Examination of Witnesses (Questions 540-559)
DCMS, DTI
10 JANUARY 2006
Q540 Alan Keen: Critics of the BBC
licence fee use the fact that it is a regressive tax and that
people who have lots of money pay the same as people who have
not got much money. Is this a good opportunity, especially with
the review of the licence fee, to put some of the onus on the
BBC out of the licence fee to help fund the less well-off people
who are less able, as Alun has highlighted, and to give the
responsibility to the BBC to use some of this licence fee for
this? Should that be taken account of in the review of the licence
fee?
James Purnell: I think that is
right, yes, and we are going to look at that as part of the licence
fee negotiations. At the moment there is about a quarter of the
country that is not receiving the BBC's extra channels even though
they are paying for them through the licence fee and by using
some of the licence fee to make people able to get those channels,
that will be helping them from the point of view of equity, and
will also be helping people who are over 75, people with severe
disabilities and people on income benefits to get access to digital
TV. I think both those things are a progressive use of the licence
fee. They fit in very well with the BBC's purpose in terms of
building a digital Britain and I think you are right, it will
help to address some of those issues.
Alun Michael: I think there is
an issue in promoting people to switch over to digital too far
in advance in the sense that what we do know is that at the point
where you have the analogue switch-off you can increase the signal
and at that point the 27% that I referred to earlier who would
otherwise have to upgrade their aerials will not have to upgrade
their aerials and therefore will not have that cost. What we are
trying to create is an understanding of the advantages of digital
and the fact that people will have those advantages more easily
accessible after the date of analogue switch-off, and really it
is the promotion by broadcasters and by the industry of the
advantages of digital rather than the Government as big brother
saying "we want you to go in advance of the date".
Q541 Alan Keen: On the same theme
really, another concern I have got is that where we are going
to have the most problems will be in blocks of flats in cities
rather than people living in houses. Certainly up to this point—and
I think cable companies have had their own financial difficulties—they
could be doing more to make sure that blocks of flats are equipped
for digital TV. Most of them are just analogue and they will need
some money spent on them to upgrade their systems. I think if
that is left too long it is going to cause more problems. Have
you got plans to hurry these people along?
James Purnell: That is the important
point and again if the Committee made recommendations on that
we would look at them seriously, but also the cable industry would
be right to look at this seriously.
Alun Michael: It is also the case,
is it not, that some flat dwellers who are in a digital transmission
area at the moment and cannot receive a signal may well be able
to once the signal is boosted? So that does have implications
for flatted accommodation as well.
Q542 Alan Keen: Finally, Chairman,
I have been giving support to Paul Farrelly's concerns about aerial
companies and I can give a report of my own situation. I have
got two separate Sky sets where I live but also I have got a Freeview
box, and this is the final solution to it. Paul, you are absolutely
right, the first company, whom I was recommended by the supplier
of the TV equipment, wanted nearly £300 for doing this and
in the end I got it done for just over £100. It was very,
very simple and straightforward but the first company really made
a meal of it. Paul has been absolutely right to keep pushing this.
I would be very happy if you would say that you will review your
policy.
James Purnell: Yes.
Chairman: We may have a separate section
of our report eventually on the individual consumer experience!
Paul Farrelly: I am very glad we have
got a conclusion to that because we were left on tenterhooks before
Christmas because on the first appointment the installer said
to Alan, "You have got an awfully big chimney there, sir."
You have still got your chimney in place, Alan?
Alan Keen: Yes.
Q543 Paul Farrelly: And the tree
is okay, it has not had to come down? Fantastic, so we are no
longer on tenterhooks.
Alun Michael: It is a very touchy-feely
Committee, is it not!
Q544 Paul Farrelly: One of the biggest
issues that we have also concentrated on, principally for self-preservation
because if things go wrong it is our postbags and then your postbags
times 600 plus that feel the effects, is the transition period
between switching off BBC Two and then the loss of the whole analogue
signal. In Germany the regulators were very pleased with the way
it has gone in Berlin and they had six months and there were not
riots in the streets. The broadcasters, on the other hand, if
they had their time again, would have opted for a much shorter
time, mainly it seemed because of the costs that they were having
to bear on dual transmission so it was six months in Germany and
one month here; is one month long enough?
James Purnell: That is obviously
something that Digital UK and the broadcasters and the experts,
who are the people who provide key advice on this, keep under
review and it is perfectly possible for us to look at longer periods
in some areas and shorter periods in others. As you say, there
are different views on this but the danger of going for too long
a period is that people then do not have a sufficient sense of
urgency and you end up with a rush at the end of the six-month
period. That is clearly an operational issue which Digital UK
will want to keep under review.
Q545 Paul Farrelly: I do not want
to be unkind to the BBC but if BBC Two is switched off some people
might not notice!
James Purnell: I think that is
where the Digital UK campaign is—
Q546 Paul Farrelly: —Alun,
you wanted to say something.
Alun Michael: Just the point that
there was no digital terrestrial television at all in Germany
so they were starting from a nil base whereas we have got quite
extensive coverage already. I think whereas you would be absolutely
right to suggest that we look at experiences from elsewhere and
learn from them, they may not be directly comparable, and of course
there is a lot of discussion going on particularly between the
regulators in different countries in which Ofcom is involved,
as a part of making sure we do learn those lessons.
Q547 Paul Farrelly: I think we have
asked for some evidence from our support staff in Italy which
is the next country in line. I do not know what period they have
asked for but Barry Cox, the Chairman of Digital UK, did come
here and say that the DCMS would have liked the period to have
been longer. What period would you have liked ideally?
James Purnell: I think this is
just part of ordinary discussions and different numbers being
kicked around and that is something which is kept under review.
I think from memory we were discussing with them whether a six-week
period was appropriate. Again it depends on what type of area
you are looking at. In places which are very rural and spread
out where it is further for people to get to the shops there may
be a case for a longer time period compared with places where
there are lots of people in a town centre. This is not something
where we are theologically tied to any particular date but is
to be based on our research and based on the pilots, obviously
including the Bolton pilot.
Q548 Paul Farrelly: So there is a
possibility in the Border region if one month is not long enough,
because that is a small area with a population of guinea pigs
in a sense, there is the possibility that this might be fine-tuned
to increase the period?
Alun Michael: And even well before
then, the Bolton trial and our other research. I just want to
pick up the phrase of "guinea pigs". I think it is also
worth looking at it from the point of view that these are pioneers.
If you talk to MPs and to people in those regions which have had
severe deindustrialisation this is a real economic opportunity
for them. We are planning to have a seminar soon with the industry
and with experts to see how Border can exploit that opportunity.
The alternative would be for them to go last. We are getting more
people now starting to complain about those regions that are going
last as to why are they not going to be able to have access to
this in the same timetable as earlier people.
Q549 Paul Farrelly: Minister, I stand
politically corrected. I will use the term "pioneers"
from now on! So there will be contingency plans in place with
differing periods should it turn out to be too short and too broadcaster-driven
as a one-month period?
Alun Michael: Yes, I think the
whole point is that we want to give maximum certainty so we do
not want to say we have not got a clue about the timescale because
we think that the timescales that have been talked about have
taken account of industry needs and broadcasters' needs and consumers'
needs, but we recognise that it is not an exact science, that
there are a lot of complex issues and therefore we remain willing
to learn both from the pilots and, in terms of the later regions,
from the earlier regions. That may well confirm that all the discussion
has been worthwhile and that we have got it right or it may mean
that we have got some fine-tuning. As James says, we are keeping
an open mind.
Q550 Paul Farrelly: The perception
of a broadcaster interest in having as short a period as possible
also raises the issue as to whether Digital UK is too broadcaster-dominated.
What would you say to that?
James Purnell: I think it is not
appropriate to say that. If anything, if there are any tensions
or difficulties the broadcasters are accountable through their
licences, so for the commercial broadcasters to Ofcom, for the
BBC to Ministers. The Digital UK Board also includes representatives
of the supply chains, the transmission networks, and the working
groups include a wide range of stakeholders, everything from housing
to groups representing the disabled, consumers, the whole
range of stakeholders are represented.
Q551 Mr Hall: James, is it fair to
say that when the policy was first devised for analogue switchover
that it was consumer-driven?
James Purnell: It was—?
Q552 Mr Hall: It was consumer-driven.
The clients were the people that the Government had in mind in
providing a better service for?
James Purnell: I think it is both
industry and consumer-driven.
Q553 Mr Hall: Because there is a
view that there is a switchover in government policy from being
consumer-driven to industry-driven. Is that a fair criticism?
James Purnell: I do not think
so. I do not know on what basis that is said.
Q554 Mr Hall: There is not going
to be a consumer switch-off and an industry switch-on?
James Purnell: No, I do not think
so. There has always been a clear industry lobby for this policy.
Consumer groups have also been involved all the way through. The
response of consumer groups is not that this should not happen
at all. If there is a criticism it is that a package for the vulnerable
should be more extensive rather than less. So I think the consumer
and industry go very much hand-in-hand.
Alun Michael: I think as well
what we have is a better understanding of the mutual interests
of broadcasters and consumers and a variety of different industries.
I would commend a look at the graph that I referred to earlier
which was supplied to the Committee because what that shows is
that if you go back to 2000 the figures were quite different to
what they are now. The growth of digital terrestrial has been
enormous over that period of time, so that is many people taking
decisions based on choice well in advance of any question of analogue
switch-off. So I think that we can be a bit more confident about
the choice that consumers are making and the way in which this
policy will meet the increasing requirements of consumers than
perhaps would be suggested by the question.
Q555 Mr Hall: Sure, but the consumer
really does not have any choice at all because it is compulsory.
If they do not buy a set-top box and we get to switch-over where
is the choice? This is compulsion rather than choice.
Alun Michael: No, there is a variety
of different choices for the consumers. They can go to digital
cable, in many cases there is pay digital.
Q556 Mr Hall: But they will have
no choice about change because they will not be able to just rely
on terrestrial television because that is going to be switched
off.
Alun Michael: They will not be
able to continue on analogue, no, but in fact a larger number
of people will receive a high-quality service.
Q557 Mr Hall: I am not disputing
that.
James Purnell: That is exactly
right. A quarter of the country at the moment cannot get digital
terrestrial and they are being prevented from getting, for many
of them, the service which they would prefer. The other point,
just to go back to what David Elstein and others said, switchover
will happen at some point and the question is therefore how we
help people, including those who are more vulnerable, to make
the switch and giving help to up to five million people I think
is the right way of answering that concern. We could say that
some of this is difficult so we should not do it, but what we
would be consigning people to would be to be bundled off the analogue
signal in five or 10 years' time without the proper preparation.
I think that would be a real dereliction of duty.
Q558 Mr Hall: Is it fair to say that
the policy is being guided by the cheapest option?
James Purnell: I think that is
a good point. Clearly one of the bedrocks of the policy is making
sure that people have available to them the most basic cheapest
option in their area and for a large part of the country that
would be DTT. It is also something which has got a plug in and
play which is easy for people to fit. However, we are not doing
that at the exclusion of the other services. There is a technology
neutral/platform neutral policy which will give people advice
on all of the technologies available to them. In those areas where
DTT is not the cheapest option then we will make the cheapest
option there available to them (probably satellite) so in those
places where people cannot get access to DTT our package for the
vulnerable will enable people to get access to satellite TV, or
if there is another technology that has come about by then which
is the cheapest we will go for that one. Even within that if people
want to opt for a more sophisticated technology than whatever
the cheapest one is in their area, we will give them the ability
to do that, so if there is somebody in your constituency who is
78 but wants to get access to satellite or broadband TV service
we will give them the equivalent monetary value of whatever the
cheapest would have been, probably DTT, and they can put that
towards the cost of buying the more sophisticated system.
Q559 Mr Hall: So what people are
describing as "economically weak" households where they
will get some government support, they can use that to invest
in a more expensive approach?
James Purnell: Yes.
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