Memorandum submitted by Carlton Communications
Carlton Communications Plc is one of the UK's
leading commercial broadcasters. We hold regional ITV licences
for London, the Midlands, the West of England and Wales and own
50 per cent of ONdigitalthe world's leading commercial
digital terrestrial television (DTT) operator.
Carlton welcomes the key objectives set out
in the White Paper:
". . . to make sure that the
UK is home to the most dynamic and competitive communications
market in the world";
". . . to develop a clear and
effective strategy for completing the switchover to digital broadcasting";
". . . to achieve universal
Internet access by 2005".
The UK has a number of key advantages in the
information age: a competitive telecomms industry; the most advanced
digital television market in Europe; an established production
base; and English, the international language of television and
other media. The prospects for economic growth, for job creation
and for education are significant.
2. DIGITAL SWITCHOVER
The UK was the first country to launch DTT.
We have the fastest growing pay digital television market in Europe.
Consumers can now choose between three platformsterrestrial,
cable and satellite. There are seven million digital pay television
subscribers in the UK.
The Government can build on that success by
pushing ahead with the switchover from analogue to digital. Switchover
will also generate considerable revenue for the Exchequer by releasing
extra spectrum, which can be sold on to other users.
We believe that the Government should set a
date for analogue switchover. This would encourage television
manufacturers to promote digital equipment. The White Paper simply
states that it is "expected between 2006-10".
This should be accompanied by the introduction
of: a kite marking scheme for digital television sets; and a Government
led campaign to inform the public about the switchover from analogue
One of the biggest obstacles to achieving full
Internet access by 2005 is the cost of personal computers. However,
Internet access through the television is now a realityenabling
some of the most disadvantaged in society to gain access to the
ONdigital now offers full Internet access from
a set-top box via the television for £5 a month. Enhanced
DTT coverage would boost Internet penetration rates amongst the
most disadvantaged in society who cannot afford the cost of a
The Government should set targets for improvements
in DTT coverage. DTT is the key to unlocking the digital, interactive
age, with universal Internet access. Improvements to its coverageand
additional capacitywould help to boost Internet take-up.
We agree that the core public service broadcasting
(PSB) channels (BBC1, 2, ITV and Channel 4) should be available
on all delivery platformsterrestrial, cable and satellite.
The White Paper hints that this could be achieved by requiring
PSBs to offer their services ("must offer") and platform
operators to carry them ("must carry").
However, the White Paper does not explicitly
state that "must carry" will be extended to satellite
(it currently only applies to cable). We understand that this
may require a change to EU law, but believe that "must carry"
across all platforms is an essential quid pro quo for imposing
"must offer" on PSBs. Without it, the ability of PSBs
to negotiate carriage on satellite at fair and reasonable terms
will be severely undermined.
In the meantime, the Government should encourage
OFTEL to amend the guidelines governing charges for satellite
services. They currently prevent Sky from taking into account
the public service nature of a channel when setting prices for
access to the satellite.
We believe that access to satellite for the
PSB channels should be charged at cost. PSBs, like ITV, only require
access to Sky's encryption facilities to prevent programmes being
seen by viewers in other countries where the rights have not been
cleared. Pay television operators need them to generate revenue.
The BBC is currently paying millions of pounds
every year to Sky for carriage of BBC1 and 2despite the
obvious benefits that Sky receives from having the BBC on its
platform. The cable operators make no charge for the carriage
of these channels on their systems.
5. MEDIA OWNERSHIP
We welcome the Government's decision to abolish
the 15 per cent audience share limit and the "London ITV
split", which prevent future consolidation within ITV. We
believe that competition lawrather than specific ownership
restrictionsshould increasingly be used to control market
power and prevent abuse of dominance in media markets.
We believe that the Government should repeal
the restriction preventing any one company from owning more than
20 per cent of ITN. In almost every other country in the world,
the main commercial channels own their own news supplier. ITN's
impartiality and independence are fully protected via the licensing
6. THE INDEPENDENT
As the White Paper makes clear "the independent
production sector is thriving". We accept the need for ongoing
independent production quotas in the medium term, although we
believe that they will eventually become redundant.
In the meantime, the restrictions (at both an
EU and UK level) preventing broadcasters owning more than 25 per
cent of an "independent" should be lifted to 49 per
cent. Broadcasters are the principal sponsors of the UK production
base, but the current legislation restricts their investment in
independentsdenying that sector a source of capital.
7. CONTENT REGULATION
We support the White Paper's proposals to sustain
PSB and welcome the principle behind the new three-tier system
for regulating content. We have always argued that there should
be a gradation of public service responsibilities, based on each
broadcaster's ownership structures and funding.
However, we need to see more detail before we
can be sure that the proposed structure will rationalise content
regulation in practice.
We believe that OFCOM should be responsible
for regulating content on all the PSB channels. Because the White
Paper does not bring the BBC fully within OFCOM's remit, it risks
undermining the regulator's ability to look at public service
broadcasting across the board.