Examination of Witnesses (Questions 500-510)
BSKYB
20 DECEMBER 2005
Q500 Chairman: So therefore, in your
view platform neutrality is not achieved simply because of the
obstacles being put in the way by government for people who put
up satellite dishes?
Mr Le Jeune: That is exactly our
position and we find that in terms of joined-up government and
the general national drive towards digital that this would have
been a pretty quick win, as it would have been to amend building
regulations to encourage the potential provision of digital services
in multiple dwelling units, which is a rather ugly term that describes
blocks of flats, et cetera, which we also cover in our submission,
and it strikes us as being a bit of an own goal really.
Q501 Chairman: But given that the
Government has just come forward with its regulations, you presumably
made that case and failed to persuade them?
Mr Le Jeune: We did and I think
what we would now encourage is that if progress can be made on
a voluntary basis with perhaps Digital UK and others pushing that
forward with developers and builders, then that is the next best
thing, although it is a long way from the ideal. That could be
done as quickly as possible. It took nearly three years for that
consultation on planning to be completed, which given the demanding
timetable for digital switchover is odd.
Ms Airey: Platform neutrality
is one thing that we would really urge this Committee to look
very hard at, which I know you have been doing as various interested
parties give their evidence. The BBC have most powerful promotional
tool behind them. It is pretty galling when they are promoting
Freeview—Freeview is the descriptor—as a brand descriptor
of a group of channels and then they refer to Sky or satellite
services as "digital satellite" and cable as "digital
cable" when most consumers would know it as this is NTL or
this is Telewest or this is Sky. They do not use those brand names
but they do have a brand name for their own service, for Freeview.
That is hardly neutral. As Martin said, Digital UK have learnt
the word neutral and understand the meaning of the word neutral,
but it seems to be brushed from the lexicon, to be frank, of the
BBC. It does give the Freeview platform a huge advantage and they
should be neutral and if they are trying to reach—and they
should be trying to reach—digital in as many homes as possible,
they should be platform neutral in their messages, and we just
do not see that.
Q502 Chairman: Your view is that
the use of the term "digital satellite" rather than
"Sky" is a significant disincentive?
Ms Airey: No, it is not a disincentive.
We are asking for consistency. If they are referring to us as
digital satellite they should refer to Freeview as digital terrestrial.
Mr Darcey: If they want to use
the Freeview brand then the consistent treatment would be to refer
to NTL and Telewest and Sky and to use the words that people actually
understand. This is something that really hit home for us when
the compulsory policy was announced and we started speaking to
our own base of connected customers. We were rather alarmed to
find that many customers do not really think of themselves as
having satellite, that is not the way they describe it. If you
ask them "Do you have satellite?" They say, "No,
we have Sky." Okay, that is the language people use. Digital
satellite is a form of words that is used in the industry but
it is not particularly meaningful to the man in the street and
we have found that a significant proportion of our base are not
aware that they are digital today, which again I think is probably
being prompted in part by the BBC promotion and its confusing
use of words.
Q503 Chairman: But would it not be
the case that if you achieved your aim of getting the BBC to say
in every trailer for BBC Three or BBC Four or digital audio broadcasting
or whatever "this service is also available on Sky",
that is advertising worth millions to you?
Mr Darcey: Much as it is worth
the same to Freeview today and has been for the last three years.
It is true it is very worthwhile and we are not asking for special
treatment. In fact, we are asking for a reversal of the special
treatment, a levelling of the special treatment that has been
in place for the last three years in which they market Freeview
as a brand which is to the benefit of them and the other terrestrial
broadcasters and refuse to name any of NTL, Telewest or Sky. It
is not platform neutral and in fact it is distinctly unhelpful
because it is confusing. If their interests really lay in promoting
digital take-up and getting the country towards switchover then
they would have no problem with that. I think you are absolutely
right, it is an enormous step for the BBC to use the S-word—by
that I mean "Sky" not "satellite" on air,
and they are clearly very reluctant to do so. While they refuse
to do so let us not pretend that this is a platform neutral policy
because it is not.
Q504 Chairman: That is your view
of the BBC. How do you see Digital UK and the Government in terms
of platform neutrality in this process?
Mr Darcey: We have a very good
relationship with Digital UK. Is Ford still heree? I have considerable
confidence in Ford and his team. I think they have got the whole
platform neutrality idea. They are very keen about the role satellite
can play, particularly the role Freesat can play. Ford never tires
of explaining to me how low DTT reach is in the Borders area,
for example, and what a big a role he thinks satellite is going
to play. I think that is fine. I think he is doing a good job
there. The problem is he is not the only player on the stage.
There are some other very major players on the stage and I think
they have been entirely clear in speaking to you that they are
not platform neutral. They have been quite clear. They have said
they much prefer a customer to go the Freeview route because it
is a more constrained platform, they as terrestrial broadcasters
face less competition on that platform, and so they suffer less
dilution of their viewing. So they quite clearly are not platform
neutral and they are going to have a big influence on the way
this plays out, on the way the money spent, and the messages.
It is very hard for Ford and his team, as platform neutral as
they are, to compensate for the structural non-neutrality of some
of the other important players.
Q505 Chairman: I notice in talking
about neutrality we have talked about cable, NTL, Telewest, satellite,
Sky but we also had as a previous witness just before you Homechoice
and they would argue that their service provides considerably
more than the consumer is able to obtain from a satellite service
and therefore they should also be given the opportunity to make
their facility known to viewers through trailers on the BBC and
so on.
Mr Darcey: And perhaps they should.
In the end I think that would be for the BBC. If they could ever
get over the hump of being neutral they would then have to consider
the next question of just who should qualify. I think there is
a question in there of whether you should talk about services
for which you must pay a monthly subscription. The first step
for the BBC would be to talk about Freeview and Freesat options
as places where you could get the BBC's services without a subscription.
I think that is step one. My understanding is (and maybe I am
not up-to-date) that neither cable nor Homechoice have an option
where there is no monthly payment, or maybe they are thinking
of that. Then there is the next step of whether you are also willing
on the BBC to talk about the other ways in which you would get
these services as part of another service that you were acquiring
and then you would be into Sky as a subscription provider and
NTL and Telewest and Homechoice, and perhaps others.
Chairman: Adam?
Q506 Adam Price: In terms of the
vulnerable groups that we talked about earlier, and I think you
referred to the elderly and the economically inactive in particular,
in terms of the Bolton trial what do you think are the lessons
so far in terms of accessibility for these groups who are potentially
excluded from these services?
Mr Le Jeune: It is a trial and
it is continuing so I am a little bit wary of drawing immediate
lessons until we have had the chance to reflect on that. I think
the things that we are bearing in mind, if you like, our kind
of tick sheet or record sheet for the way the process is going,
is that we are very aware that there is some pressure for those
vulnerable groups to be given the cheapest option, and whilst
that has a surface logic, our concern would be that those who
are vulnerable are not necessarily those who should be given the
cheapest option. In particular, if you are, for example, housebound
then you may indeed have a greater need for the interactivity
that can be delivered by other platforms. This is not a satellite
provision necessarily. Other providers, particularly cable, would
say the same, I suspect. You might be more in need of those services,
so that is one thing we have to bear very strongly in mind. The
other thing we do and I would submit do very well is that we cater
extensively for subscribers with various disabilities at the moment.
We know how time-consuming and intensive that has to be and one
of the things which I think will be taken forward as communications
around switchover develop will be just what degree of support
is required where again just giving somebody a free box and saying,
"Alright chum, you take it from here," may not in fact
be the most cost-effective option for them nor indeed the most
useful option in terms of the services that they require. So I
think "watch this space" is probably a direct answer
to this question but we are concerned about those aspects.
Q507 Adam Price: But in terms of
your offering to the visually impaired and hearing impaired you
think that your offering might potentially provide more benefit
so it could be an attractive option in terms of those groups?
Mr Le Jeune: I think perhaps there
is a slightly more general point here as well about those who
are disabled in some way because it is those groups who are, for
one reason or another, exactly the kind of people who need constant
contact with government, local authority or charitable services
where that interactivity comes into play. We, like other broadcasters,
provide broadcast services for the visually and hearing impaired
because there is a system regulated by Ofcom to make sure we do
that. What we do beyond that is make sure we offer specific helplines,
telephone lines—it is covered in our submission—and
so forth for disabled customers because if they are going to engage
with a company like ours we have to give them special routes to
do so and not just treat them as we would any other customer because
they need more help and they often need more time on the telephone
and advisers who know what they are talking about and engineers
who are trained to working with the disabled and so on and so
forth. All of this will have to be replicated for a much broader
population during the course of switchover, and we are happy to
contribute our experience and expertise to that but we are holding
up a warning card at the moment.
Q508 Adam Price: What about some
form of public subsidy in order to help you to provide your services
at a cheaper rate possibly to the over 75s? I think that there
was some special help there available for the economically disadvantaged.
Is that something that you would consider or are discussing?
Mr Le Jeune: The decision about
whether to offer public subsidy of that kind of course is not
for us. There has to be a decision made in terms of what is a
good balance of public expenditure and what really helps people
to achieve services, but if the Government decides on the basis
of what we have argued and others have argued that there are advantages
in a more interactive service provided by another platform with
a satellite, in our case, or cable, then we would look very seriously
at working with that scheme because obviously it would be in our
interests and subscribers' interests to do so, or rather future
subscribers.
Q509 Adam Price: Would it be possible
for you to segment in one way an offer of a different tariff to
people over 75? Would that be technically or commercially possible?
Mr Darcey: I think it is pretty
tricky. The £150 price is basically what it costs. We have
pushed that to where it is. What we would encourage the Government
to think about in the BBC in designing the schemes for the vulnerable
is in considering what is the appropriate way to get a vulnerable
household ready for switchover, they should think beyond what
is the cheapest bit of kit they can put in that home and they
should think what is the most appropriate piece of kit to put
in that home. If that is a £50 Freeview box from Dixons that
is fine but if the best proposition is a £150 Freesat offering
from Sky or from the BBC then that should be a candidate. It should
not be discounted because on face value it is not the smallest
number of pounds on day one.
Adam Price: Thank you.
Q510 Chairman: I do not think we
have any more questions. Can I thank you very much for giving
up your time and can I wish all our witnesses, and indeed all
of our loyal audience, a happy Christmas.
Mr Le Jeune: Same to you, Chairman.
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