IV. UNIVERSAL PROVISION IN THE DIGITAL
55. A common element of the two main converging sectors,
broadcasting and communications, is a tradition of certain services
being provided universally. The White Paper seeks to ensure that
the principle of universal access to certain television services
is maintained in the digital era, that telephone services are
available to everybody at an affordable price and that there is
universal access to the Internet by 2005. The White Paper also
states that the Government will "keep under review the case
for requiring higher bandwidth services to be made available universally".
The long-term success of the policies set out in the White Paper
is likely to be judged in considerable measure by progress in
relation to these ambitions.
56. In the context of television services, the digital
era will truly have arrived when "analogue switch-off"the
end of analogue terrestrial transmission of free-to-air television
servicestakes place. The Government has already made a
commitment that this will not happen until digital television
services in some form are available to everyone and are affordable.
Mr Smith has indicated that the meeting of his key tests of affordability
and availability "could start to happen as early as 2006
and could be completed by 2010". We have welcomed this policy
in a previous Report.
Analogue switch-off will free spectrum capacity that may bring
significant revenue to the Government, may promote greater economic
activity and may facilitate the delivery of a broader range of
public services over the airwaves.
In these circumstances, some witnesses were surprised how little
new was said about promoting digital take-up and preparing the
way for analogue switch-off in the Communications White Paper.
The Government has already responded to such criticism by announcing
initiatives to promote digital television in the Competitiveness
White Paper published on 13 February 2001.
57. The success of commercial digital television
in this country in the period since launch has been striking.
BSkyB's digital satellite service has signed up 5.25 million users,
although some systems remain to be installed. BSkyB expects to
have reached 5.4 million homes by the middle of 2001, representing
over 20 per cent of households in the United Kingdom.
Some of these are new users, but BSkyB has also largely succeeded
in converting its pre-existing analogue subscribers to digital
and expects to switch off its own analogue signal later this year.
ONdigital has built a new subscriber base from scratch and now
has over 1 million subscribers to its digital terrestrial television
Digital cable television has about a million customers, but there
is scope for early expansion of that number through the continued
conversion of analogue cable services to digital.
58. Mr Stephen Carter, Managing Director of ntl,
thought that future take-up would be driven more by services,
broadband access and interactivity than the availability of more
channels: "multi-channel television ... will be a secondary
attraction, or possibly a contingent attraction, but not the primary
ONdigital and BSkyB took a different view, believing that greater
channel choice would remain the main driver of digital television.
Both ONdigital and BSkyB did accept the attraction of Internet-based
services to certain types of potential new customers.
59. While there remains significant potential for
continued growth of commercial digital television, there are important
barriers to universal digital provision. The reach of the digital
terrestrial signal, which it was known would not cover the entire
United Kingdom, has been even lower than forecast. Digital terrestrial
television is available across little more than half the United
In some places, such as the Grampian region, digital terrestrial
transmission is unlikely ever to be economic.
Mr Smith acknowledged both the need to improve the reach of the
digital terrestrial signal and to find other forms of provision
for areas beyond its reach.
Additionally, even where the signal is available, aerial systems
are sometimes a barrier to take-up.
60. While the array of competing digital television
services available has helped to drive take-up, that variety may
have also contributed to uncertainty amongst the public. According
to Ms Anna Bradley, Director of the National Consumer Council,
"consumers are very confused about what to do and voting
with their feet, as consumers do when they are confused".
Mr Nigel Walmsley of Carlton Communications plc thought there
was "a great deal of misunderstanding, or total absence of
understanding, about exactly what is available in terms of both
content and, of equal importance, access and the technical functionality
of the different devices".
61. ONdigital was particularly concerned at the confusion
about digital television among those buying new television sets.
The company noted that the vast majority of the four million television
sets sold every year are still analogue rather than integrated
digital television sets, thus making the task of achieving switch-off
larger rather than smaller.
The continued popularity of analogue television sets results in
part from the continued price differential between analogue and
digital receivers, but there is also concern that those actively
seeking state-of-the-art television sets are not being given clear
guidance about digital reception.
Drawing in part upon her own recent experience in trying to buy
a digital television set, Ms Hewitt concluded that current labelling
of such sets was "not adequate".
The Government is now committed to developing a clear labelling
scheme, in consultation with the industry, to ensure awareness
about services and equipment.
This task is urgent. We recommend that the Government aim to
establish a scheme for "kite-marking" integrated digital
television sets no later than October 2001 and report on progress
on consultation with the industry about achieving that aim in
its response to this Report. This scheme should ensure that potential
purchasers of non-digital television sets are warned about the
limited life expectancy of their television sets without the purchase
of additional equipment in view of the advent of analogue switch-off
in the near future.
62. ONdigital argued that the Government should go
further, and mandate the inclusion of digital receivers in new
television sets over a given period agreed with manufacturers
Mr Stuart Prebble, Chief Executive of ONdigital, thought that
such a development would be analogous to the introduction of the
catalytic converter in cars.
Ms Hewitt explained that a national requirement for an integrated
digital receiver would not be possible under current European
law, but said that she was exploring whether changes might be
made to European legislation on the matter.
63. Another symptom of the confusion that surrounds
digital television relates to free-to-air services. There remains
a widespread assumption that pay-television and digital television
The free-to-air digital services provided by the BBC and ITV have
simply not been of the quality or prominence to make people who
are unwilling or unable to pay a subscription switch to digital
television in large numbers.
This helps to explain the limited demand both for integrated digital
television sets that can provide such free-to-air services without
any further cost and for installation of digital satellite reception
equipment without a BSkyB subscription.
64. There is a pressing need for a proper public
information campaign about digital television led by the Government.
As Mr Smith noted, broadcasters are well-placed to explain the
advantages of digital television to the viewer.
We were told that ITV was "ready, willing and able"
to contribute to a campaign, provided problems about promotion
of ONdigital could be overcome.
The Government is seeking a "consensus approach" on
this matter across the industry.
Mr Smith stated that the Government was considering "a very
simple leaflet" to be available at the point of sale.
We are not convinced this goes far enough. We recommend that,
by October 2001, the Government agree with the television industry
the text of a leaflet on digital television to be distributed
to every home in the United Kingdom. We further recommend that
this be backed up by a public information campaign on all free-to-air
television channels, ideally with the same content on each channel.
65. The growth of digital television is reliant and
will remain reliant upon subsidy of set-top boxes. Both ONdigital
and BSkyB provide free boxes to new customers, in the former case
in return for subscription and in the latter case with a higher
installation fee if no subscription is involved.
This involves the service provider bearing a significant initial
loss due to the considerable cost of the set-top box, in most
cases off-set over time by income from subscription.
Mr Prebble considered that this commercial model of subsidy would
go a long way towards providing digital television across the
66. However, the commercial sector alone is unlikely
to provide the complete solution for analogue switch-off. One
reason for this is that the principal aim of commercial providers
is to gain more subscribing households and digital capacity is
sometimes confined at the moment to only one television set in
each home, but analogue switch-off will render all television
sets without digital capability useless. Almost two-thirds of
British households have more than one television set and many
When we put this problem to Mr Prebble, his suggested solution
was to move the set-top box from set to set, a suggestion that
implies a certain lack of realism given the current size and weight
of a set-top box.
There will doubtless be a growing trend towards networking within
the home between sets as a partial solution to the problem, but
we are some way away from households being able to watch one digital
channel in one room, to view another digital channel elsewhere
and to video a third.
It is also far from clear whether the public is ready to pay more
to commercial providers for the necessary additional functionality.
67. The Government has announced plans to launch
small-scale pilot projects offering free conversion to digital
television, designed to include access to free-to-air digital
channels and to interactive services, including the Internet.
Mr Dyke told us that the BBC had already undertaken work on whether
the BBC might give away free set-top boxes and said that "without
an initiative at some stage it is very hard to see how one gets
Ms Patricia Hodgson, the Chief Executive of the ITC, thought it
"inevitable" at some stage that free non-commercial
provision would be necessary, but also considered that an early
give-away would destroy the commercial businesses currently driving
The negative effects of early public provision on the pay-television
market were also a concern for ntl and ONdigital.
BSkyB suggested that a "voucher system" might provide
an incentive to take-up that would leave the consumer free to
choose a provider.
68. Mr Smith was cautious about public provision
for digital television access. He suggested that the cost of a
box at present was between £200 and £300, although he
accepted that this price was likely to fall. He was concerned
that, if public provision seemed likely, potential digital consumers
would hold back until a free box became available. Partly for
this reason, he did "not want to speculate at this stage".
While the Government will not wish to take precipitate action
that might threaten the development of the commercial market in
digital television, it is important for the Government to keep
an open mind on all options that might assist in facilitating
early analogue switch-off, particularly those options that would
have the added advantage of advancing other Government objectives
relating to universal access to the Internet and to the wider
development of broadband.
Television, the Internet and broadband
69. Nearly three years ago, in our Report on The
Multi-Media Revolution, we argued "that the issue of
analogue switch-off should be taken forward not in isolation but
in the wider context of the future of universal access".
This was because we perceived the future development of television
and of the Internet as fundamentally intertwined and because we
considered then that broadband networks, principally discussed
in the context of telecommunications and business development,
actually had a fundamental role to play in the future of what
is now broadcasting. We recommended that the Government "establish
as a strategic objective for the first decade of the new millennium
the development of a universal broadband infrastructure (including
an adequate return path capacity) available to every home in the
United Kingdom" and argued that "the same date should
be set for both meeting the strategic objective and analogue switch-off".
70. The starting point for convergence of the kind
we envisaged is universal access to the Internet, initially in
most cases through a narrowband connection. The Prime Minister
has set a target for universal access to the Internet by 2005
that is reaffirmed in the White Paper.
The National Consumer Council pointed out that there is a lack
of clarity in the White Paper about what such universal access
The White Paper refers to the fact that "access will be either
through devices at home, work or on the move or through access
in a nearby community centre".
Access through community centres such as public libraries and
schools is of great importance, as we have noted before.
Access at work is vital for the competitiveness of business. Access
through mobile phones has many uses. However, as we have suggested
before, "availability of the Internet in every home"
is the key if the Internet's power to transform the way we live
our lives is to be truly realised.
71. Two economic barriers remain if universal access
in the home is to be possiblethe cost of telephony and
the cost of receiving devices. In 1998 we suggested that universal
availability of the Internet at home might evolve "initially
on the basis of a flat-rate charge for a narrowband service for
a limited period of time each week".
We made this proposal partly on the basis of experience in the
United States of America, where flat-rate charges for local telephone
calls have been a major engine of the rapid growth of the Internet.
Unmetered access to the Internet in this country is growing: use
of unmetered packages grew from one quarter of homes on the Internet
to one third between August and November 2000.
BT Openworld told us that it had more customers with unmetered
access than any other provider and offered a range of charges
for access during certain time periods, but believed that metered
access would remain a cheaper proposition for those who only wanted
to make limited use of the Internet.
Since then Oftel has required BT to offer other operators a new
wholesale unmetered Internet access product.
The new regulator must see it as a priority to ensure that
the market delivers a range of competitive packages for unmetered
access as an essential component if the Government's objective
of universal access to the Internet by 2005 is to be realised.
72. The absence of a personal computer remains a
crucial barrier for the many people who cannot afford or do not
wish to buy one. The Government has established a scheme to offer
100,000 computers to low income families at low rent.
The computer will remain the preferred device for many work and
study-oriented aspects of Internet usage, but television offers
many advantages for Internet access, the most fundamental of which
is the near universal availability of television sets.
As the White Paper notes, "the television can become the
information and entertainment centre of the home with two-way
ONdigital considered that "digital television offers the
best opportunity for the Government to achieve its goal of creating
an online digital nation by 2005".
Mr Prebble believed that Internet access via the television set
could "make a very serious contribution towards universal
Internet access much faster than is currently envisaged".
Both Mr Smith and Ms Hewitt commented upon the popularity of access
to the Internet through digital television.
BSkyB pointed out that e-mail and e-commerce services were likely
to have a different demographic profile to multi-channel television.
Access to the Internet can be an important driver of the take-up
of digital television, and the expansion of digital television
services can be fundamental to achievement of the Government's
objective of universal Internet access by 2005. We are concerned
that these links are not readily apparent in the two separate
Government policies at present. We recommend that the promotion
of Internet access through digital television become a more prominent
element in Government policy for the Internet and that the promotion
of digital television by the Government and the industry lay greater
stress than is currently evident on digital television as an easy
and affordable gateway to the Internet.
73. For the vast majority of users, particularly
in the home, current Internet access is over a telephone line
using a modem that provides what is termed "narrowband"
access. Bandwidth in digital systems is measured in binary digits
(bits) per second. A narrowband connection offers a speed of 28.8
or 56 kilobits per second (kbit/s). Such a connection also usually
involves a separate dial-up to the Internet. With narrowband access
to the Internet, it is estimated that one third of user time online
is spent waiting.
Services are becoming available at much greater speeds. These
facilitate more uses of the network and also provide continuous
access to the Internet. In analysing these higher speed services,
the Government differentiates between the following: higher
bandwidth, defined as services provided at speeds greater
than 384 kbit/s; current generation broadband, defined
as services provided at speeds of 2 Mbit/s and over; and next
generation broadband, defined as services provided at speeds
of 10 Mbit/s and over.
The Government seems confused in its own mind about whether all
of these services constitute broadband. The White Paper states
that "broadband is generally defined as bandwidth of greater
than 2 Mbit/s".
However, Ms Hewitt told us that this was only "one of the
definitions we use", and subsequently stated that her preferred
definition would be to include all services provided at speeds
greater than 384 kbit/s within the meaning of broadband and higher
For convenience, we examine all services above 384 kbit/s in this
section on broadband, not least because, if the White Paper's
definition is employed, there are almost no services currently
available in the United Kingdom to consider.
74. However defined, broadband networks are "hugely
important", as Ms Hewitt observed, for reasons well-expressed
by ntl: "Broadband access is more than just a passive enabler
of content services; it is a fundamental building block of the
United Kingdom's national infrastructure and key contributor to
our international competitiveness".
The Government has understandably placed stress on the importance
of business use of broadband services.
Broadband is also fundamental to the quality of Internet access
and related use by public services such as schools, public libraries
and the National Health Service.
Nevertheless, it is vital not to lose sight of the importance
of broadband services for the consumer in the home. There will
be many domestic uses for broadband access, including distance-learning,
online games, news and streamed video. Industry forecasts indicate
that a quarter of households or more might have higher bandwidth
or broadband connections by 2005.
75. Although BT's thinking about broadband was principally
concerned with business use, they did tell us that 60 per cent
of current customers for higher bandwidth services provided through
the local loop were consumers in the home.
This is almost wholly due to the ground-breaking use of local
telephone lines for delivering video-on-demand and interactive
television services by Video Networks Limited, which has launched
a service under the brand name "HomeChoice".
Mr Simon Hochhauser told us that he expected HomeChoice to be
able to provide a full broadcast service, in addition to current
on-demand and time-shifted services, by this means "within
the year", but also referred to problems faced by a new service
in gaining access to content from traditional providers.
76. Other video content for delivery over broadband
networks is also being developed. For example, a web site called
Online Classics has been launched in this country, using the latest
technology for audio-visual streaming, which streams live performances
from some of the most famous performing arts centres in the world
and provides access to an archive of over 150 hours of video-on-demand
of opera, theatre, concerts, dance and musicals that are available
to watch entirely at the user's convenience.
77. The Government has acknowledged that "content
is a key driver of the take-up of digital technologies",
but gives only very limited recognition to the crucial role of
consumer products in enhancing demand for broadband.
AOL UK expected broadband services to lead to a "step change
in how consumers want to access content and the type of content
they want to access", but thought that the development of
content to drive demand was at a very early stage.
This is not surprising. Content such as that provided by HomeChoice
or Online Classics is only readily accessible to those with broadband
connections. Both Mr Hochhauser and AOL UK had no doubt that content
development was held back at the moment by a fundamental problemthe
inadequacy of access to broadband networks.
78. In the race to develop widespread and competitive
broadband networks, the United Kingdom has barely left the starting
blocks while others are some way down the track. In Sweden, there
is higher bandwidth penetration in 2 per cent of all households,
whereas the main such technology in this country is not yet available
in 20,000 homes.
In the Netherlands, almost 20 per cent of homes with Internet
access have a high speed cable modem.
By the Government's own assessment, roll-out of broadband services
in the United States "is arguably about one year to 18 months
ahead of the United Kingdom".
In a valuable submission on the problems of broadband development,
Mr Tom Steinberg warned that, "without action, the White
Paper could create the world's first truly converged regulator,
only to find the United Kingdom trailing irrecoverably behind
the rest of the world in terms of actual convergence".
79. Ms Hewitt rejected "the very pessimistic
views ... that we are hopelessly lagging behind".
The Government has established a goal for the United Kingdom "to
have the most extensive and competitive broadband market in the
G7 by 2005".
Ms Hewitt characterised this target as "a stretching one",
but said that "I am quite confident that we can reach it".
She considered that there were signs of "the beginning of
a very competitive marketplace" in broadband services, a
development seen by the Government as the key to achieving its
80. The most widespread higher bandwidth technology
currently available in this country is Asymmetric Digital Subscriber
Loop or Line (ADSL), which provides much greater compression through
the existing copper wire to the home, relying on new equipment
in the exchange and a modem at the customer end.
ADSL is currently offering Internet access speeds of up to 500
kbit/s, although there is potential for higher speeds through
this type of technology.
The Government has recently made the rather optimistic statement
that ADSL "is being rolled out rapidly across the United
We received a somewhat different impression from BT's oral evidence.
BT told us that "the roll-out of ADSL ... has caused significant
problems all around the world".
ADSL had proved "a difficult technology" to provide
"over all the old systems that are needed to run a telephone
There are currently only around 25,000 ADSL subscribers.
BT did not hold out hopes for expansion at a breathtaking rate.
Conversion of an exchange to ADSL capability requires a large
investment, and BT did not expect to secure a return on that investment
in an exchange with less than 2,000 ADSL subscribers in the next
five years. Based on BT's forecast of ten per cent take-up, BT
considered that investment in ADSL would not be economic for exchanges
with fewer than 20,000 lines.
BT expected this economic rationale to translate into ADSL capability
across 50 per cent of the country by March 2001 and 70 per cent
81. The difficulties with the roll-out of ADSL are
intertwined with the progress, or lack of it, of "local loop
unbundling"the opening up of the local loop network
to other service providers by sale or lease.
The Trade and Industry Committee has examined the regulatory and
industry failures over local loop unbundling in a recent inquiry.
The process of unbundling BT's network was only begun recently,
a delay attributed by Ms Hewitt to previous concentration on competition
between the BT network and cable networks.
BT seemed pleased with the progress made with local loop unbundling.
Other evidence suggested that the process had not been conducive
to the development of broadband networks. Mr Hochhauser thought
that the method of unbundling had been "a little bit messy"
and that the lessons from other countries had not been learned.
He pinpointed the difficulties of information exchange and cooperation
with BT, a problem also noted by the Government and partially
acknowledged by BT.
It has been questioned whether the internal structure of BT is
such as to maximise its incentives to support unbundling.
The Government has promised "vigorous action to complete
the unbundling of BT's local loop".
Ms Hewitt thought that Oftel was "driving through" the
process "with a set of very tough decisions" and contended
that BT had been given "the right set of incentives".
82. ADSL has limitations as a broadband technology.
First, ADSL is expensive. BT Openworld currently charges customers
£150 for installation plus a monthly fee of £40.
This compares with monthly charges of £37 in France, £31
in Germany and £32 in the United States.
Mr Hochhauser told us that Video Networks Limited was paying BT
£625 to connect an ADSL line and £60 a month in running
costs, almost all of these costs being borne by the company and
not passed on to the customer.
Second, ADSL technology through the current copper loop has a
fundamental geographical limitation. ADSL will only work over
a distance of up to about 3 kilometres from the local exchange.
Even if every BT exchange were upgraded to supply ADSL services,
only about 85 per cent of the population would be able to receive
According to BT "particularly in rural areas, it is not the
technology which is going to bring the broadband".
83. Other technologies are developing that can also
provide higher bandwidth services to the home. Cable networks,
which now pass more than half of United Kingdom households, are
well-suited to broadband provision, although, as ntl put it, "the
benefits of the cable platform are yet to be fully realised".
In March 1998 we witnessed the importance of cable modems in the
United States as a means of providing high-speed Internet delivery
to the home.
Three years on, cable modems are only just beginning to be rolled
out in this country; ntl has 4,750 cable modem subscribers.
As Ms Hewitt observed, the weak performance of the cable industry
in this regard has passed almost un-remarked compared with the
criticism directed at the performance of BT over ADSL.
84. Satellite is well-established as a means of providing
one-way high bandwidth capacity for television, but also has potential
for two-way higher bandwidth capacity. At present, two-way capability
is expensive, although Ms Hewitt expected prices to fall.
Hybrid solutions incorporating the use of other technologies for
a return path are also developing.
The near-universal coverage of satellite across the United Kingdom
means that satellite has great potential as a high bandwidth network
for rural areas.
Astra Marketing Limited has drawn attention to the potential of
Astra's broadband interactive services, provided that problems
posed by licensing restrictions can be resolved.
85. Fixed wireless networks have potential for broadband
transmission and overcome some of the problems associated with
the access infrastructure. Radio does, however, have problems
of reach even in the regions that it is intended to cover. Some
operators of these new radio networks have been licensed and the
auction process is continuing.
The Government is seeking to make more radio spectrum available
for such services.
Third generation mobile telephony services, which are due to be
launched next year, have potential as a means of providing high-speed
Internet access and broadcast material.
86. In analysing the options which then appeared
to be available for broadband networks in 1998, we noted the importance
of competition and "the need not to be wedded or glued to
one particular delivery system in a rapidly changing market".
The emergence of new possibilities since 1998 and the disappointing
pace of development of others have reinforced the importance of
The precise types of broadband services that will be needed in
the future are not yet clear.
According to ntl, "as technologies develop ... the market
is actually better positioned than the Government to decide either
which single technology or which multiple technologies are going
to get you fastest towards the goal that you are aiming at".
There is almost certainly some truth in that, but it still does
imply some clarity of thinking about goals, which for the Government
must be social as well as economic.
87. Current universal service provision of both
television and telephony service provides a vital unifying factor
in British society and in the British economy. It is of paramount
importance that this unifying force is maintained in the digital
era. The White Paper shows some signs of recognising this,
stating: "All our citizens should have access to the advantages
and opportunities provided by the next generation of communications
The White Paper also indicates that the Government "will
keep under review the case for requiring the communications industry
to make higher bandwidth services available universally".
The Government maintains that it is too early in broadband roll-out
to make final decisions, but notes that "the case for a universal
obligation to ensure everyone has access to more rapid digital
services may, however, become more compelling as the roll-out
of these services accelerates and as more of the services necessary
for full participation in modern society, particularly public
services, are delivered electronically".
88. All of the broadband services that are expected
to be marketed to the consumer in the near future are incomplete
in their geographical availability. Fifteen to twenty per cent
of the population are expected to be left unserved by higher bandwidth
and broadband services by 2003.
To a considerable extent, this will represent the urban/rural
divide that concerned us in 1998.
We have already referred to the geographical limitations on ADSL
technology and BT's reluctance to invest in such technology in
exchanges serving smaller communities. Equally, there is a strong
urban bias to existing cable networks.
Given these limitations, Mr Donald Emslie, Chief Executive of
SMG Television, told us of his concerns that, "from a commercial
perspective, Scotland is seen as almost a second-class digital
Scotland would not be alone. The Government forecasts that 45
per cent of the population in the South West and Wales might be
unserved by higher bandwidth networks by 2003.
Satellite broadband has an important role to play in rural areas,
but is not foreseen by the Government as a major consumer product
in the near future.
89. Ms Hewitt assured us that one of the aims of
the Government's strategy was "to drive the market into the
rural areas in particular where otherwise people would be left
without the broadband networks".
She told us that the Government was seeking to pull together demand
for broadband services from the public sectorincluding
schools, universities, hospitals, police stations, GP surgeries
and public librariesto provide better value for money,
but also to establish a clear demand in rural areas.
We would be more impressed with the innovativeness of this concept
had we not ourselves raised the very same idea with Ministers
nearly three years ago and returned to the issue last year.
The Government is also establishing a challenge fund to provide
£30 million over three years to support Regional Development
Agencies and devolved administrations in taking forward schemes
to enhance the reach of broadband networks.
Improving the reach of broadband services will be of some importance,
particularly for the rural economy, but the social issue of universal
access is not only a matter of geography. As Mr Cruickshank observed
when asked about broadband and digital access for remote areas
of Scotland, "when one examines where the disadvantaged are,
there will be many more people in the centre of Glasgow than there
will be in the Highlands and Islands".
90. The Government is right to think in terms
of a future universal obligation to provide high bandwidth digital
services. We accept that, given the early stage of development
of broadband in this country, it would be wrong for the Government
to put all its eggs in one technological basket or to set a firm
timetable for a new universal obligation when it is far from clear
what form such an obligation will eventually take. However, we
are deeply disappointed that the Government's broadband strategy
appears to be developing in virtual isolation from the public
and consumer needs and opportunities created by analogue switch-off.
The role of both digital television and of Internet-based broadcasting
as consumer services in driving broadband take-up is largely neglected
in that strategy. We believe this reflects a broader underestimation
by both Government and industry of consumer demand for broadband
services. Despite the protestations of close and effective working
between the Department of Trade and Industry and the Department
for Culture, Media and Sport,
the Government's business-oriented broadband strategy and its
consumer-oriented strategy for analogue switch-off do not intersect
as they must if the Government is to respond to and harness the
opportunities of the converged world. We expect the Government
to tackle these weaknesses as a matter of urgency.
91. Although there are fears that impetus in promoting
high bandwidth availability will be lost during the transition
from Oftel to OFCOM,
once the new regulator is established its responsibility for both
broadcasting and telecommunications should enable that regulator
to make a valuable contribution to a more coherent approach to
the issues of analogue switch-off and broadband provision. We
recommend that, in its response to this Report, the Government
set out the proposed role for the new regulator in taking forward
the Government's objectives for analogue switch-off and broadband
provision. We further recommend that a statutory duty be imposed
upon the new regulator to conduct and lay before Parliament an
annual audit of progress towards the Government's objectives for
analogue switch-off and for broadband.
92. Digital radio is less central to the convergence
revolution than digital television. The main advantages digital
radio offers relate to quality of reception and range and variety
of radio services.
Nevertheless, digital radio will have potential for text, graphics,
pictures and interactivity.
Digital radio take-up is much slower than that of digital television,
in part because radio is almost exclusively a free-to air medium
and in part because reception of digital radio requires the purchase
of new equipment rather than the conversion of existing radios.
Sales of digital radios are growing slowly, held back by the continuing
price differential between digital and analogue sets in the market
for what is traditionally a cheap product.
Car radio is likely to be an early growth area for digital radio.
The reach of services provided by the commercial sector and the
BBC is gradually increasing and both are committed to further
93. With over 100 million analogue radio sets in
the country requiring replacement, it is not surprising that the
Government does not "plan to set an early date" for
radio analogue switch-off.
The Radio Authority did not feel that it was "realistic to
expect any government to try and even assay a possible date".
Ms Jenny Abramsky, Director of BBC Radio, noted that the move
from medium wave to FM had taken about 25 years.
GWR Group plc and the Radio Authority wished to see the Government
establish criteria for radio analogue switch-off.
We recommend that, in its response to this Report, the Government
set out its assessment of the main factors to be borne in mind
in reaching a decision on radio analogue switch-off.
sect 3.1. Back
(1999-2000) 25-I, paras 12-13. Back
126; HC (1997-98) 520-I, para 123. Back
7; Evidence, pp 24, 55. Back
5052, paras 4.52-4.59. Back
100, 108, 109. Back
211, 362, 391. Back
251, 391. Back
(1997-98) 520-I, paras 14, 124; HC Deb, 7 February 2001, col 539W;
QQ 221, 226. Back
p 174; Q 563. Back
(1997-98) 520-I, para 14; Evidence, p 56. Back
p 56. Back
230-231, 642-643. Back
5052, para 4.57; QQ 614, 646. Back
p 56. Back
614, 638. Back
p 56; QQ 460, 639. Back
251, 495. See also HC (1999-2000) 25-I, para 52; HC (1999-2000)
719, paras 21-25. Back
341, 344. Back
pp 1, 56; QQ 6, 208-209. Back
646, 251. Back
5052, para 4.5.4; Q 646. Back
225, 341, 343. Back
121, 213, 216, 225, 227. Back
213. See also Q 102. Back
5010, para 1.1.8; Q 640. Back
399, 638. On the problem of "VCR functionality", see
HC (1997-98) 520-I, para 125. Back
5052, para 4.55. Back
494, 500. Back
121, 213. Back
616, 643. Back
(1997-98) 520-I, para 128. Back
para 137. Back
5010, pp 29-30. Back
p 1; Q 15. Back
5010, para 3.8.1. Back
(1997-98) 520-I, para 137; Sixth Report from the Culture, Media
and Sport Committee, Public Libraries, HC (1999-2000) 241,
paras 72-77. Back
(1997-98) 520-I, para 137. Back
212 Ibid. Back
213 www.oftel.gov.uk/research/2001/q3intr.htm. Back
215 www.oftel.gov.uk/releases/2001/pr14_01.htm. Back
5010, p 29. Back
p 118; Q 219. Back
5010, p 26. Back
p 55. Back
5010, p 103; UK Online: the broadband future: An action plan
to facilitate roll-out of higher bandwidth and broadband services,
February 2001 (available at www.e-envoy.gov.uk) (hereafter The
broadband future), p 10. Back
224 Ibid. Back
5010, p 104. Back
621, 627. Ms Hewitt's definition is that used in The broadband
future (p 10) rather than that used in the White Paper. Back
p 212. Back
626; Evidence, p 23. Back
5052, paras 4.42, 4.44; The broadband future, pp 11-12. Back
p 28. Back
pp 17-19. Back
24, 40. Back
pp 31-32; Q 149. Back
128-129, 145-147. Back
235 www.onlineclassics.com. Back
5052, para 4.49. Back
547, 545. Back
132, 545. Back
broadband future, p 22; QQ
broadband future, p 22. Back
241 Ibid. Back
p 212. Back
5052, para 4.42. Back
Cm 5052, para 4.43. Back
(1997-98) 520-I, para 53; The broadband future, pp 35-36. Back
p 17; Q 623. Back
broadband future, p 13. Back
34; Cm 5010, p 31. Back
p 106. Back
Report from the Trade and Industry Committee, Local Loop Unbundling,
HC (2000-01) 90. Back
Cm 5010, p 17; Q 23. Back
p 214. Back
5010, para 3.9.1. Back
626, 628. Back
broadband future, p 23. Back
broadband future, p 35; Q
broadband future, p
broadband future, p 36; Q
(1997-98) 520-I, para 48. Back
broadband future, pp
13, 36. Back
broadband future, pp 15,
37; Q 623. Back
broadband future, pp 15,
5010, p 31; Q 33. Back
pp 237-238. Back
broadband future, pp 37,
26; Q 623. Back
5052, para 4.45; The broadband future, p 37. Back
5010, p 31; The broadband future, p 37. Back
(1997-98) 520-I, para 136. Back
33, 637. Back
97, 589. Back
5010, para 3.9.1. Back
para 3.9.2. Back
287 Ibid. Back
broadband future, p 13; Q
(1997-98) 520-I, para 136. Back
para 49. Back
broadband future, p 13. Back
broadband future, pp 37-38. Back
636; Cm 5052, para 4.48; The broadband future, pp 27-29. Back
(1997-98) 520-I, para 135; HC (1999-2000) 241, para 77. Back
636; Cm 5052, paras 4.42, 4.44. Back
pp 33, 220, 222. Back
(1997-98) 520-I, paras 61-63; Evidence, p 68; QQ 258-261, 265. Back
p 68; Q 258. Back
318, 446. Back
272-273, 446; Evidence, p 139. Back
318; Cm 5010, para 5.11.3. Back
p 68; Q 317. Back