House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport First Report

3 TECHNOLOGICAL DEVELOPMENT

29. If there is a distinction between engineering and technology, it is probably that the former is about making things, whereas the latter is more to do with making things happen. Anticipating the impact of developments in technology on broadcasting, and the BBC in particular, over the next decade will involve focusing less on what is possible, and more on what is likely. A third vital element is the means to make things pay. In terms of market penetration, the twin developments of broadband TV and digital take-up are the most significant. The latter presents more imminent challenges, given that over 50% of homes now have digital television. Ofcom has indicated that it should be feasible to complete analogue switch-off by 31 December 2012, in a programme of phased switch-off, one ITV region at a time.[15] This target date is consistent with that proposed by the BBC in Building public value.

30. The main platforms for delivering digital television are currently: satellite, terrestrial, and cable. However, the advent of digital subscriber line (DSL) television - delivered through existing copper telephone lines - provides another option for rolling out digital television, while at the same time suggesting that broadcast-quality broadband TV, from the Internet, may not be so far away. Sir Christopher Bland, former BBC Chairman and current Chairman of BT, told us: "I believe that broadband will become, at some stage in the next five to ten years, a very significant means of distributing television, film and moving pictures, and that is already starting."[16]

31. Both digital and broadband TV offer greater interactivity, though often this will extend no further than allowing viewers to "time-shift" their TV - watching what they want, when they want. Personal video recorders and video on demand seem likely to grow in importance. Time-shifting TV challenges the conventional paradigm of broadcasting, empowering individuals to personalise their viewing. While the traditional video recorder has always offered this in principle, the newer technologies are far better automated and easier to use, and much more material is now accessible, whether by internet, multi-channel TV or video on demand libraries. In effect, the logical extension of the new paradigm is a situation where viewers are offered a huge range of library and "live" content from which they can construct their own schedule: "pulling" in content rather than relying on choices between various channels being "pushed" out.

32. This is the technological backdrop to consideration of the BBC Charter review; it indicates an examination of the role of the Corporation as a national broadcaster and programme-maker. The justification of licence fee funding needs to be reassessed in the face of audience fragmentation. The existing governance and regulation of the BBC, and the length of any future settlement, can no longer be considered in isolation from a rapidly changing technological environment. This seems clear even with ongoing and predictable change. Whether any unforeseen technology will have a significant impact in the next ten years remains to be seen. The odds are long, given traditional barriers to take-up,[17] but the explosive (and unexpected) growth of text messaging provides one example of communications technologies' capacity to surprise. It is one example, salutary for the BBC, of the consumer dictating which technology, and which application of technology, is to prevail.

Visits

33. In addition to the formal evidence sessions held in Westminster and in Glasgow, the Committee has sought advice, with a particular focus on the future shape and pace of technological change, from a wide range of organisations and individuals including via a programme of visits.

34. In May, we visited BBC Research and Development at Kingswood Warren in Surrey, and witnessed demonstrations of the BBC's work on delivering information on programmes across a range of different digital platforms. This "metadata" is needed for effective access to content, allowing the viewer more control. We also learned of the BBC's work on the delivery of broadband content as well as the Corporation's central contribution towards driving digital switchover. A brief indication of the BBC's investment in "blue-sky" research was afforded by the experimental studio. Even here, the methods for mixing virtual graphics with real TV images has short-term application; for example in elucidating sporting tactics.

35. At Kingswood Warren, we also saw demonstrations of audio description and signing technologies. These provided an indication of services particularly relevant to people with sensory impairments, even if such services have at times taken too long to become widely available.[18] Nevertheless, we were impressed by the technical progress being made. It should be regarded as a duty that the BBC continue to pursue practical methods to improve the enjoyment of its services by people with sensory impairments.

36. In Dublin, Media Lab Europe provided the Committee with an indication of the way communications might develop in the longer term. As Lord Burns acknowledged at a meeting of the Westminster Media Forum, it is very important to look beyond the period of the next BBC settlement to develop a "route map".[19] Underpinning the work of Media Lab is a recognition of the convergence of communications technologies, and we saw how many of these could be combined and adapted to enrich viewing and listening experiences, improve interactivity and facilitate information assimilation. Media Lab Europe has been an independent, not-for-profit, international research institute. It would be appropriate for both the DCMS and the BBC to take account of the work undertaken there.

37. A key question issue raised during the Committee's oral evidence sessions was the nature of the entertainment platform or platforms in 2012 and beyond. This necessarily involves an appreciation of the interaction of content and technology. We obtained a wide range of perspectives on this during meetings in July, in Los Angeles, San Francisco and Silicon Valley. Whereas the last of these is associated with technologies of networks and platforms, Los Angeles is perhaps better known for content creation; and we were interested in assessing how content might drive, or respond to, new platforms.

38. In July we held meetings with Sony Pictures and Paramount Studios in Los Angeles. At Sony Pictures we discussed the importance to content producers of distributing that content as widely, on as many platforms, as possible; and the related question of safeguarding intellectual property rights in an era of consumer demand for immediate access. Paramount Studios provided us with demonstrations of emerging technologies, and their relationship with content, particularly in enabling greater involvement and control by consumers; examples included gaming and time-shifting of television programmes.

39. A visit to the American Film Institute's Enhanced TV Laboratory provided an international perspective of interactive television, which complements the more traditional passive TV paradigm. Interest in interactive TV was being driven in part by the appeal of computer gaming and competition between cable and satellite TV operators. We later visited the Fox Network Center, holding informal discussions with engineers engaged in upgrading the facilities to accommodate high definition TV. This is the key driver in the USA for the adoption of digital broadcasting, in contrast to the UK where multi-channel and interactive services are more to the fore.

40. The San Francisco Bay Area is recognised as a leader in technical innovation, notably in communications technologies. We visited Global Business Networks and UT Starcom, and also met with Rachelle Chong, a former Commissioner on the Federal Communications Commission and Member of the Board of the Association of Public Television Stations. With Ms Chong we discussed a wide variety of technical and regulatory issues, including those associated with a movement away from (predominantly passive) television viewing towards interactive behaviours, internet use and gaming. We were told that US public service broadcasters were often abjuring high definition TV in favour of providing more channels, catering for niche interests.

41. Our discussions with Peter Schwartz of Global Business Networks highlighted the possible scenarios that might develop as a result of increased bandwidth and improved compression techniques; enabling consumers to "pull", manipulate and store more and more content. We discussed the challenge that piracy posed to content providers' ability to earn income from their intellectual property. At UT Starcom, we were briefed on developments in broadband infrastructure, including the further potential offered by adaptation of existing telephone lines, and broadband's role as a distribution route for broadcasters. The Committee was given demonstrations of Internet Protocol Television and other broadband products.

42. We also were hosted by Apple, KPIX and Kasenna. The development of Apple's iPod has been notably rapid, and provided one creative response to music piracy by facilitating high quality, legal, music downloads from the Internet with associated, but comparatively low, payments. The unauthorised parallel distribution (i.e. piracy) of movies was occurring on a large scale, though limitations in bandwidth still presented an impediment to those seeking to misuse the Internet in this way. We discussed with Apple the need to strike a balance between the legitimate expectations and rights of users and those of rights holders.

43. KPIX is a local CBS station focusing on news and traffic reports. Here, we were reminded of the universal demand for local television services, and the ways in which commercial, public service and community broadcasters could respond to this. Kasenna provides software for video on demand services on broadband networks, and our discussions there included the impact these might have on traditional broadcast schedules.

44. In October the Committee visited the London headquarters of Video Networks Ltd, the company behind the Homechoice service, a world leader[20] in the delivery of IP TV which serves some 4,000 homes in London.[21] Homechoice combines broadband internet and television, along with video on demand; all delivered down a telephone line. It has recently added a voice telephony option to its range of services, which are paid for by subscription. It makes use of BT's local loop infrastructure to develop its own DSL (digital subscriber line) platform.

45. The other provider (Kingston Interactive) of IP television and Homechoice together had 9,000 subscribers in the second quarter of 2004. These services do offer a further platform for providing digital content to complement the more established cable, satellite and terrestrial broadcast alternatives; they should be able to make a significant contribution to successful analogue switch-off, for example in city centre accommodation blocks where both cable and satellite encounter difficulties.

46. Several of the people we visited commented on the different media consumption habits of younger people, which clearly have consequences for the take-up rate of new communications technologies. The Committee decided to gain further insights during visits, on 14 October, to West Thames College and Heston Community School to discuss a variety of matters including media consumption habits with a small, but lively and intelligent, sample of the young men and women of West London. These meetings also shed particular light on perceptions of the BBC among teenagers and we return to this below.

Technology and the BBC

47. The BBC has a long, and deserved, reputation for driving and responding to technological change. Thanks to secure funding and the ingenuity of its research department, the Corporation has contributed significantly to the success of the Freeview digital terrestrial television platform. While the speed and extent of the BBC's exploitation of the Internet has been more controversial, due to a detrimental impact claimed by competitors,[22] one outcome has been a range of innovative content and comprehensive online news coverage. What these broadcast and online platforms have in common is an ability to deliver compelling content. The BBC's primary status as a content provider will become ever more important with the growth in consumer demand for material tailored to different platforms: from mobile devices to wide-screen televisions.

48. The NUJ has argued that the BBC needs to continue its engagement with new technologies: "Nobody today argues that because TV came along (a new technology in the 1930s) that the BBC should have ignored it and stuck to radio".[23] These arguments were developed, and tempered, by Pact[24] who recognised that the BBC needs to respond to changing technologies, and to commission public service broadcasting content which reaches out to licence payers across all platforms. According to Pact, "the BBC should only seek to create its own platforms where it is appropriate to do so - the Freeview service is an example of the BBC stepping in where the market failed to supply a working model for digital terrestrial television."[25] The Creators' Rights Alliance argue that "broadcasting", in its widest possible meaning, should encompass new technologies as well as radio and television.[26]

49. The BBC, having drawn a line under its linear television portfolio, is determined "to make its programmes and content as widely available and accessible as possible, using new platforms and technologies, and in partnership wherever it can, to tailor that content to the needs of groups, families and individuals."[27] The BBC Director-General commented to us on the additional distribution costs that would accompany content delivery across multiple platforms.[28]

50. The fast pace of technological change has implications for the level of training made available in the BBC and throughout the wider audiovisual sector. In this context, Skillset has argued for significant investment by the BBC in freelancers and in support for industry-wide collaboration. This is necessary to enable the BBC to remain at the forefront of technology, and to provide and train the workforce with the skills needed to exploit it.[29] Jeremy Dear, General Secretary of the NUJ, told us that "the majority of training in technological change and adapting to technological change is carried out by the BBC."[30] We hope the BBC will maintain a commitment to high levels of training.

51. Professor John Naughton linked the presence of stable long-term funding to the BBC's ability to drive technological innovation. In particular, "creating, maintaining and developing the world-class online assets, now owned by the BBC, requires investment in technological innovation as well as in content. And everything we know about the funding of radical technological innovation in universities and industry tells us that it requires stable funding over long periods with few demands in terms of 'deliverables'.[31] While the licence fee may not provide the most appropriate source of stable funding for "public service webcasting", it has all the same contributed to the BBC's ability to drive consumer adoption of digital radio and digital terrestrial television.

Digital switchover

52. Until 1998, all television channels in the UK were received in analogue form, whether by aerial, satellite dish or cable. Analogue broadcasts deliver information in the form of a continuously-varying signal superimposed on a (carrier) radio wave. An analysis by the Parliamentary Office of Science and Technology explains why (discrete) digital signals can be broadcast more efficiently, thus freeing up more radio frequencies for a great deal more content (e.g. more channels) to be broadcast as well as other applications with a range of benefits.[32]

53. According to a written ministerial statement by the Secretary of State, the Government continues "to believe that an ordered process leading to the earliest practicable switchover remains desirable given the advantages to consumers, the broadcasting industry and future growth of innovative new services. We believe that switchover should be broadcaster-led but that the final decision on timetable should balance these benefits against the need to ensure that the interests of the most vulnerable consumers are protected."[33]

54. A Consumer Expert Group, chaired by Allan Williams of the Consumers Association, was established to review the Government's availability and affordability criteria for digital take-up. These were set in September 1999 and include, as a target indicator of affordability, 95% of consumers having access to digital equipment. The Group's report[34] was published on 11 October 2004. Among the steps it identified were:

Ensuring that converting to digital television equipment is affordable to all households, including those on low and fixed incomes.
Putting in place measures to assist low income and special needs groups to switch to digital television.
Carrying out a formal publication consultation exercise about the policy, timetable and process for analogue switchover.
Setting a test that before switchover is announced, 70% of households should have adopted digital television for their main television set.
Raising the profile of switchover through a public information campaign on both consumer issues and switchover policy.

55. So far as assisting low income and special needs groups, the report recommends provision of assistance for the full costs of converting one set, including the cost of aerial replacement, installation and VCR conversion. We recommend the Government gives serious consideration to the need for measures, and the timetable for their announcement and implementation, to make digital switchover affordable and practical to people on low incomes and those with special needs. Careful consideration should be given to all the recommendations of the Consumer Expert Group, chaired by Allan Williams of the Consumers Association, particularly in relation to providing assistance with the full costs of converting one TV to digital. We further note that these recommendations chime with those made by the Consumer Panel at Ofcom.[35]

56. The switchover project is currently being managed through the Digital Television Project, a collaboration between Government, Ofcom, broadcasters, industry, consumer groups and others. As noted earlier, both the BBC and Ofcom have suggested that 2012 may be the most appropriate date for completion of switchover - which presupposes the process will begin much earlier for some regions.

57. Achieving digital switchover is a prime priority for the Department for Culture, Media and Sport. We do not believe the activity by that Department is commensurate with the challenge. More information should be forthcoming on the costs of acquiring digital equipment and on the benefits it offers - not least to people for whom four or five linear channels suffice. If the Government is to be able to achieve its objective of digital switchover, far greater and more public efforts are needed to promote this. We recommend the Government takes steps to promote more actively public awareness and understanding of digital switchover.

58. Ofcom has recommended the establishment of a separate body, to be called SwitchCo, to manage the process towards digital switchover. In response, the Government has held discussions with broadcasters, and other stakeholders under the Digital Action Plan, on the role and structure of the organisation that will be responsible for this co-ordinating role.[36] We recommend that the Government bites the bullet and sets out a clear path and timetable for digital switchover.

59. Ofcom has also recommended that the Government adds specific obligations to the BBC's general obligations to promote digital TV. "They should include obligations on rolling-out digital transmission nationwide, providing public information, continuing to provide its channels on the free-to-view satellite platform, and providing on-air marketing of digital TV on a platform-neutral basis."[37]

60. The BBC deserves credit for the initiative it has shown in promoting awareness of digital services and in contributing towards switchover - not least with its involvement in Freeview; this is transforming the digital landscape with some 4 million households now using the service.

61. The BBC has also announced its intention to develop a free digital satellite service, which it calls Freesat, and which offers the potential to reach areas not served by terrestrial digital.[38] BSkyB has already launched a similar service, though it is difficult to predict how this might develop in the longer term, given BSkyB's primary and legitimate focus on encouraging the take-up of subscription TV. Because BSkyB understandably hopes to enable those who take up its "free satellite" offer to become subscription customers, its set-top box includes the potential for upgrade making it substantially more expensive than Freeview.[39] We therefore believe that, notwithstanding the increased number of channels offered in Sky's free-to-air satellite service, it is imperative that the BBC works with other providers to create an alternative "Freesat" option.

Creative Archive

62. In Building public value, the BBC commits to launching a Creative Archive, providing "free access to BBC content for learning, for creativity, for pleasure." The BBC's ambition is that, starting with factual material, online access for non-commercial applications will eventually extend across all areas of its output.

63. The Electronic Frontier Foundation espouses the benefits that will accompany the establishment of the BBC's Creative Archive, and supports its becoming a core element of BBC services. Ultimately, this could comprise the whole of the BBC's extant archive of radio and television programming, placed online under a licence that permits non-commercial distribution and re-use of this material by "remixers". This open licensing system is similar to that deployed by the Creative Commons initiative, a system of "some rights reserved" copyright.[40] And it is possible that, by enabling non-commercial exploitation, there is created "a gigantic and clever series of advertisements for the commercial rights" associated with the works.[41]

64. The Creative Archive brings to the fore what Professor John Naughton termed the "maniacal obsession" with intellectual property. In his view, the copyright industries "see digital technology as an unprecedented opportunity to extend control over how copyrighted material can be used to a degree that was inconceivable in an analogue world."[42]

65. In written evidence, the Music Business Forum expressed concerns that such initiatives should not be allowed to "ride rough shod over the copyrights and performers' rights of those who contribute to BBC programmes".[43] There had to be provision for rights holders to be paid for the additional use of their work through access to archives. This should be the case whether in the form of repeat broadcasting fees, extensions of the collective bargaining agreements in place for the payments of revenue for secondary uses, or through the negotiation of clearance for the right to exercise new rights on individually negotiated commercial terms. The BBC ought to consider the case for the implementation of encryption and digital rights management applications in order to counter growing piracy - whether via internet or personal video recorder downloads. The MBF is concerned that while this is available free and unpoliced, commercial download services will be unable to compete and artists, writers and the other creators will have no means of getting paid. "The BBC, as a publicly-funded organisation, has a responsibility to be seen at every opportunity to be upholding the systems of rights that operate in the UK, not least to act as an example to others. The licence fee does not of itself authorise licence fee holders to the free use of BBC output in whatever way they wish."[44]

66. We strongly welcome the BBC's proposals for a Creative Archive, and agree that access to this should be free for non-commercial applications. We look to the Corporation to develop, in cooperation with intellectual property owners, innovative solutions that appropriately balance the interests of rights holders with those of the wider public. Digital rights management is a key issue in the modern media environment, and we recommend the DCMS establish a forum for assessing its implications.

15 Statement: Digital Replacement Licences offered to Channels 3, 4, 5 and Public Teletext, 29 November 2004 Back

16 Ev 91, Q 46 Back

17 Ev 239, Q 616 Back

18 Ev 30 Back

19 Westminster Media Forum Seminar on the Future of the BBC, 25 February 2004 Back

20 Ev 140, Q 260 Back

21 According to Ofcom figures for the second quarter of 2004, Homechoice was connecting 3,870 homes to "TV over ADSL"(i.e. IP TV) Back

22 Ev 142, Q 270 Back

23 Submission to the DCMS on the 'Review of the BBC's Royal Charter', NUJ, March 2004 Back

24 Producers' Alliance for Cinema and Television Back

25 Submission to the Review of the BBC Charter, Pact, March 2004 Back

26 Ev 177 Back