Select Committee on Broadcasting Minutes of Evidence


APPENDIX 1

Memorandum submitted by Mr Dominic Morris and Mr Henry Price

  

EXTENDING COVERAGE OF PARLIAMENTARY PROCEEDINGS IN THE DIGITAL AGE:

A technological and market assessment

INTRODUCTION

1.  This assessment is made on the assumption that the Select Committee wish to see the following:

    —  universal and convenient access to the proceedings of Parliament, including all Select Committees, to complement the current coverage of proceedings on the floor of both Houses on BBC Parliament;

    —  more scope for "accidental" viewing of Select Committee proceedings, to raise awareness and grow new audiences.

  2.  The key conclusions we would draw are that:

    —  for the foreseeable future, digital television would be an expensive and relatively inflexible means of providing additional coverage on a universal basis;

    —  coverage through online distribution, on the other hand, would be a relatively cheap option and would enable video material—albeit in a relatively basic picture quality—to be made available in a convenient, searchable format.

SUMMARY OF TECHNOLOGICAL OPTIONS

  3.  Other than print, the available mass media through which this might be achieved are radio, television and online.

  4.  In each case, the advent of digital technology means, in theory at least, that there is more capacity available to develop new and complementary services:

    —  In the case of television and radio, digital technology is more efficient in its use of broadcast signals—in short, more information, and thus more channels or stations, can be transmitted through the air or sent along a cable than is possible in the same circumstances but using traditional analogue technology;

    —  in the case of online services, there is in theory no limit to the amount of information which can be made available to people on request. The only effective limits are:

      (a)  the amount of traffic which the world wide web and individual websites can bear: that is, the number of people who wish to access them at any one time;

      (b)  the speed and efficiency with which complex information (such as sound or video) can be downloaded from websites,

    and both of those limits are being increased all the time as the net is upgraded and extended, as personal computers become faster and more sophisticated and as better software is developed.

RADIO

  5.  The advent of digital radio in the UK has the potential of supporting in the short term the creation of perhaps another 10 to 15 new national radio stations, and perhaps double that if, as expected, further radio spectrum is earmarked in the next few years for digital radio across Europe as a whole. Among the BBC's own plans for new services are a dedicated station carrying proceedings in Parliament—an audio version of BBC Parliament. This would provide some coverage of Select Committee proceedings as well as debates on the floor of both Houses.

  6.  However, the digital radio market is likely to be slow to develop:

    —  The economics of radio are less buoyant than television. Commercial players will thus be slower to enter the market with a full range of services than they are proving in digital television, so there will be less enticement for consumers to adopt the new technology;

    —  the cost of consumer equipment—digital radio sets—is very high, at around £500, compared to existing radios. Unlike in television, the commercial companies involved are not subsidising the cost of the receivers to drive growth in the market;

    —  all of which means that the emergence of a sizeable listening population for digital radio is probably at least five years away, and the development of anything approaching universal coverage is much further off.

  7.  Digital radio probably does not, therefore, offer the Select Committee the potential they are looking for.

TELEVISION

  8.  The digital television market is more buoyant, with a greater capacity to develop into something approaching a universal set of services. But it is also a more complicated market.

  9.  The key complication is that although digital television is at its heart a single technology, broadcasters are using this technology on three different distribution systems to get their programmes into homes: digital terrestrial—transmitted from land-based mast to domestic aerials; digital satellite—transmitted from space to satellite dishes; and digital cable—sent along a physical cable into the home.

  10.  The choice of which distribution system to adopt is for the consumer, and a fragmented market is therefore emerging:

    —  since the launch of the commercial digital satellite service by Sky in October 1998, it is estimated that up to 800,000 households may have subscribed;

    —  since the launch of ONDigital's commercial digital terrestrial service in November 1998, around 300,000 households have subscribed;

    —  digital cable has yet to launch—it is planned for later this year—and the cable companies will be hoping to sign up a large proportion of their existing three million analogue customers.

  11.  Although competing delivery systems have existed in the analogue world for some time, terrestrial television still dominates (68 per cent of households have only analogue terrestrial television): most people have simply not chosen to change to a different system. However, as people move into the digital world, perhaps prompted by an announcement by the Government of a date by which analogue signals will finally be turned off, they will have to make a choice between the three competing systems.

  12.  It is generally believed that the three systems will continue to exist side by side, and that there will be a fairly balanced share-out of customers between them. [see chart]

  13.  For this reason, anyone who wishes their television channels to be available universally, to all television households, needs to ensure that they are available by each of the three delivery systems. This is the approach taken by the BBC in respect of its public service channels. But it is an approach which inevitably has a cost attached.

  14.  Last year, the cable companies who had until then been providing The Parliamentary Channel handed over responsibility for funding and supplying the channel to the BBC. The companies argued that they were not able to commit the necessary funding to develop the channel in the way which was needed to build a strong service. This supports the assumption that parliamentary television channels are not a straightforward commercial proposition—in that they cannot attract the necessary levels of advertising or sponsorship revenue (even were it to be thought appropriate to include advertising or sponsorship on such a channel), nor is there a large enough pool of dedicated viewers willing to pay a subscription to receive it.

  15.  The Parliamentary Channel has been relaunched as BBC Parliament, a licence fee funded public service channel available free to viewers. The channel provides gavel-to-gavel coverage of proceedings in the House of Commons, as well as highlights of debates in the Lords and of Select Committee hearings. At a future hearing of this Committee, colleagues from BBC Parliament will set out how they see the channel developing into the future.

  16.  Briefly, BBC Parliament is currently available on analogue cable and on digital satellite. The audio feed only is available now on digital terrestrial television, and we plan to upgrade this to the full video channel in the next two or three years as technological improvements allow more services to be fitted into the available frequencies. We are also negotiating with the cable companies to ensure that BBC Parliament is carried on digital cable, when that system is launched around the turn of the year. So in time, BBC Parliament should be available to every digital household, whether they choose terrestrial, satellite or cable forms of delivery. And our aim is that it should be provided at no extra cost to those homes, as a licence fee funded service.

  17.  As previously stated, going for universality across three competing digital delivery systems has a cost attached for the broadcaster:

    —  with digital satellite, the broadcaster has to buy space on a transponder—effectively the equipment which sends the television signal to earth. There is no particular shortage of transponder space at present, and more satellite launches are planned which will increase the capacity still further. The present cost of securing enough transponder space for a single channel could be up to £1 million, including the cost of sending the signal to the satellite and the fee paid to the digital satellite operator, SkyDigital, for a place on the Electronic Programming Guide which acts as the "menu" for all the channels on digital satellite;

    —  digital terrestrial television is more problematic. Because television signals on earth have to compete with the many other uses of radio spectrum—radio, mobile communications, emergency and military use and so forth—only a relatively small and finite amount of spectrum has been set aside for digital terrestrial television—perhaps enough for about 40 channels at present. Most of that space is already spoke for. The BBC's own allocation is fully taken up with the broadcasting of BBC One, BBC Two, BBC Choice, BBC News 24 and the BBC Parliament audio feed. We have had to negotiate with a commercial operator for additional space for BBC Knowledge, the new public service channel launched last month. What little space remains available on digital terrestrial television is in the hands of the main commercial operator, ONDigital. Any new channel would have to compete on market terms for that space alongside high value, perhaps pay-per-view premium channels. The cost could be in the order of £2-3 million a year;

    —  securing a place on digital cable will not be so difficult, as total capacity will be much larger. However, cable is unpredictable, since the channel provider has to contract with the cable companies to carry its channel on the cable networks which are owned and operated by the cable companies, and then to make the channel available to cable subscribers on favourable terms. The incremental cost to the cable companies of including an extra channel is relatively low, and in most cases the cable companies pass on a share of subscription revenue to the channel provider, reflecting the value of the channel to its overall offering to its customers. However, the position with channels which have a fairly limited audience is different, and the cable companies seek to gain the greatest possible commercial return from carrying them. The incremental cost of putting a channel on digital cable should be limited to the cost of getting the signal to the cable "head-end", from where it is distributed throughout the cable system—a cost in the order of several tens of thousands of pounds.

  18.  In addition to the high distribution costs of digital television, producing video pictures of the quality required for television broadcast would entail equipping each Committee Room with industry-standard cameras and backing this up with full studio support. A rough estimate of the cost of doing so is about £0.5 million for every channel—that is, if three Select Committees were to be covered at one time, the studio costs would be £1.5 million per year.

  19.  In summary, achieving universal access to Select Committee proceedings via a dedicated digital television channel would be a complicated business and potentially a very costly one—say in the region of £5 million a year in total—for which there is no obvious commercial model.

ONLINE

  20.  The third means of providing coverage which has the potential of coming close to a universal service is online—the Internet. Currently, around 20 per cent of homes have access to the Internet, about 20 per cent of primary schools and 80 per cent of secondary schools, and the Internet is becoming a standard piece of office equipment. Over time, more Internet services are likely to become accessible via cable or satellite television, opening up access to non-computer households.

  21.  The Internet is now able to carry more than text and pictures. Video pictures and audio streams can be downloaded, from recorded or "live" sources. The quality of these streams is currently quite poor. It is constrained by the speed at which information can be transmitted along the telephone networks to which most consumer computer equipment is linked. The current typical rate of 56 kilobits of information every second is sufficient only to provide a poor quality, jerky picture of about two inches by one, or an even poorer picture if a larger screen size is selected.

  22.  However, over the next two to three years, download rates are likely to increase to at least 300 kilobits per second, which will enable a big improvement in picture quality to something approaching that of a television video tape—the type of quality we demonstrated at the beginning of this hearing[3]. The first to benefit from such an enhancement will be specialists who most need such a tool—for example, journalists. Further down the track, the technology will become standard in schools and offices. The home market will be relatively slow to upgrade—it is estimated that 20 per cent of households will have a broadband Internet connection in seven years time, principally supported by:

    —  digital cable television, due to launch later this year, which is expected to offer fast and unrestricted Internet connection with near broadcast quality video pictures;

    —  DSL technology, built upon BT's existing copper wire telephone network, which is currently under trial and is expected to start rolling out at the turn of the year and which will provide a similar level of functionality as broadband cable.

  An alternative to a fast Internet connection for the home is the ability to download information from the Internet slowly—say overnight—and store it for viewing later. The next generation of digital television set top boxes in this country is expected to contain the hard disk storage capacity necessary to allow this.

  23.  Another consideration is cost. Generally, the service provider has to pay for a certain amount of bandwidth, which determines how many users can access the information at any one time. Three factors could reduce bandwidth costs:

    —  as the networks which make up the Internet are upgraded and extended, bandwidth will be less at a premium. On the other hand, just as with the road improvements, there can also be expected to be an increase of traffic as well as in the sophistication of material which people put on the Internet, so the overall impact on competition and cost is difficult to assess;

    —  increasingly, the more popular websites will be downloaded to a large number of local or regional storage (or "server") sites, from which people can access them more quickly and cheaply than by going to one central site. This will make the provision of video pictures on the Internet more cost effective;

    —  Internet Service Providers (ISPs) are keen to take ready-made content and package it within their consumer offering. In a competitive market, and as Internet content increases rapidly, many ISPs are becoming specialist, targeted at particular groups of users with common interests. It is certainly possible to conceive of a relevant ISP being willing to take video coverage of Select Committees and distribute it on a ready-made website at little cost to Parliament other than the cost of getting the signal to the ISP—say a few tens of thousands of pounds.

  24.  Whatever the business model, distribution by Internet (whether received on a personal computer or via interactive digital television) would clearly be significantly cheaper than by broadcasting on digital television, and for this cost Parliament would be buying distribution around the whole world, not just in the UK.

  25.  In another respect, online distribution would entail much lower costs than digital television. Because the quality of video image required is much lower than a television picture, the standard of camera and studio equipment required to produce the image is also much lower. At its simplest, each Committee Room could be equipped with a single, fixed image camera of about the same standard as a domestic camcorder—a matter of a few thousand pounds. This would provide a very basic picture—certainly not anything close to broadcast quality—but one that would be quite sufficient for online delivery.

  26.  For the user, online delivery has one very significant advantage over broadcasting with regard to news coverage: it is a truly "on-demand" environment, in which users can select the information they want to access at the time that they want it. Large archives of recorded video and audio material can be stored to be instantly recalled by individual users. Whole Select Committee hearings could be stored and searched in this way. The technology exists to index the video pictures to the text of the words spoken and the name of the speaker, so that in the same way as one would search a text document on computer and generate a list of references to a particular word or a particular person, so one could search Select Committee proceedings—generating a menu of video clips from which one can find the relevant exchanges. Much of the leading expertise in this field is in the UK.

  27.  The more comprehensive the service, the more expensive. But it is certainly possible to see a commercial model for such an archive where it might not exist for a general "broadcast" stream of coverage. Journalists, researchers, lobbyists and others would be likely to find such an archive very useful in compiling reports, and may be willing to pay a high price for a premium service. Internet Service Providers consequently might see it as an attractive service to offer on their sites.

  28.  Parliament could put out to tender a contract to provide a packaged website, including for example online Hansard, live Committee coverage and either a full archive or edited video clips, with a fully functional index and search facility, and to explore partnerships with Internet Service Providers to distribute the site internationally.

CONCLUSIONS

  29.  Universal and comprehensive distribution of Select Committee hearings via digital television would be very expensive and there is no obvious commercial model to support it.

  30.  Online distribution would on the other hand provide:

    —  low production costs;

    —  high functionality—providing the material in an easily accessible and usable format;

    —  cheaper distribution costs;

    —  an effective and immediate route into the office and schools market;

    —  international distribution.

  The initial downsides of the online route would be:

    —  relatively low quality pictures;

    —  not a short-term universal route into the homes market.

  31.  A comprehensive online service of this kind could continue to be backed up by coverage of the highlights of Select Committee hearings on the BBC's public service television and radio services, including BBC Parliament.

June 1999


3   Q. 114. Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2000
Prepared 5 July 2000