Examination of Witnesses (Questions 340-359)
DIGITAL UK
13 DECEMBER 2005
Q340 Chairman: Although you will
have heard they suggested that in fact we were going backwards
rather than forwards in terms of the number of analogue versus
digital sets being sold.
Mr Ennals: The point is, and I
think this was ultimately made in the session, there is no such
thing as an obsolete TV out there. Any analogue TV being bought
today is capable of receiving digital TV, you just need a digital
receiver. What we have seen in the last few months after the Secretary
of State's announcement on 15 September has been a very big switch.
What we have seen is Sony announced at the beginning of this month
that they would no longer be making and selling analogue TVs in
the UK. We have seen Dixons confirm that their future ranges as
they plan 2006 and beyond will be focused on digital TVs. We are
seeing a very strong demand for digital TVs and set-top boxes.
We are seeing the sort of switch that Danny Churchill from the
Dixons Group was hoping would happen to kick-start this programme.
Q341 Chairman: When you heard Danny
say to us that there would be six months in order to achieve the
increase in the sale of digital sets which would be necessary
in order to make this process work smoothly, you are relaxed we
are going to achieve that in six months?
Mr Ennals: I do not think I am
relaxed about any aspect of this programme. As Stephen said, it
is very complex, it does touch every single household in the country
and it needs to be very well managed and tightly monitored and
controlled. In terms of the next six months, we are working with
Danny Churchill of the Dixons Group and, indeed, the supply chain
on a programme of communication that will make sure we boost awareness,
we boost understanding, particularly in the run-up to the World
Cup where I believe you have a 30% increase in TV sales, that
people are aware of digital switchover and their digital options.
Q342 Mr Sanders: There are going
to be some real problems, are there not, in some households where
the main television will be connected digitally but the other
analogue televisions will be no more? There will be a possible
implication of wanting to either connect those up, if that is
technically possible, or to change those sets if that is affordable.
When we hear all this talk of 98% of households receiving digital
and that increasing choice, that is not the whole story because
for many households there will be less choice because there will
be only one television set through which they can view television
channels. You can only watch one channel at a time so it does
not matter there are 50 channels available to one set, the fact
is you have only got one set. Is there not a danger that people
are going to feel very resentful at the end of this process that
they had not realised that the other sets are redundant? What
are you doing to get that message across?
Mr Ennals: As you said, it is
not a simple matter. I think there is an important communication
and education job that needs to be done. We are confident that
every household that wants to watch television on every TV they
choose to use will make the decision to connect it digitally.
As you said, we recognise that on average people have two and
a half TVs in their home and in the research we have done people
have expressed interest in sustaining that. Indeed, if you look
at the Ofcom cost work it does assume that everybody does convert
at least two TVs and that drives the average cost per household.
That is built into the current cost. As you say, I think part
of what we have to do is (a) building awareness, (b) building
understanding of digital switchover, and (c) making sure people
understand what they need to do. We have been in public meetings
in Galashiels, in Melrose, in other parts of the Border region
and people are asking for very simple, straightforward information:
"Tell us what we need to do, tell us when we need to do it".
What is interesting is that we are not getting people saying,
"We are uncomfortable about the policy"; in fact, quite
the contrary, a lot of people are saying, "I cannot get 4,
I cannot get Channel Five, we want to get Freeview but we are
out of coverage". Indeed, I think there is real public support
for this programme but they need help and they need the information
to make it happen.
Q343 Mr Sanders: How much of your
budget is going to be devoted to that sort of marketing side rather
than the management and public relations side, your relationship
with the media? How much of it is actually going to be on direct
communication with the public?
Mr Ennals: We have a very detailed
programme of communication over the next three to seven years.
We would estimate that would be not less than £100 million
of expenditure on communication to the consumer. It is not just
straight advertising, it will also include leaflets which we have
already put into libraries and Citizens Advice Bureaux around
the country. We will be mailing every household at least twice
during the programme of switchover. Obviously we will be communicating
on TV, on posters, in the press, making sure that people know
what they need to know. In addition, we will be co-ordinating
with the retailers and with the manufacturers to make sure they
get the messages out. The reason why the Border TV region, which
is the first region to go, has a very high awareness of digital
switchover now—it is measured at over 80%—is if you
look in, this is the Whitehaven News, I am not sure you
are necessarily familiar with this publication, I will leave it
for you to peruse afterwards, you will find communication not
just from ourselves but also from Sky which spells out when digital
switchover is happening and what they need to do. What you will
see is not just the money we are spending but the activities across
the industry co-ordinated to make sure the message gets out.
Q344 Mr Sanders: That is always the
best way of getting a message across, to have it coming at people
from different angles and different areas. At the end of the day
you are going to be spending a considerable amount of money, who
are you accountable to for spending that money?
Mr Cox: We are accountable to
the shareholders, who are the public service broadcasters and
the commercial multiplex operators, and they are accountable through
the licences they have from Ofcom and through the Charter. That
is the line of accountability, and in that sense accountable to
you.
Q345 Paul Farrelly: We heard earlier
on the powerfully put education argument, or the minimisation
of confusion argument, to back up the 98.5% target. I live in
an area where my analogue reception is not brilliant but my digital
reception is awful and it is usually awful when someone is scoring
a goal or going over a try line. When I switch back to the analogue
I can see the thing even in a blizzard, whereas the mosaics completely
destroy the digital TV. I do not know whether it is my aerial
at fault or, if I was a consumer, whether it is simply because
the analogue signal reduces the power of the digital signal. There
is confusion there. I raised this in the last session. To my mind,
it would not be too problematic for people involved in the
implementation to identify those problem areas and it would be
a great business opportunity for people in the aerial business
to work with yourselves to plan a programme so that people address
this early. My question, given all that, is how hands-on is your
guidance intervention going to be and how free market? For instance,
would you recommend that accreditation is not only of importance
but should be compulsory? Would your intervention in your public
information campaigns lead to telling Edna, who lives next door
to me, that she should not pay more than X number of pounds to
have her aerial tested or altered? How interventionist do you
think you should be?
Mr Ennals: I think Stephen referenced
it when he was speaking. There is an intent and a duty to make
sure that customers not only get the information they need but
are protected. To that end, there is an accreditation programme
in development and is now in motion, called the RDI scheme, the
registered digital installer scheme, whereby aerial installers
go through a programme where their expertise to install digital
aerials is checked and verified but also they have a background
check so that people can be confident when they are called out.
They will be able to use in their own marketing literature and
when they talk about their business the digital logo, the digital
tick. In our communication, on our website, in our call centres,
we will encourage people to make sure they are using a certified
aerial installer. We will make sure that the training of those
installers is sufficient whereby they will be able to identify
the sorts of characteristics they have and we will be able to
give them guidance on how to remedy it. We heard from Tim Jenks
of the CAI that he is confident that he can mobilise his sector.
There is a requirement to have more trained aerial installers
to deliver the programme but over the seven years I think we have
sufficient time to do that. One of the great benefits that people
like Greg from Ofcom, the BBC and Mike are wanting, and Mike might
want to comment on, is we want to give people an early warning
of whether they may need to consider a new aerial and part of
that is what we call an on-screen aerial indicator whereby there
will be a device on-screen that will indicate whether their signal
is of insufficient strength that might suggest they need help
with the aerial. Do you want to detail that?
Mr Hughes: It is early days but,
as you heard from Greg Bensberg, the Ofcom research has shown
there are ways that people can identify the quality of their signals
and that is to do with the interference that they see on-screen
in the analogue domain. Together with BBC R&D and the DTI
and Ofcom, as Ford says, we are developing the idea of an on-screen
indicator. It is early days and we have yet to take it out into
the public to see whether it really works. Certainly in the lab
and in the meeting room it is looking very promising. The idea
of this will be that once we have re-engineered the antennas on
the transmitter masts so that we are in the post-switchover domain,
still however broadcasting in analogue, we would ask the broadcasters
to display this on-screen indicator, and the detail of how that
is exactly going to be done has not yet been decided. The concept
is that if people can see the indicator then they ought to be
able to take reasonable comfort that their aerial is going to
be okay to receive digital after switchover. In your own case
where you are seeing analogue okay that suggests you would be
in that position. If people cannot see the indicator then it would
be a call for them to get professional advice. At least we get
over one of the first hurdles that you were expressing concern
about earlier, that people get aerial contractors knocking on
the door speculatively saying, "We have come to change your
aerial because you need one". At least, we are hoping we
will give people a bit of comfort that the circumstances where
they do need some help will be clear to them in that sense. If
I can just go back to your original personal case, what it suggests
to me if you can receive analogue okay but you are having trouble
with digital is that you will be okay afterwards because one of
the advantages of switchover, as I think has already been rehearsed,
is that at switchover we will be able to increase the power of
the digital signals, so in your case you should be okay.
Q346 Paul Farrelly: It has been quite
clear that you are prepared to give consumers what economists
might call quality signals, a recommendation that they should
go with an accredited digital installer, but what about price
signals: "Typically in your area you should not pay more
than this for an aerial check"? Do you see that as being
helpful?
Mr Ennals: It is something that
we have discussed. Our position at the moment is both within our
call centre and on our website in the information we provide we
would aim to give people an indicative range. We will lay out
the different options for how they go digital and we need to recognise
there are very different costs associated with that, but in the
area of digital installers we would suggest what a range for the
region might be. I do not think we would want to be any more precise
than that.
Q347 Paul Farrelly: Would the SwitchCo
website, for instance, provide up-to-date price comparisons for
those people who want to check between the costs quoted by different
organisations or installers? Would you provide that sort of service?
Mr Ennals: Probably not as dynamically
as that. We are not here to sell individual services on behalf
of installers or, indeed, sell equipment on behalf of manufacturers.
Q348 Paul Farrelly: Comparisons would
be very helpful to consumers.
Mr Ennals: What we would aim to
do is let them know where they should go to comparison shop and
we would give them verifiable sources of equipment or aerial installers.
Q349 Paul Farrelly: I can see Barry
writing all of that down.
Mr Cox: That is quite a good idea.
On your point about leaving it to the free market, obviously there
is still to be decided by Government and the BBC the whole vulnerable
group issue which will be managed and to some extent that could
deal with problems for those groups.
Q350 Rosemary McKenna: At the beginning
of the whole exercise we had a panel of experts in front of us
who were somewhat colourful in their views, but immediately after
them we had the voluntary sector and they started off by telling
us that we were talking among ourselves, which was probably true
at that time although a lot of us were on a very steep learning
curve and I think we have learned a lot. Hopefully from what you
have said this morning there is much more information going out
and we are no longer talking among ourselves but the population
at large are beginning to become aware of this. How aware are
you of the importance of the voluntary sector in all of this?
We had the RNIB, Age Concern and people like that in front of
us and I recognise they will have a really important role to play
within the community. Are you aware of that and is it your role
to work with them?
Mr Ennals: Absolutely. We have
what is called a Consumer Expert Group that meets on a regular
basis with ourselves and DCMS. They inform all parts of our programme.
As Stephen said, we have nine work streams of work and we consult
with the consumer experts who consult experts who represent organisations
like the RNIB, the RNID, VLV, the CAB, Sense, Help the Aged, Age
Concern, the broad range of consumer organisations. We get their
help, their information, their guidance on our communications
strategy, on the assistance programme, on every facet of the switchover
programme. They have done a fantastic job of inputting into that
and we listen to them very, very carefully. In addition to that,
we do believe there is a value to seeking how we can help more
people than are helped by the Government targeted help scheme.
We have set up a working party working with the Ofcom Consumer
Panel to look at people who fall outside the boundaries of the
targeted help scheme who may need additional assistance. In delivering
that, we are talking with local organisations, whether they be
local authorities and councils, community groups, charitable groups,
who can support contact, communication and help on a local level.
These sorts of organisations are very well placed to do that.
Q351 Rosemary McKenna: I would agree
with that, I do think they are important. Without patronising
the elderly, because many of them are far more aware of what is
going on and certainly know how to access all the services, there
will be a group of people who do need that additional help.
Mr Ennals: Absolutely.
Q352 Rosemary McKenna: On a different
tack, can I ask you who is in charge of digital switchover and
where does the buck stop?
Mr Cox: Unfortunately, it is not
going to be a simple answer as you probably detected from Stephen
Carter. One of the fascinating things about this project is that
we have some of the biggest companies in the UK, and indeed some
of the biggest companies in the world, for whom this is their
daily business, they make stuff, they sell us stuff through the
retailers, the broadcasters deliver the services and transmission
providers build the networks. In that sense, it does not need
the intervention of some all powerful body above them telling
them what to do; they would not do it. I mentioned at the beginning
the legal underpinning, which is quite narrow. The Communications
Act allows—obliges—Ofcom to set the licence conditions
but they are quite limited. The BBC will have the same conditions
in its Charter when that comes into play. That is the leverage
that the Government and Ofcom have. It is applied through the
public service broadcasters, that is why they are our shareholders
predominantly. Outside of that, you have got the wonderful world
of Sony, Dixons, Comet, Argos, Tesco's, they are all doing it
and that makes it difficult to answer in the way you have put
it. There is no single lead organisation. We are the lead point
for the consumer who wants help, advice and understanding, and
to that extent you could say we are, but it is with those caveats
that they are very powerful organisations all alive to switchover
and wanting to make it happen.
Q353 Chairman: One thing worries
me slightly. You say that essentially you are in charge of the
process, at the end of the day you are going to have to go to
the broadcasters and make this happen, yet you are owned by the
broadcasters, they are your shareholders, so if you went into
them and said, "Look, this is not going to work unless you
do A, B and C", they could turn round and say, "No,
we do not like that, you are fired because we are your shareholders".
How does this relationship work? Do you tell them what to do or
do they tell you what to do?
Mr Cox: It works with great subtlety
and sophistication. Inevitably that tension is theoretically there
but in practice it is not. We have been playing at getting this
together for four years, everybody knows each other very well,
we know what the issues are and we are very comfortable with what
we have to do. Ford has to do it but the people you are referring
to are not fighting each other, they are not going to fight us
on this. We are set up to enable them to meet their licence obligations
in the case of the commercial broadcasters. They are perfectly
happy with that.
Q354 Chairman: Whilst they may be
now, three years in as we get closer to the day you can see that
tensions may build up a bit. If there is a dispute then surely
there is a real danger that a clash is going to arise?
Mr Cox: In the end the people
who resolve it would be either Ofcom or Government because they
are the people to whom the broadcasters are accountable. We have
very active working relationships with both Government and Ofcom,
we meet them regularly. If these things begin to surface they
will be sorted out long before they cause a crisis.
Q355 Chairman: So you would appeal
to Ofcom or Government to step in and back you up?
Mr Cox: Absolutely.
Mr Ennals: What I would say is,
and you heard it from the public service broadcasters, digital
switchover is very much part of their strategy, it is their policy
and they support it. I do think it is right and proper for our
board, who as you point out is made up of the PSBs, to ensure
that the programme of work that myself, Mike and Barry are leading
is actually done well, is done to budget and to the agreed timescale.
That is where they are quite right to scrutinise what we do.
Q356 Rosemary McKenna: Do you have
enough power? Are you financially robust enough and do you have
enough power to bang heads together if necessary?
Mr Ennals: Obviously we listened
with interest to the initial session you had with Andrew Wheen,
Chris Goodall and David Elstein and I thought that was very helpful.
I thought the points of view expressed there were valuable. As
well as opening ourselves up to public scrutiny like this, and
we welcome the opportunity to give evidence here, we should learn
from people who have gone before. I am pleased to say that subsequently
I have had the opportunity to meet with Andrew and Chris and we
have had a very good session with them, and in some cases they
recognised they did not fully understand the activity that was
in place and the programme as it was developed. I think I have
got a key piece of learning there, which is we need to make sure
that all parts of industry and all opinion formers are fully informed
with the programme details, and I think they recognised they were
not sufficiently au fait with that. Andrew Wheen referenced
about OGC, the Office of Government Commerce, and we had a review
a year ago by the OGC in terms of our programme structure and
we have recently had a subsequent update. What that confirmed,
which is what Barry and I believe, was that we have the necessary
authority, that we are correctly structured and it is early days
yet but we are set out to do the job in an appropriate way.
Q357 Mr Evans: I thought they put
the fear of God into everybody?
Mr Cox: We were fearful but we
are happy with the outcome.
Mr Ennals: I talked with both
Andrew and Chris and I invited David to come and see us and that
invitation is still there.
Q358 Mr Evans: He is a very busy
man, you know.
Mr Ennals: He was on a platform
with me and the Chairman at the Westminster Media Forum when we
were about to lay out our programme of work but, unfortunately,
he was not able to stay to see that. We look forward to the opportunity
to catching up with David. As I said, I think the Channel Five
experience, and indeed the DTT rollout and launch of Freeview,
are very, very relevant to case studies here. We are working closely
with people who have been involved with them and that is what
connects Andrew, Chris and David, their involvement in the Channel
Five programme. Mike Hughes was also very much a part of that
programme and part of the DTT rollout. We have got individuals
who were involved in the Freeview launch as part of our programme.
Currently we are working with the Mastercare organisation who
are supporting the work in Bolton in the targeted help test and
we are looking to see whether there is a role for them in supporting
the programme. We are making sure that we build on the previous
learning. Just to give you one example: if you take what is happening
in Bolton today, the security checking process whereby individuals
have a code number that they make sure the person coming to visit
them has, that came from the Channel Five exercise. Even where
things went wrong, and clearly they did in the Channel Five experience,
there is learning to be had and we will make sure that we learn
it.
Q359 Mr Evans: Can we get a definitive
cost off you then if you are a family living in the Border area
and have three television sets and let us say you have got an
iffy aerial which is going to need some seeing to and one video
recorder, how much is that going to cost you?
Mr Ennals: We absolutely support
the Ofcom piece of work and that suggests the average household
cost would be between £90 and £100 per household. They
demonstrated if you have two TVs and one VCR it would be of the
order of £130-£140. If you have got an additional TV,
and I indicated about 20% of people are in that situation, you
can add another £20-£30, so you are looking at about
£160. On this aerial, I do think the aerial matter has been
overstated. You heard from Greg from Ofcom who suggested that
no more than 10% of people will require a new aerial and in most
cases those people have poor aerials and poor reception today.
Once again, the cost of getting a new aerial can range anywhere
between £95 and £130.
|
