funding or should
we be addressing our minds to an alternative?
(Mr Morris) Can I take the two parts separately, which
is in effect the licence fee for the distribution of the channel
and the editorial and preparation work and PARBUL for the actual
broadcasting facilities? PARBUL is not perfect. Very few institutions
in life ever are. It has stood the test of time quite well over
the last 10 or 11 years since televising the House started. There
is an interest among all broadcasters in being able to have some
coverage for main news bulletins as well as the gavel to gavel
and we believe the actual marginal cost of providing the coverage.
If you provide some, having 12 hour gavel to gavel coverage adds
very little, if anything, to that broadcasting cost. It is a feature
of broadcasting. The fixed cost to do that first minute of broadcasting
is huge. You know very well that the marginal cost of going on
from there is tiny. I suspect—and colleagues from BBC Parliament
may have further elaboration—the PARBUL arrangement could
in principle subsist for quite a long time. In terms of the distribution
costs and relatively small editing and oversight monitoring costs
of the channel itself, the BBC did take a view when the cable
companies approached them and said, "Can we afford to do
this amongst the range of priorities we have for the licence fee?"
The answer from the BBC Board of Governors and the Executive Committee
was yes and we should do it. The cost is not huge. It is a number
of millions of pounds each year, part of what we think our public
service remit is about. Would we suddenly leap to doing four channels
through satellite and cable only? When you are suddenly talking
about £20 million, £30 million or £40 million,
with all those costs, one would have to pause and say that if
we are in a position where the licence fee is gently buoyant and
growing, that is clearly a possibility. If one is in a position
where the government has decided that the licence fee should be
flat linked to RPI or less than RPI for whatever reason, then
clearly one has to assess priorities very, very carefully indeed.
Somebody could come along and say, "Can I have another 20
million to do another parliamentary channel?" and we would
say, "Yes, but we also have a problem with fighting for sports
rights; we have a problem with the cost of talent rights going
up and do you know how much that costume drama cost last week?"
I cannot give a hard and fast answer to that question. That question
would have to be addressed in a budget round when we see how can
we balance all the competing priorities.
138. Is it reasonable that the BBC should continue
to pay what it is paying for the Parliamentary Channel out of
the licence fee rather than look for some form of ring-fenced
direct grant of the kind the World Service receives?
(Mr Morris) We believe the answer is yes, because
it is a part of the overall news which the public gets. You cannot
segment easily into foreign, parliamentary, et cetera. It is right
that Parliament gets the coverage. The net additional cost out
of the total news budget is sufficiently manageable that it is
not the cuckoo in the nest, it is a balanced part of the overall
news coverage and we think it is the right thing to do within
the licence fee. There are other programmes we put on which also
have small but dedicated audiences.
Mr Gale: That is very helpful. There
are clearly other questions.
Mrs Gordon
139. Do you market parliamentary broadcasting?
I know C-SPAN in America takes Prime Minister's Question Time
and other parts of the broadcasting. Do you actually market the
broadcasts around the world?
(Mr Morris) BBC Parliament is available in Europe
and the coverage of the satellite footprint makes it available
in Europe. Would we consider putting elements of it on BBC World,
as BBC's commercial news arm around the world? The answer must
be yes. But as one is talking about marketing around the world
in a commercial operation, one is putting together a commercial
news package which has to be as attractive as it can be and that
will tend one to focus on the more stage-managed and more spectacular
things, not necessarily the end which is most useful to UK citizens.
2 See Appendix 2 for forecasts for the take up of digital
TV and Online. Back
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