UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 650-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

CULTURE, MEDIA AND SPORT COMMITTEE

 

 

ANALOGUE SWITCH-OFF

 

 

Tuesday 8 November 2005

MR CHRIS GOODALL, DR ANDREW WHEEN, DR JEREMY KLEIN

and MR DAVID ELSTEIN

 

MS COLETTE BOWE, MS JOCELYN HAY, MS LEEN PETRE

and MR DAVID SINCLAIR

Evidence heard in Public Questions 1 - 92

 

 

USE OF THE TRANSCRIPT

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Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 8 November 2005

Members present

Mr John Whittingdale, in the Chair

Janet Anderson

Mr Nigel Evans

Paul Farrelly

Alan Keen

Rosemary McKenna

Adam Price

Mr Adrian Sanders

Helen Southworth

________________

Memoranda submitted by Chris Goodall, Dr Jeremy Klein and Mentor

 

Examination of Witnesses

 

Witnesses: Mr Chris Goodall, Dr Andrew Wheen, Mentor, Dr Jeremy Klein, Scientific Generics, and Mr David Elstein, Chairman, Sparrowhawk Media, examined

Q1 Chairman: Good morning everybody. This is the first session of our inquiry into the Government's plans to switch off the analogue signal between 2008 and 2012. This is a policy which is clearly going to impact on every household in the land, and the purpose of our inquiry is to shine a search-light into the Government's rationale for carrying out this policy and how it intends to go about it, and perhaps to raise and seek answers to some of the questions which have not yet been addressed sufficiently, certainly in the public domain. Therefore, at our first session, we have invited four different analysts, all of whom have conducted quite a lot of work in this area. I hope that you will guide us as to the kinds of difficult questions which we need to be putting to those who will be appearing at future sessions of this Committee. Can I welcome Chris Goodall, Dr Andrew Wheen from Mentor, Dr Jeremy Klein from Scientific Generics and David Elstein now of Sparrowhawk Media. Can we start off by asking you to say what you think are the main justifications for switching off the analogue television signal and what you see as the difficulties that are going to have to be overcome? Who would like to begin? Chris Goodall, you are first on the list.

Mr Goodall: You ask two questions: first of all, the main benefit to the UK economy and society and, second, the major costs and uncertainties. As far as I can see, the only significant benefit to digital switch-off is that it will give a limited number of extra channels to those people outside the Freeview reception area. There will also be some increment to the television channels available to people in other parts of the country, but every time this issue is examined the number of extra television channels that we are going to get falls. Those are, I think, the only significant benefits to the UK economy and its people. What are the problems? These range from the important to the extremely severe. I will deal with the issues which I think are most important for the UK economy and society; I am sure other people will come up with different ones. To me the most important thing is that for a large fraction of the population, perhaps 20%, digital TV represents nothing of benefit whatsoever - they do not want more television channels - but digital terrestrial is being imposed upon these people, and for many, particularly the old and vulnerable, this will be costly and extremely stressful, indeed the word traumatic is sometimes used. For people in their middle years and lower, the idea of having a digital set-top box in the room is almost second-nature, but for many of the old, who have never used computers and who find electronics very difficult, the imposition of digital terrestrial television is going to be something of no benefit and significant cost. There is one other area I would like to deal with; other people will deal with more. The impact on the UK's electricity consumption from forcing people to buy set-top boxes for every TV and analogue video recorder in their house is significant. There is some debate about exactly how significant, but I have some figures, which I would be happy to give to the Committee's staff afterwards, to justify my view that the cost is somewhere between £500-700 million per year to UK consumers; and the net impact on carbon-dioxide emissions is significant, probably between three and four million tons a year of carbon-dioxide, at a time when we are working very hard to keep within the Kyoto constraints. Those are the things which I would like to identify first as the problems. I would like to come back when other people have finished perhaps.

Dr Wheen: I do not want to say too much on the justification side, because I think we are where we are. I would certainly have some difficulty with a lot of the justifications that have been used. Nonetheless, we are where we are. I prefer to focus on the problems that I see, and in particular the area of programme management, which is certainly a particular expertise of the company I work for. If we look at big programmes in both the public and the private sector, what we find is that they very often deliver late, over run on cost severely and usually do not deliver what was intended in the first place; so on those three key criteria of scope, timescale and cost they seem to fail on an extremely regular basis. We have done some research to try and find out why that might be, and what we have found is that almost invariably they fail for the same reasons. There are ten reasons why programmes fail and fail again. I have listed them in my written submission. To summarise them briefly, they are lack of programme management capability within the organisation, objectives not clearly defined, unrealistic plans that overlook key tasks, absence of meaningful controls, inexperienced people assigned to key activities, limited support from top management (who in this case would be the Government), relentless optimism (particularly with novel technologies), inadequate resources and undisciplined cost management. I am sad to say, those ten reasons keep coming back time and again; whether it is the Passport Office, the Criminal Records Bureau, the Scottish Parliament building, you name it, they are always there. I think it is sad that in our view the analogue switch-off programme maybe going to be one of the first programmes to fail in all ten counts. It is hard to prove it on some of them because a lot of what is being planned is still under wraps and it is difficult to get at what is being planned, but where stuff is in the public domain we have to say that it does not fill us with confidence. This is particularly sad: because if you look at what has happened in the past, particularly under Sir Peter Gershon at the OGC, who did a lot of good work trying to get rigorous programme management methodologies into government programmes, and if you look at what is apparently going on within analogue switch-off, it appears that all that has been thrown to the wind and we are back to the "hope for the best" approach. What I would like to see is a much more rigorous approach to programme management and effectively much better control. The problem with programme management is that sometimes you get programme managers who are little more than reporters. In the analogy we often use of a battlefield, the programme manager is the general who is marshalling his forces, who is making tactical decisions, who is keeping stuff in reserve and throwing forces into the action in pursuit of an agreed strategic objective. Far too often the programme managers we see are little more than war correspondents. They are sitting on the side-lines writing despatches back to base telling them how it is but they are not able to effect what is going on at all. If you look at the remit that SwitchCo, or Digital UK has been given when they launched a few months ago, the three objectives that they stated began as follows: "to coordinate, to communicate, to liaise". These are not words like "to manage, "to control", "to organise" - they are much softer, much weaker words - and what we are very much afraid of is that we have not got a general here, we have got a war correspondent, and we think that will lead to trouble.

Dr Klein: To a large extent I think the public will understand this transition as being inevitable, and therefore the overall transition from analogue to digital is something that people will accept. The problem, I think, comes with the coercion involved in doing it. Our evidence showed that people will want to see a properly made public interest case so that they can see that, even if it incurs costs or other inconvenience to them personally, there is a broader public interest that is served, and it is not totally clear that that public interest case has been made. In terms of difficulties, the only thing I would add to what other people have said would be that the current support arrangements envisaged for disadvantaged and vulnerable people may not be adequate. The track that has been gone down has concentrated on elderly people and people who would have difficulties using the equipment, but the issue of affordability seems to have got lost, and we must not forget, I think, that for some people £25 is a lot of money. That sector of the population seems to have got lost in the deliberations so far.

Mr Elstein: Mr Chairman, I should emphasise that I am here in a personal capacity. Although I chair a number of companies, none of them to has anything to do with this issue, at least not directly. I have been concerned with this issue for a decade, and, having spent 40 years in broadcasting, my concern largely arises from my experience of Channel Five where I was in charge of the only recent vaguely comparable exercise, the video retuning that preceded the launch of Channel Five nine years ago. Andrew's company were the project managers for it, and it is no reflection on Mentor when I say that the project ended up costing three times as much as was originally budgeted, taking three times as long. It was actually very well managed. It was just one of those things where typically you do not foresee all the problems as they arise. I should also emphasise that, compared with analogue switch-off, video retuning was trivial. Nobody was ever going to lose television reception; the company was required by law to anticipate any problems and solve them. The impact of Channel Five signals on videos turned out to be tiny - round about 2% - and all you needed to do to avoid that impact was to have some partly-trained individual with a screwdriver spend ten minutes in your home either retuning your video or installing a blocker. There was nothing to it, but it cost us £165 million and it took us nine months. I would anticipate that analogue switch-off is not ten times more difficult, even though there are ten times more analogue devices involved, it is possibly 100 times more difficult in terms of scope, scale, cost, expertise, impact on the consumer and the potential for disaster. The problem really is that everyone understands the point of digital television, or nearly everyone does, and digital switch-over is a completely natural progress that will happen at the pace that consumers want it to happen or suppliers want it to happen. An analogue switch-off (ASO), as opposed to digital switch-over (DSO), should be a consequence of DSO, not a pre-condition of it. In other words, as digital take-up progresses you will be able to see, as broadcasters and policy-makers, where you can switch off your analogue transmitters and replace them, painlessly for the most part, with digital transmissions. Our problem is that we are committed to a process which is horrendously premature. Ofcom itself predicts that halfway through the analogue switch-off process at least five million homes will still not have a single digital connection; only 40% of TVs and videos will be digitally enabled at that point. It is utterly astonishing. The last time this nation went through a process remotely like this, which was the transfer from 405 line VHF transmissions to 625 line UHF transmissions, it took us 21 years (from 1964 to 1985), it was a fraction of the complexity of this operation, a quarter of the number of TVs, and the video had not been invented. The UHF proposition was overwhelmingly attractive: colour TV for the first time and a third channel (BBC Two), the rental companies were easing the process and TVs did not last very long anyway in those days, roughly seven years. I have got a TV that is 35 years old which is still functioning perfectly well. Most TVs last 15 to 20 years, and most consumers regard their old TVs as important as their new TVs. Even that process, which was remarkably simple by comparison, was never completed. No government would take responsibility for full switch-off of VHF until 1985, and at that point 15,000 homes - not five million homes, 15,000 homes - were dependent on VHF signals. What we are embarking upon is something of immense complexity, fraught with danger and which has no consumer benefit at all, in my view, and where the costs are immense. The lowest estimate I have seen is eight billion pounds. The benefits are tiny in terms of release spectrum value or even nominal consumer benefits and where all the benefits of digital television can be made available through cable or satellite without switching off analogue at all. We could quite legitimately proceed with analogue transmissions alongside the 80 DTT transmitters we already have for as long as consumers derive benefit, and as long as tens of millions of analogue televisions and videos derive benefit - and, by the way, we add five to eight million of those to our national stock every year even now - why are we doing it? There is only one main reason why we are doing it, apart from the fact that the Government finds itself committed, and that is it is of benefit to the terrestrial broadcasters. The terrestrial broadcasters have driven this process from the start and they are the main beneficiaries. Channel Four gives very eloquent reasoning for supporting DTT and ASO. Last week they announced that in five-channel homes they enjoyed a 14% viewing share. In true multi-channel homes - 400-channel homes, Sky, Cable - they enjoyed a 7% viewing share. In Freeview homes, which have very limited capacity (30 channels), they keep an 11% audience share. Freeview, DTT's delivery mechanism is our way of replicating spectrum scarcity in the digital age. The terrestrial channels and their spin-offs retain 90% of all viewing in Freeview homes. That is why they are so committed to the complete roll-out of DTT, even though there is an overwhelming economic case for limiting DTT transmissions to 80 maybe 120 transmitters, not to 1154, which is current government policy. Eleven per cent is a survivable audience share for Channel Four, 7% is not. It is a classic situation cui bono: if you want to know why we are going where we are going look for who benefits, and you do not have to look far.

Q2 Chairman: One of the prime justifications that has been given by the Government for switch-off is to extend the choice for the consumer to the whole population so that almost everybody will have access to Freeview should they choose that particular platform. Do you think that the long-term potential of DTT is secure, or is it arguable that, as technology improves, as applications become more spectrum hungry - I am thinking particularly of HD - in actual fact DTT may prove a temporary phenomenon and that further down the line people may want services which they will have to take from satellite, or cable, or IPTV, but which simply cannot be supplied by DTT.

Mr Elstein: The official reason given in the Government's Green Paper on the Future of the BBC is this: "Twenty-seven per cent of households will be unable to get digital terrestrial services until the analogue terrestrial signal is switched off. We will therefore pursue digital switch-over as the only way to ensure that the benefits of high quality free-to-air television are available to all." Of course, the benefits of high quality free-to-air television are available to all today. You get more choice, more quality from satellite or cable, which all of those 20% of homes can get now, you do not have to switch off anything to deliver it; and, by the way, 20-30% of those homes already have digital television because they are getting it from cable satellite. It is the biggest non sequitur I have ever seen in any government publication. It is an impossible logic. On that basis, even if it cost you £100,000 billion to get the DTT signal to the last person in the most remote part of England, you would do it because that is what you do; you give them a choice of three platforms instead of two. Why? There has to be some cost-benefit analysis behind all of this.

Dr Wheen: I did do an analysis of this a couple of years ago, and one of the things I found was, if you look at the cost per additional user and compared rolling out DTT further or putting them on satellite with some kind of subsidy to take out cost differences, that we were actually about at the break-even point now. It depends on the assumptions you make exactly where the break-even point comes, whether it is the current 80 transmitters or whether it is 120 or something like that, but we are at the start of a very long tail of transmitters. By the time DTT is fully rolled out it will be something like 1100 transmitters, of which we have currently got 80. There is an awfully long tail there, and, as you get further down that tail, there is a very strong law of diminishing returns to the point where, when you get near the end, you are paying well over a thousand pounds per home to put them on this service and yet the cost of putting them on satellite would be a fraction of that; and so I think there is a very good case to be made for using satellite fill-in, at least in some of the more remote areas, rather than rolling out the DTT network literally to replace the analogue network, which is going to be an extremely challenging thing to do. As you say, of course, going forward, Sky for sure will push high definition TV. The DTT platform is already band-width constricted, it will become much more so if it is having to compete with high definition broadcasts on other platforms, and, of course, if you did adopt the approach of using satellite fill-in, it would mean that you could complete analogue switch-over much earlier. The time taken to build all these new transmitters would no longer be a problem, because the satellite is up in the air right now. You could avoid a lot of what I call the big bang switch-overs where one day people are on analogue the next they are on digital. That is what a lot of switch-overs will have to be in this country because there is no other way of doing it - you cannot simulcast - and those will be extremely traumatic experiences, they will go badly wrong in some cases and people will get extremely angry, but you would largely avoid that using satellite fill-in, and so I think there is a very strong case to be made. All this stuff about there being 2% or 3% of people who cannot get satellite, if you look at the studies of where those people are they are mainly people in the cities, they are people sitting behind tower blocks who cannot see the satellite; the people out in the wilds of the country on the whole can.

Dr Klein: I think your question concerned whether DTT was a fill-in technology that would not have a long life. I comment that digital television is not a particularly good medium for interactive use, and I think there is some evidence that people do not look to television for too much interactivity anyway; so I am not sure that the criticism that DTT is not very interactive is a strong one. In terms of the limited availability of channels, when we did our survey a few years ago we found that of the households without digital television two-thirds were happy with the five channels that they had at the time; so I think we have to be cautious about believing that there will be a widespread demand for a very large number of channels. I think those two issues tend to suggest that DTT is not as fragile a proposition as some of the other people have suggested.

Q3 Paul Farrelly: David, I think you mentioned the magic words "cost benefit analysis". In asking this question I am at a complete and utter disadvantage, because I have a DTI statement saying that there are quantifiable benefits in terms of net present value to the UK of between 1.1 to 2.2 billion, but I do not know what they have included in that and what they have excluded. I tend to be sceptical in these things: because if people decide it is a good thing generally, they will throw in anything that will support their case. I just wondered whether the panel generally would care to comment on the figures that have been banded around and what you understand, before we ask for the specific figures from the Department, is in and what is out and how those figures can be supported?

Mr Goodall: The benefits that the DTI/DCMS study identified amounted to about six billion pounds in total of which about half was the benefit to customers not currently covered by DTT of getting extra channels (2.7 million). That amounts to approximately an estimate of £900 per household from getting the incremental channels from DTT, and I have to say that that is completely at variance with all other work that has been done on the value of those channels. The BBC, for example, has valued its own digital channels for the purpose of its licence fee submissions and it has come up with a figure of about £40 a year for those channels. There is, in my view, no clear methodology behind this which would justify the figures, and, as I have said in my note to the Committee, attempts by people from outside to get a better understanding of the justification of these figures have fallen. We have been told that the information is too secret to release and therefore outsiders are unable to gain access to the DTI/DCMS numbers. I would suggest everything else that they have identified is significantly overstated, and I have written one piece of paper, which I am happy to leave behind, which goes into why the individual categories the DTI has identified are major overstatements of the public benefits.

Mr Elstein: I have left with the Committee a little note of where I think all these numbers truly are. Andrew Wheen and Chris Goodall have in their own estimates magically come up with numbers between six and seven billion pounds in costs which curiously do not substantially overlap. When you add the individual costs together, they are getting over the ten billion, and I think they leave out many, many costs which are part and parcel of the whole DTT adventure which have been buried long ago. I give as an example the BBC's digital channels. I do not believe for a moment that any government could have authorised the BBC to spend £300 million a year on digital channels to go on cable and satellite. It was only because they were going to go on to digital terrestrial television that they got authorisation. Indeed, if the BBC had spent on giving away free satellite dishes what they have spent so far on their barely-watched digital channels, we would have 95% first set digital take-up now as opposed to 62%. There is a lot of money being spent for a lot of individual purposes which do not figure in the DTI cost-benefit analysis, and I think a lot of the benefits in the DTI numbers are, as Chris says, heavily exaggerated. There is a very simple issue here. From a consumer point of view analogue television is a terrific benefit. You can get signals virtually anywhere in the country, nearly all your televisions can work with a set-top aerial - the signals are not particularly good sometimes, but they are there - your video recorder functions, you can record one programme while watching another. Post analogue switch-off no video recorder, even with a digital set-top box, will be able to deliver that functionality. Eighty-seven per cent of the population have video recorders, all of which will have substantially reduced functionality as regards ASO, even if they put in a digital upgrade. So from a consumer point of view the negatives are overwhelming; from a public purse point of view the numbers are stunning. Andrew has just taken you through the digital transmission issues. Those extra 900 and something, no, just over a thousand transmitters, if you add up from Andrew's analysis the additional capex and opex, you come to a figure of between £700 and £800 million unnecessary expenditure to deliver a worse quality product to the consumer. I just would not put too much emphasis on the DTI figures. You need to do a completely independent cost-benefit analysis and I suggest you have had two cost-analyses already.

Dr Klein: May I say that calculating the costs to consumers turns out to be a very difficult exercise because of the very blurred dividing line between voluntary expenditures in relation to switch-over and compulsory expenditures. If, for example, I go out and buy a set-top box three years before switch-over is to occur in my region, am I voluntarily buying that set-top box because I want the extra channels or am I being forced to do so in preparation for switch-over? According to where one puts that dividing line, one gets very different answers. The same thing applies to VCRs. We know that VCRs are a dated technology and new technologies are coming in their place; so if I replace my VCR with a digital DVD am I being forced to do so to cater for switch-over, or am I merely making an investment in new technology for myself? In the work we have done this has been quite an issue, trying to draw a sensible dividing line.

Dr Wheen: I cannot add much to what has already been said. It is certainly true that any cost-benefit analysis is likely to come up with the answer they want to come up with, and so it depends on how you treat a whole load of things that are very hard to quantify. One thing I would say is that any benefit analysis that looks at the cost of the release spectrum - I am sorry the value of it, and assumes any significant value is probably wrong. There was a consultation done several years ago, I think by the DTI, if I recall correctly, looking at spectrum planning issues, and one of the responses to that came from Nokia, who basically said, "Please, do not assume that there is another bonanza here in this freed up spectrum. We would not dream of producing equipment for the mobile networks to work in this spectrum because it would be a UK specific; it would not be available across Europe. There is no volume in it for us. We are not interested"; and I think you will find that is still the case. It is very likely that any spectrum that gets freed up will be used to bolster the DTI platform.

Q4 Chairman: This leads me to my supplementary on this, which is: what weight should be attached to statements such as, "We will not be able to release the entire spectrum. That could give us another bonanza à la 3G Mobile", and also what weight should we give to statements such as, "This is the way of the future. If we do not switch over we risk being left behind. We will be Vinyl GB", as it were?

Mr Goodall: There is no other country in the world that is systematically engaged in a system of compulsory switch-over. Every other country has looked at it and said, "No, thank you very much."

Dr Wheen: If you compare it with the bonanza from 3G, you have to bear in mind the market conditions in which that happened, which was at the height of the internet boom when mobile and internet were two very sexy technologies and people thought this was the way to make a small fortune. Nobody thinks that way now. If the same auction occurred today it would raise a fraction of what it raised at that time. Even if the TV spectrum was being sold for mobile use, it would not raise anything like that sum of money.

Dr Klein: I think other countries like Italy and Sweden have announced switch-over programmes, and I think one has to be careful in believing that the analogue network can merely remain as it is. The transmitting equipment will become increasingly expensive to maintain; so I think a decision not to switch over is probably a decision not to have terrestrial broadcasting or television and switching to digital, therefore, is a necessary if one wants to have terrestrial television into the future.

Mr Elstein: As and when somebody manages a national switch-over I will be fascinated and I will take my hat off to them. The issue here is not whether you are going to be left behind. We are already very advanced in terms of digital take-up, partly driven by market forces, private investment, partly driven by the huge public investment that we can put into digital terrestrial television anyway. The issue here is at what point do you inject compulsion into the process? Why do you want to inject it in 2008 rather than 2010 or 2012? What you inevitably do by that intervention is you increase the cost and pain of the process. The longer you wait for the market to take itself along, for people to work out that, "Freeview boxes at thirty-five quid are terrific. I am going to install one on every TV and I am going to give one to my granny", you ease the problem rather than building up resistance to it. I do not agree with Jeremy that terrestrial broadcasting will wither away. At any moment in time, when an analogue transmitter is nearing the end of its useful life, a broadcaster or a group of broadcasters have to take a view, "What do we do? Replace it with an analogue transmitter or work out a way of substituting a digital one?" That is the nature of the process. If you want a national plan, then what you want is a really high-class, high-powered project management team. We do not have that. For the biggest single civil project in the history of this country we do not have that. It is bigger than North Sea Gas conversion, bigger than decimalisation. We have announced that we are going to do it. We have absolutely no mechanism for delivery.

Paul Farrelly: Chairman, I hope we will be asking for the figures behind the cost-plan analysis, and I would hope that, as a regulator, Ofcom might test those figures well in the public interest.

Q5 Adam Price: Dr Wheen, you referred to, I think "trauma" was the word you used, that could flow from a big bang approach to switch-over, and this seems to run slightly counter to the claims the Government are making in relation to its trial exercise in West Wales. In Ferryside and in Llansteffan 99.2% of the respondents there have said they wanted to keep digital television and over 80% did not need any help in actually installing it. Have you had a chance to look at the lessons from the trial, and do you think it was a useful exercise in terms of understanding some of the challenges at a national scale?

Dr Wheen: One of the things I have been saying for the last three year is: "When are we going to run a proper pilot?" Various things are being presented to me as being proper pilots and have then been downgraded, "Oh, well, perhaps it is a technical trial or perhaps it is an experiment", or something like that. There was the "Go Digital" activity up in the Midlands and various other things have been categorised as a pilot, and initially the Ferryside one was also categorised as a pilot but was then rechristened as a technical trial. If you look at what it was testing, it was testing whether it is possible to plug set-top boxes in and receive digital transmission. Did it test people's willingness to go out and buy set-top boxes? No, it did not because they were given them for free. Did it test the effectiveness of marketing messages and whether you could persuade the public do this? No, it did not. If you look at what was going on, it was a completely artificial environment but most of the key issues were not properly tested. People who ran into difficulties got a visit from a technician and, in fact, some of them got a number of visits from technicians, and some of the elderly had great difficulty in getting the hang of this equipment and needed multiple visits to explain what all the little buttons were and why you needed more remote controls and all this kind of stuff. I am sorry, but in real life that is not going to be the way it will be. The key things - the process issues, the marketing communication issues and all the things like that that will really make or break a nationwide programme - were not tested by Ferryside.

Mr Elstein: If you projected the Ferryside expenditure of a household and the length of time taken to convert that household onto the national stage, which, of course, you would never do, it would cost between £25-50 billion and would take 100 years. I do not think there is a huge amount to be learned from Ferryside, other than that it is technically possible, after a lot of heaving, shoving and spending and persuading, to get nearly everyone to agree, "Yes, it is nice to have digital television, particularly as we can now get English language Channel Four and Channel Five which we would could never get before", which applies to, I think, a very small part of the population indeed, no doubt many of them your constituents.

Q6 Adam Price: Indeed; half of them! The Secretary of State said, on the basis of the trial, "This confirms what we suspected of digital television as a product people want." From what you are saying that is a conclusion that you cannot draw from the Ferryside exercise?

Dr Wheen: Yes. I think when you give people digital television, when they gain access to English versions of channels which they previously only got in Welsh and they are English speaking - those types of things - then, of course, people will welcome it, and previous trials have shown the same. The trial in Birmingham showed that when you gave people PDRs to replace their VCRs, they liked them once they got the hang of it. There is nothing surprising about that.

Dr Klein: There is a gradual process of digital technology being taken up by people; so in that sense, if you give them it they find they like it and they want it. The question comes around the compulsion: if you are forced to do something you do not want, do you think it is good value for money? I think that is an open question.

Q7 Rosemary McKenna: Is there any public value in it at all? Is there any point in the Government going ahead with this, because basically you are saying, "This is a pointless exercise. Stop it now"?

Mr Elstein: I do not think that is quite what we are saying. We are saying if you want to plan for analogue switch-off, link it to the process of digital switch-over and digital take-up, plan for it in a cost-effective way and intervene where you need to, not in order to drive particular private agendas. Analogue switch-off is inevitable at some point in time. We do not play 33 rpm records any more; indeed most of us do not play records at all any more; even our CDs are being displaced by our iPods. You have just got to work out what the rhythm of the process is, and you have got to optimise it. Andrew Wheen has pointed out that if you substitute satellite transmission for the vast majority of proposed digital transmitters you are going to save a huge amount of time and money, but if you plan it properly.

Q8 Rosemary McKenna: You are talking about the process, not the fact that we should be doing it. It is the way that it is being done that is causing all of you problems, and you think that you have a better way of doing it?

Dr Klein: I think it depends whether what you do is leave it to a market mechanism or a managed process. The Government started out saying, "We will essentially leave it to the market", and given a timescale for transition which is relatively long but ambitious, the attractiveness of the product and the cooperation of broadcasters will lead to a transition, so the Government, in effect, does not have to do very much to manage the process. It appears that that takes you just so far up to the last 20% of the population having converted one TV in their household. After that it stalls and needs to be managed. Of course, once you get into something that is managed, then people have to be responsible for it and it costs money. I think partly what we are all grappling with is this transition between a market mechanism to a managed mechanism.

Q9 Mr Sanders: The thing that strikes me as odd is what is the rush to do this by 2012?

Mr Goodall: We are saying that there should be no rush, and there is no reason that we can see why that date should be picked rather than, say, 2020.

Dr Wheen: The only possible one may be that there are, I believe, a lot of analogue transmitters that are coming near the end of their useful life and so they will either have to be replaced with analogue or with digital. There may be a factor there, but apart from that and what Chris Smith said quite along time ago, those are the only two reasons I can see.

Mr Elstein: The people who feel pain are the terrestrial broadcasters, because as long as they simulcast in analogue and digital, they are bearing something over £100 million a year in additional cost. That sounds like a lot and in one sector it is a lot, but relative to the total potential cost of premature analogue switch-off, it is trivial; and I would say to my friends in terrestrial broadcasting: "You volunteered for this. It is an investment in keeping your audience share, your revenues, your licence fees, whatever it is you wanted, so do not moan about it. You were granted privileged access to a technology and a transmission system which you do not pay a penny for in terms of spectrum fees, so the fact that you have to pick up the physical transmission costs should not worry you." Incidentally, one of the less recognised aspects of this whole process is that the first wave of digital transmitters are nearly all going to have to be replaced as a result of analogue switch-off because they are the wrong power. Even the 80 that have already been put in at some expense are going to have to be replaced at a cost of, did you estimate, £400 million, something of that sort. You are involved in a gradual process and you have to make a judgment as to at what point you intervene and manage it. Jeremy Klein is entirely correct; you cannot just leave it to the market; you have got to monitor the market and understand what the consumer issues are, but just basically telling people that all your TVs and videos are going to stop working is not what I call management.

Q10 Rosemary McKenna: If you go down that road you say the only people who benefit are the terrestrial broadcasters. Those of us who passionately believe in public service broadcasting will say that is okay, that is fine. They are the ones who benefit because the ultimate beneficiary is the consumer, the people out there who access television, who pay their licence fee, who want to watch television, who get good public service and who actually get access to these services through that. That is the other side of the argument, is it not?

Mr Elstein: I would agree with you that the terrestrial broadcasters, including the BBC (a very important part of our national life), will benefit greatly if there is a larger group of digital households which have DTT than have cable or satellite. What shall we do about that? Do we spend many billions of pounds artificially boosting one of three digital platforms, the one with the least number of channels, the least opportunity for introducing, as the Chairman has pointed out, higher types of technology and the one which inevitably creates barriers to entry which simply do not exist in any other transmission system? Why are we doing this? If we are doing it with open eyes, with a clear purpose, saying we value the terrestrial broadcasters so highly that that we are willing to pick up the tab and the pain and the inconvenience and the consumer revolts and the Daily Mail campaign against it, fine, but at least let us do it with our eyes open.

Q11 Janet Anderson: I wonder if I can press Mr Elstein a bit further on this. You said, David, you see analogue switch-off as inevitable, but in the paper you have given us you conclude by saying, "We have yet to think of a good reason for the virtual imposition of what will either happen naturally or need not happen at all". Are you saying that this need not happen at all, because that is clearly what you say here?

Mr Elstein: No, what I am saying is that it will happen naturally and what you do not need to do is intervene dramatically to make it happen. It is the intervention that need not happen at all, or maybe not happen at all. A lot of technologies change without the Government even realising it.

Q12 Janet Anderson: You are also saying it should be managed?

Mr Elstein: I would prefer it to be managed.

Q13 Janet Anderson: How can you manage something without intervening?

Mr Elstein: You try and get a grip on the process. You try and understand what is involved. I have looked at the kind of work that Chris Goodall and Andrew Wheen and their colleagues have done. It is highly complex project management analysis which is far beyond anything we are doing now. One of the things that is thrown out by good project management is what you do not do as well as what you do do. You do not do certain things that are going to happen of their own accord; you try and find what the critical path is, what the key decisions are, what you do about them. Jeremy Klein and Andrew raised the point about what happens when transmitters reach the end of their natural life? What kind of decision do you make? They are quite difficult decisions. What I am saying is that personally I would be delighted if analogue switch-off happened painlessly. It would be very good for the whole nation. What I can see is a process which is fraught with danger and difficulty and very little recognition of the nature of the danger and the degree of the difficulty.

Q14 Janet Anderson: Do you think it should not happen at all?

Mr Elstein: No, I am quite content for digital switch-over to proceed and analogue switch-off to follow in an orderly fashion as a result. It will happen at some point in time.

Q15 Mr Sanders: I seem to get the message from you that digital television is a good thing but that it does not necessarily have to be delivered through terrestrial broadcasting, and that actually, were the terrestrial broadcasters to invest in satellites, that might be the easiest route to 100% digital coverage eventually?

Mr Goodall: The easiest thing, surely, is to give everybody a satellite dish that does not have access to DTT today, and the customer would be a tiny fraction of the cost of the Government's programme, and it would involve far fewer problems. It could be managed in a way that nobody lost the television service, and I simply cannot see why that is not the logical way forward.

Q16 Chairman: And you would still switch-off the analogue signal?

Mr Goodall: Yes.

Q17 Chairman: It is a different way of achieving analogue switch-off.

Dr Klein: You would not be replacing it with digital terrestrial.

Q18 Chairman: No. Indeed.

Dr Klein: But I think, once you go down the route of deciding to have digital terrestrial, then there is a degree of rush; I think there is a problem with the areas that cannot at the moment, for technical reasons, receive digital terrestrial. I think that is then a problem that has to be managed.

Mr Goodall: The Committee will probably be the only people to look at the experience of Berlin Brandenburg. The analogue terrestrial television signal was turned off in that part of Germany, but it was done so at a time when less than 5% of the population received their television through terrestrial means. That was an infinitely easier process to manage. It was about 150,000 households in total. That is the sort of point where, if you did not go the satellite route, you might decide eventually it would be okay to manage a compulsory switch off. We are a long way from that.

Dr Klein: It is worth, I think, recognising that the pain may not be as great as some people predict. We can think about a situation, a household with three televisions, two VCRs, having to convert and you tot up the cost and it is £500. It appears that if you have got three televisions and if you have got two VCRs, the chances are that you have already converted some of them to digital, and by the time of switch-over you will probably have converted all that you ever want to convert; so the likely cost per household is not generally going to be more than one, perhaps two televisions, perhaps one recording device; there may be some issues with the aerial. I think one should not go down the road of believing that a massive cost is going to be imposed on all households. That is not to say that there might not be difficulties with certain households being able to afford even small investments in equipment, but I do not think we should go down that road.

Q19 Paul Farrelly: Would any government, mindful of national security and the extra terrestriality of satellite and the vulnerability of satellite, wish to rely solely on satellite for the provision of television services? Is that an argument that has been played out at all?

Dr Wheen: I think the vulnerability of satellite is not a good argument, because if you look at the reliability of the service delivered by satellite, it is in most cases better than what the terrestrial network achieve.

Q20 Paul Farrelly: I am thinking of a James Bond scenario?

Dr Wheen: I know, but there is more than one satellite in the sky.

Q21 Paul Farrelly: Where the reds take out the spy in the sky.

Dr Wheen: Sure, but there is more than one satellite in the sky and there is more than one ground station, so there is redundancy built into the system. If you look at what is going on in all the hundreds and hundreds of small repeaters around the country, most of them have no protection against power failures and this kind of thing. They are very vulnerable to a single failure. I think actually, in terms of resilience, the satellite is a better bet. From a rather strategic point of view, there is a question about whether you want to commit yourself to a satellite that belongs to a company based in Luxembourg, but I would point out that your terrestrial towers are operated by companies based in the States and other places. This is an international business.

Mr Goodall: We are not talking about stopping terrestrial broadcasting, we are talking about stopping analogue terrestrial broadcasting.

Q22 Mr Sanders: What are the most important citizen and consumer benefits associated with widening the coverage of digital television?

Mr Elstein: Any particular method of delivery: television or digital terrestrial?

Q23 Mr Sanders: Any. Is it just a choice?

Mr Elstein: You are dealing with a perfectly natural process which, although a significant minority of people in this country are content with four or five channels, might even still be content with two - before the launch of BBC Two they were not asked whether you wanted a third channel, we just did it. The great majority of the population appreciates the additional choice that digital television brings. Digital television gives you significantly more variety of content and substantially more choice, if that is what you want, but the great thing about digital television is it is a voluntary process. Those who want it can get it. The issue that we have to face is at what point do we convert voluntary to compulsory? What is the moment of intervention, what is the rationale for intervention and how do we fund that intervention. We have not even mentioned today the peculiarity of inviting the BBC to use the licence fee to fund the analogue switch-off process, something which as alarmed even people like Greg Dyke as an inappropriate and unwise course of action. I just think we are snatching, and not very effectively, at something which we should not even be worrying about too much for the next two, three, four years. Yes, have a plan, yes, do some pilot studies, yes, do some work, but the notion that in three years time you are going to physically start switching off people, even at that point in time the people in the Borders, 30% or more of them will have no digital connection and 90% of them will have analogue equipment that is dependent on analogue transmissions at that point that they start switching off. It is extraordinary that we are contemplating doing that.

Q24 Mr Sanders: Do you have those figures and do you have them broken down by each region?

Mr Elstein: Does Ofcom have the details per region?

Mr Goodall: It would be possible to calculate.

Mr Elstein: I am sure it is obtainable.

Mr Goodall: I have tried to do it. It is a non-trivial exercise.

Q25 Chairman: As I understand it, the digital UK plan is that they are going to phase the switch-over, therefore they are going to begin by switching off, I think, BBC Two and then subsequent stations. It is not just going to be that one day you are on analogue and the next day you are on digital if you are lucky.

Mr Elstein: Where you can, Chairman. There will be places, as Andrew says, where you cannot where it will be all or nothing.

Dr Wheen: It is as you describe, in the sense that in a lot of the relays that are served by the main transmitters it is not possible to simulcast on those relays, you cannot simultaneously have the analogue and the digital services up at the same time to allow people to switch gradually, so what you have to do is literally one night you turn off BBC Two analogue and you then have technicians running round all the repeater sites switching them over to digital. The hope is that, when they turn on their TVs the following morning, their set-top boxes will work or their aerials will work, none of which they have any chance to test; and this opens up a whole Pandora's Box of problems ranging from fraud, aerial riggers. In Channel Five we had one or two examples where people went around selling what they described at "Channel Five ready aerials" in places where Channel Five was not yet on the air. People shelled out 150 quid, or whatever, for an aerial and then, when Channel Five came on, they discovered it was just an ordinary contract aerial that was no better than any other. That kind of fraud is going to be extremely possible in these areas, and, without active programme management of the sort that we had on Channel Five, there will be very few people around to stop it.

Q26 Chairman: As I understand it, the Ferryside trial showed that 45%, or thereabouts, of aerials were insufficient to be able to receive Freeview with the new boosted signal. In the situation you are describing, those households are not going to know whether or not their aerial is good enough until the signal is switched-on; so potentially 45% of households will have their set-top box, think that they are ready to receive digital and on the big day they are going to press a button and nothing will happen.

Dr Wheen: Correct, and this will all happen in the same region of the country, and, as we know from the roll-out of digital terrestrial, where we, Mentor, were running the thing, we had to ship aerial riggers into areas where we were doing work because we could not rely on the supply of qualified and trained aerial riggers locally. Just imagine what could happen if a whole region suddenly has this problem and all the aerials need replacing simultaneously. It just does not bear thinking about.

Mr Goodall: Some portion of the people in that area will lose television reception entirely, full stop, at the moment of switchover. Nobody knows whether it is going to be a large number, say 5%, or whether it is going to be 0.5% but it is going to be some people and they will not know beforehand.

Q27 Chairman: You are talking about permanently?

Mr Goodall: Yes.

Q28 Chairman: It will not be a question of putting on an expensive aerial?

Mr Goodall: No, they will simply lose television reception. A small number of people in the Ferryside trial lost television reception, full stop. The same thing is likely to happen in Border. In fact the problem is probably going to be worse in Border than it was Ferryside.

Dr Wheen: We found this a lot on Channel Five, that if you get into the more remote parts of the country you find people who are watching very marginal analogue signals with a very grainy picture, and they are getting them by putting television masts up on a local hill, and all kinds of strange arrangements. When you switch to digital it just will not work at all, it is as simple as that.

Q29 Mr Evans: It is Border first, is it not?

Dr Wheen: Yes.

Q30 Mr Evans: Does it mean these are going to be the lambs to the slaughter; these are the ones who are going to really suffer and panic will set in when they see the problems, that people have not got television pictures, and then the Government will back off?

Dr Wheen: It will certainly flush this problem out.

Mr Elstein: It would be more fun to switch off Crystal Palace; then we could all enjoy the process of seeing what happens!

Q31 Mr Evans: It sounds as if it is going to be a cowboy's charter in that particular area if there are huge problems with aerials and other problems even being able to find technicians; I am sure even finding a plumber in that region must be difficult enough. If there is a huge demand to get technicians in then I hope Poland are training them up now, quite frankly!

Mr Elstein: They will be shipped up to Penrith for the purposes of that process.

Mr Goodall: You might also investigate the problems of upgrading aerial systems in multiple dwelling units - blocks of flats. According to the Government's own statistics, there are only 120 people in the UK qualified to do that. They are not working in Penrith today.

Q32 Mr Evans: You can see huge problems as far as that is concerned. This other issue which you have touched on, David, which was that 5-8 million extra units have been added to the stock of non-digital-ready equipment, it is true, is it not, that people are now walking into Dixons and Currys today and buying equipment that simply is not ready for the digital switch-over?

Mr Elstein: That is inevitable, the price differential between a digital TV and analogue TV are so great. People do not worry about analogue switch-off. As we know from the research published last week, a significant proportion of people have never heard of it or, if they have heard of it, do not know what it means or how it will affect them. A substantial majority of all TVs sold today are analogue, not digital.

Mr Goodall: That 90% - the total volume of integrated digital TV sets sold at the moment is about 600,000 a year; compare that to David's figure of 5-8 million analogue sets going into the market.

Q33 Mr Evans: This is an incredible thing, is it not, that people are now going in and buying soon to be obsolete equipment from Dixons and Currys?

Dr Klein: The trouble is that the way to use a market mechanism to get round that is to set a date, so that people know to get digital-ready equipment.

Q34 Mr Evans: We have got the date, so why are people still able to buy all this stuff?

Dr Klein: The move against setting a timetable exacerbates that problem. That is the point. I think you find within a year or so that the majority of equipment in the retailers will be digital.

Q35 Mr Evans: When?

Dr Klein: Within a couple of years.

Q36 Mr Evans: Whose responsibility is this? Is this the industry, or should the Government be saying, "Hold on now", and giving a warning to people that if they are going to buy a TV this Christmas (and I am sure there are a lot of TVs and video recorders sold at Christmas time) surely they should know that this stuff ain't going to be working in a few years?

Mr Elstein: You could not do that without tanking the Dixons' share price. If they were not allowed to sell analogue equipment, what are they going to do? There is not the digital equipment in the stores to sell, and a lot of consumers will resist paying the extra price for a digital-ready piece of equipment. What is the intervention designed to do? Jeremy is quite right, at some point you have to start waving flags at people, but you have also got to see if it is making any difference when you do. Let us see if in a year's time we are at 50% digital TVs rather than analogue TVs. The interesting thing about this is the estimate of the total number of analogue devices in people's homes that are currently functioning is somewhere between 80-100 million. I listened to the then Minister for Broadcasting a few months ago that analogue switch-off for radio was completely out of the question because there are 150 million analogue radios around. By the time our 5-8 million a year adds to the 80-100 million already in stock, and not going into the backyard very quickly, we are going to be at about 140 million analogue devices in total that we are trying to replace, upgrade, throw away or whatever. I am not sure what the difference between 140 and 150 million is in strategic terms, but it sounds to me as if we have just got one mindset that says, "We're embarked, we're en route, we've just got to make the best of it", and one which says, "Hang on a minute, this is all a bit difficult. Are we really sure we want to climb on board this thing?"

Q37 Mr Evans: If you are looking at the cost of all of this - and I know we have had some different estimates, from a small amount of money perhaps depending on what sort of house you have got, if you have got two kids and they have all got portables in their bedrooms which are going to need equipment as well - I do not know what the number of TVs or video recorders are in the average house?

Mr Goodall: 2.4 televisions today in each house.

Mr Elstein: 4.25 in terms of Ferryside, combined TVs and videos. At least we have that number out of Ferryside.

Q38 Mr Evans: So the average price is going to be £500 per house, including if the aerial needs doing as well?

Mr Goodall: That is probably a bit high. The figure I have come up with is something around £300 for the average house.

Mr Elstein: A lot of the problem is that people will not know if the equipment is going to work at the point at which they are expected to buy it, because we are working with a different signal. After analogue switch-off the power is going to be driven much higher and people will get a signal. A lot of people will say, "I don't know that I'm going to need a new aerial until after switch-over so I'll wait until then". With the best will in the world, there is always going to be a problem when you switch off any transmitter or convert it from analogue to digital. Janet is perfectly correct to take me up on this. You cannot just stand away; you have got to have a view as to what you do and when you do it. My big concern is that this is a vast process when you add all the different decisions together, and we need a much, much stronger grip on what we are doing, why we are doing it, when we do it, what we are willing to spend on it and how we deal with the issues that are thrown up by it. We are not anywhere near that at the moment.

Mr Goodall: Digital UK has a budget of £200 million and almost all of that is going into running the advertising campaign. The total amount of money for programme management appears to be less than £3 million a year.

Q39 Mr Evans: These poor guinea pigs now living in Border, when is their switch-off?

Dr Wheen: 2008.

Q40 Mr Evans: So it is less than three years now before they get switched off, and that is when we will know for the first time what the implications are going to be for the rest of the country?

Dr Wheen: Yes. There is one other point to make, which is: yes, we are switching analogue frequencies to digital, so a particular channel that is used for an analogue transmission becomes a digital channel overnight; but one thing you have to remember is that it will not be possible probably to put that digital channel up to full power after the switch-over because there will still be analogue services in adjacent regions which may well be interfered by it. You may well find that people sitting near the edges of the Borders region will one day get DTT but they will not get it until people sitting in southern Scotland and other places have been done as well. This is such a tangled puzzle.

Q41 Mr Sanders: How does that work on the south coast where some communities have problems with cross-channel interference at the moment?

Dr Wheen: There are big issues about international coordination with the French and others, which have not yet been resolved.

Q42 Mr Evans: It sounds like a complete fiasco.

Mr Elstein: Just a severe lack of preparation.

Q43 Mr Evans: Have you all got an agenda here this morning; because what you have come here today with is more fireworks than 5 November, from what I can see?

Mr Elstein: Personally none at all. I am an individual citizen saying what I think, with a certain amount of experience.

Dr Klein: We are a consultancy and we were neither for nor against switch-over. We were attempting to understand what consumers thought/think and look at the usability issues and so on and so forth.

Dr Wheen: Have I got an agenda? Clearly Mentor does manage programmes and would be interested in helping; but, in actual fact, I tried very hard to avoid appearing at this Committee because I felt from a commercial point of view we would probably do more harm than good, but my arm was twisted a bit!

Mr Goodall: No agenda whatsoever. I am just a concerned private citizen. I worked with David on Channel Five re-tuning and, as David says, the problems are 100 times worse.

Q44 Janet Anderson: I have to say I find your evidence today rather depressing; I think it displays some very muddled thinking. It seems to me we have not got a clear idea, first of all, whether you think this process is inevitable or not; but you think if it is going to happen that it should be managed; which is clearly what the Government is trying to do and yet you complain about the Government setting a timetable. Can we just get a clear indication from you about whether you think this should happen; how it should be managed; and is it right to set a timetable?

Dr Wheen: Should it happen? I am fairly agnostic on that point. I tend to favour the satellite approach myself, certainly in the more remote areas, because it is a far cheaper and quicker solution. If the terrestrial approach is the one selected, so be it. Should it be more actively managed: absolutely. The problem at the moment is that we are getting a lot of announcements about dates with no plans to back them up. It is very unclear how this process is going to work at the moment. In fact it has become far more obscure in the last few months since the Digital TV Action Plan, so called because it was not a plan at all. At least that did provide a degree of openness so that those of us with an interest in the subject could actually find out what was going on.

Q45 Janet Anderson: What would you like to see the Government doing that it is not doing now?

Dr Wheen: I would like to see what we would call a "plan of record" being put together; which is a very top level plan involving all the stakeholders. By "the stakeholders" I mean the transmitter operators, the broadcasters, the regulator, the Government and so on, the people who are directly involved. A plan of record is a top level statement of what is intended; what the objectives are; who is going to pay for it; what are the timescales; who is going to manage it and all those sorts of things. Until you have something like that in the public domain, I think everybody has their own idea of what you are really trying to achieve. One of the things that really worry me about this is that it is such a distributed and diffuse arrangement at the moment that we have got on analogue switch-off, and so much of it seems to be done by hoping that people will cooperate and work together. The reality of life is when you have got commercial organisations with shareholders they do not always have the some objectives and things change. When you start getting conflict and disagreement Digital UK is not in a position to bang heads together and say, "This is how it will be". They will have to try and discuss and negotiate, and I cannot see that working.

Q46 Janet Anderson: Who is it you are really concerned about: is it the commercial organisations and shareholders, or is it the consumer?

Dr Wheen: I am actually more concerned about the consumer. I think that the terrestrial broadcasters have probably had more than their fair share of attention up until now. If you look at the committees that have been looking at this issue in the last few years, the broadcasters have been heavily represented on every one; the consumer has been almost completely absent. Certainly from our experience on Channel Five, when essentially what we were doing was with the consumer and not the broadcaster, no, I think the consumer needs a lot more attention than they are getting at the moment.

Mr Goodall: Who is managing this process today? There is actually no single person you can call upon and say, "Tell us how it's going to happen". That is the problem which we all identify is crucial to this. We are sympathetic to the idea that digital television is better for people than analogue. What we are pointing to is that this compulsory switch, without any significant management at all, is simply going to result in disaster.

Q47 Janet Anderson: You are saying it is in the interests of the consumer but you think it should be managed better?

Mr Goodall: Probably that means either spending £10 billion on it, if you want to do it according to the Government's schedule, or taking a longer time over it, planning it more carefully, using satellite rather than terrestrial transmission means and trying to do it probably over a period of ten years. Frankly the evidence is absolutely clear-cut that the UK is not ready to start it in 2008 and it will have to spend a great deal more money than anybody is currently budgeting.

Dr Klein: I am not sure I go along with the depressing views here. I have seen a lot of planning at a technical level, people looking at individual masts and do they need to be strengthened to carry bigger aerials for digital television and so on and so forth; all the stuff to do with neighbouring regions and the TV signals interfering with each other. I am not sure I go along with the impression that has been created that this is a chaotic mess. I think there are issues though around who is driving this, who is doing what and particularly this dividing line between the broadcasters and Government. From the beginning the Government basically said it is for broadcasters to make this happen and the Government's role is to protect the vulnerable in the process. If you go down that track you do have this lack of accountability. I would urge the Committee to look at who is responsible, and really check up that the vulnerable are being protected in the way that Government originally gave its commitment to.

Q48 Alan Keen: We are all getting depressed, so if I can look for something to cheer us up. Going back to the beginning I remember Christ Goodall said, because of the increased uses of electricity, the Kyoto Agreement was going to be wrecked, we are going to have global warming and turn southern England into a desert. It is not quite as bad as that, but could you give us some good news and explain what will be the effect of the extra electricity?

Mr Goodall: In terms of percentages?

Q49 Alan Keen: Yes, and is it inevitable?

Mr Goodall: The problem is, if you have a digital set-top box you can of course turn it off at the wall but it tends to not work properly when you turn it back on again; so you have to keep the box on. The current generation of boxes you have to keep on in standby and it is sitting there, buzzing gently, and radiating about ten watts of heat. It may sound not very much but David gave us figures for the number of sets which are going to have to be converted, and my own figure is about 80 million in 2012 and that is enough to make a significant difference to people's electricity bills and the to the UK's total use of electricity.

Mr Elstein: There is at least a way of solving that, which is that you impose standards either through the EU or domestically which require set-top boxes to be able to power down. It adds maybe £5, £10 or £15 to the cost of each set-top box, so you can quantify the physical cost to the state of doing this. This has happened in the past. In France in the 1980s they forcibly imposed peri-television sockets on all the television manufacturers to ease the pathway to multi-channel television and Canal Plus. It added £10 per TV set but the state imposed it. We could avoid the Kyoto issue but by spending money on better quality equipment.

Q50 Chairman: It would be requiring the consumer to spend more?

Mr Elstein: Yes, requiring the consumer to spend more.

Q51 Chairman: My local Asda has a £29.99 set-top box on sale at the moment - presumably that is the least efficient in terms of energy consumption, and it would cost a lot more if we were to reduce the figure you are quoting for radiation?

Mr Goodall: Another £15 at most.

Q52 Helen Southworth: Have you done a comparison of what the electricity costs would be? When would they get a return on the investment?

Mr Goodall: The average box will cost you £7 a year in electricity.

Q53 Helen Southworth: It will be a couple of years. How long are they going to last?

Mr Goodall: They are built very badly.

Q54 Helen Southworth: More bad news!

Dr Klein: On power consumption we have done some work recently looking at this, and our figures come out much lower than Chris's. When you take into account the transmitters that would be shut down after analogue is switched off then you pretty much come back to the status quo.

Q55 Helen Southworth: You have done the whole cost?

Dr Klein: Yes.

Mr Goodall: That is simply not true. This is the cheapest box on the market; it emits 10 watts and anybody can do the sums. If you buy one of these you are going to add to your electricity consumption.

Q56 Rosemary McKenna: Many, many televisions incorporate this. They do not need a set-top box because it is incorporated in the set and that is going to happen and more and more families are going to move to that over the next few years?

Mr Goodall: The price premium in Dixons for a digital set is very substantial. Nobody in their right minds buys a digital -----

Dr Wheen: I had a look yesterday at two comparable sets - one with digital and one without from the same manufacturer - and there was a difference of £140.

Q57 Mr Evans: Is that a rip-off then? If clearly you can get devices which are cheaper, should not the price difference be closer?

Dr Wheen: That is probably true, but it reflects supply and demand. The other key point is that I have yet to see a portable TV with a digital front-end; and that is where the volume is in the market. Until we fix that we are nowhere. If you look at what they did in the States, they actually mandated that TVs had to have digital front-ends after a certain date. They introduced it in stages depending on the size of the TV. That is the kind of action that would have stopped this.

Q58 Mr Evans: Should we be doing that?

Mr Goodall: You would add approximately one watt to the total power consumption in the television if you do that.

Mr Elstein: I think semi-seriously the DTI has pointed out that, presumably if these set-top boxes are giving out so much heat, actual central heating costs will drop proportionately!

Mr Evans: There is good news!

Paul Farrelly: A very quick observation, which is perhaps one for the next witnesses to take on board: as someone who is waiting for the cost of digital SOR cameras to come down in price before I buy one, I do have a concern that the incentive for equipment manufacturers and retailers to drop prices naturally as technology gets more taken up is not there when you have artificial switch-off dates and, therefore, it may become more costly to the consumer as a result.

Chairman: I began the session by saying I hoped you would give us some difficult questions to ask those who follow you in giving evidence to this Committee - I think you have succeeded in doing that so thank you very much indeed.

Memoranda submitted by Ofcom Consumer Panel, Voice of the Listener & Viewer, RNIB and Help the Aged

Examination of Witnesses

 

Witnesses: Ms Colette Bowe, Ofcom Consumer Panel, Ms Jocelyn Hay, Voice of the Listener & Viewer, Ms Leen Petre, RNIB and Mr David Sinclair, Help the Aged, examined.

Chairman: Good morning; I apologise for keeping you waiting. One of our witnesses in the last session said that one of the things that had been absent so far had been the voice of the consumer in this entire process. I hope this next session will give you a chance to begin to correct that.

Q59 Mr Sanders: In your evidence you have talked a bit about free-to-view satellite being part of the answer, which is what we heard in the earlier session. I wonder if you could talk a little more about your analysis of what is actually happening here and whether, in fact, we are choosing the right platform to move people to digital or not?

Mr Sinclair: We will need to be platform-neutral in any decision you make. The problem with going down the satellite route is what happens to the cable companies. I am sure they would not be particularly happy about that.

Q60 Mr Sanders: You and the listeners have both supported the launch of free-to-air satellite. There must have been a reason why you supported that?

Mr Sinclair: Absolutely. It is vital that consumers have a wide variety of different choices in terms of access. Up until a while ago this was an issue particularly (and will be an issue) around set-top boxes until the point of switch-over - that a significant minority of the population, until BBC2 is switched off, will not be able to access any services. The worry people will have is that you will go overnight, it will be switched off, and if you have got a set-top box will it work or not? At least if you have got a free-to-air satellite alternative that gives consumers another alternative.

Q61 Mr Sanders: But you have got to buy a box, have you not?

Mr Sinclair: The box will come with the free-to-air.

Q62 Mr Sanders: You still need an extra gizmo in order to receive the satellite service?

Mr Sinclair: Yes.

Ms Petre: The Consumer Expert Group has said in its report published in October last year that a free satellite offering was crucial, and a free satellite offering with a guarantee that it would remain free. Speaking for the RNIB and for blind and partially sighted people, in terms of platforms we have no preference for any particular platform, but what we are concerned about is that the offering on each of those platforms should be accessible for blind and partially sighted people, which currently it is not with electronic programme guides, on the screen navigation and so on. We are also concerned that on each of those platforms there should be sufficient offering of the access service that has been developed for blind and partially sighted people - audio description. Those are issues for the RNIB.

Ms Hay: Speaking for Voice of the Listener & Viewer, we strongly support the launch of a free-to-air satellite to provide competition in that market. I think the satellite market is the only market where there is not competition at every level of delivery. As we have heard this morning, a large number of people (I think it is 27.5%) will not be able to receive digital terrestrial signals until after analogue switch-off, and even then only if the transmitters are built out and in many areas it will be uneconomic. There are advantages with digital terrestrial, and I understand one of those is the easier use of portable sets, which is not just for carrying them around but because they are much smaller and many people who live in flats will find it much easier to have a small set than one of the huge widescreen sets that are currently being sold. Terrestrial has some advantages, and it will bring very local television more cheaply than satellite; but in order to have competition, and in order to have 100% coverage of the country then we need both. Voice of the Listener & Viewer strongly recommends a free-to-air satellite service. I think the target for digital terrestrial is only 98.5% anyway, so that is going to leave something like 400,000 households, nearly a million people, who will not have access at all.

Ms Bowe: The Ofcom Consumer Panel has given advice on who are the people who are likely to be most vulnerable in this switch-over, and how can they be supported through it. That advice has been platform-neutral, but I would like to strongly support Jocelyn Hay's last point which is, even if this switch-over is managed, delivered and comes good, there will be quite a substantial number of people who, even on the best executed plan, will not be reached by digital terrestrial television. I do not believe that is a satisfactory outcome for anybody in this country and plainly satellite has got a role to play there. We have got to keep focussed on that 98.5% because 1.5% translates into a lot of people.

Q63 Mr Sanders: What about consumer resistance to digital television and the likelihood that this will persist after switch-over; is that something your organisations have picked up?

Ms Hay: We are conscious of the fact that there will be quite a lot of resistance and it will become increasingly difficult, because the most resistant people will remain until the end. Most of those people who wish to have multiple channel television have already moved. I must say, the previous witnesses were perhaps more technically qualified but I do not think the situation on boxes is quite as dire as they said. We have got an old on-digital box and we can turn it off - we turn it off every night - and it does not interfere with it at all; it works with our existing aerial so we are very lucky and we get very good reception. I think our fear on future boxes is that there is going to be a big divide between the cheapest boxes and the most sophisticated boxes. I think there is a huge danger there that a large swathe of people, particularly the most vulnerable, will be either given or acquire the cheapest boxes which will have very, very limited functionality and they will not be able to take advantage of everything., and also they may have a shorter life.

Q64 Mr Sanders: Can you quantify the likely consumer resistance, any studies done, percentage and likely numbers?

Ms Hay: We have no figures.

Ms Bowe: We are of course independent of Ofcom, but I have seen estimates which suggest that something like around 10% of households might be either reluctant or unable to move. I am sure those numbers could be made available to the Committee. Could I just raise a question about the use of the word "resistance", because that sounds like something that is a very conscious choice where you have said, "I know all about this and, by the way, I'm not going to do it". I think that is going to be quite a rare event. What, in our different ways, we are all worried about on this side of the table is people who actually do not know what this is about possibly. This morning the conversation you had from the earlier witnesses, which everybody in the room found riveting, is probably incomprehensible to practically everybody out in the street, and let us just keep remembering that. Even if you go into a shop, this business that you are going to have a very good conversation with somebody in a shop about, "Do I have digital or do I have analogue", it is not like that, is it? One problem is: what on earth is this? The second problem is: even if you know what it is, what am I supposed to do about it? Again, we are all talking cheerfully about set-top boxes and no doubt our previous friends would know all about Scart leads and things but an awful lot of us do not know about that stuff. The third thing is: even if I do know what I am supposed to do, how am I supposed to do it? Do I go down to the shops, or is somebody going to send me something? Even if I have got this thing, how do I install it? What if it still is not working? We had some slightly disturbing things from the previous witnesses about how this might actually work on day one in the Borders. If people are sitting in their house, maybe even having gone through all of those things, with a blank screen then what do you do then? I am saying this to give it some context - this idea of what does it mean for people. It is not about resistance; it is about maybe any one of those things I have just described, if you are a real person, you could have a problem with.

Q65 Paul Farrelly: Colette, you have just referred to the not so much eye-opening as skull-shattering session we had previously. Could I ask you, as the representative of the Consumer Panel of Ofcom, that when we are talking about Government figures and the cost benefit analysis that will be traded around and bandied around to support what is happening, that you and your Panel can give us an assurance you will be making those figures subject to a rigorous scrutiny; and also that we can expect to see something such as a commentary published by Ofcom in this respect?

Ms Bowe: I am afraid I cannot speak for Ofcom. Although we are the Ofcom Consumer Panel, we are an independent body and we are called the Ofcom Consumer Panel because our statutory job is to advise them. I cannot making undertakings on behalf of Ofcom, but I can give an undertaking that I will go straight out of this room and go back and say what you have just said to Ofcom.

Q66 Paul Farrelly: What abut on behalf of the Panel?

Ms Bowe: I think it is absolutely of the essence that this Committee has access to all the relevant information that Ofcom has got. I think it is not only in your interests, it is in the interests of everybody in the UK. Please understand I am not myself an Ofcom board member.

Mr Sinclair: On the point of resistance, Help the Aged did some work at the Pensioners Parliament, which is a big event held in Blackpool every year where you have members of the National Pensioners' Convention coming. We did a survey there, not very scientific, but you would imagine them to be amongst the most active older people, many ex-trade union type members, but 57% of those who responded saw digital switch-over as a threat and not as an opportunity. Clearly in terms of take-up of the technology by older people, take-up decreases with age. What we certainly have not done is won the hearts and minds yet of the older population about the potential of the technology to deliver vast improvements to their quality of life and tackle real issues of social exclusion, where there is some real potential there. On the satellite point, back in 1948 the Government on a national scale pulled the gas network together, so we had a national gas network. Despite having 30,000 excess winter deaths last year, we are still in the situation of a significant proportion of the UK population not having access to the gas network which would be one of the biggest ways to protect against fuel poverty. The issue around the potential for satellite is that we do not want to go down the route where you have only got one solution. If we cannot do it right for gas over 50 years ----

Q67 Chairman: Can I quickly come back to this 1.5%. It is one thing for the Government to say, "Your analogue set is not going to work, therefore you're going to have to pay maybe £30 for a set-top box"; but it is another thing to say, "Your analogue is not going to work, DTT doesn't reach you so you're going to have to go out and spend £150 on a satellite box and dish". Would it be your view that those people, given they are not a huge number, should be given satellite dishes?

Ms Bowe: Or should be given support to get them. Speaking only for the Panel, we think it is simply not acceptable that people should have television services withdrawn from them in that way. It is an issue which the Government has absolutely got to address. I have lost count of the number of times I have heard the expression "only 1.5" being bandied around. Only 1.5 is 1.5 too many.

Q68 Mr Evans: Do you accept as well that there are some people out there who do not like satellite dishes; they hate to have them on their walls or anywhere?

Ms Bowe: Or might not be allowed to. Where I live in London you are not allowed to have a satellite dish.

Q69 Mr Evans: What happens there then? There may be some people who cannot get cable, will not be able to get the digital terrestrial and then all of a sudden, through planning, cannot have a satellite dish?

Ms Bowe: That is going to be a problem.

Q70 Mr Evans: It may be a sought-after area, you never know!

Ms Hay: That is why I think you need all three technologies - cable, terrestrial and satellite - because there are many places where you have got to have a clear line of sight to the satellite, and that is not available in many cities, and also in the lee of hills and even trees. We have members who have Sky television and if it rains very heavily, for instance, that interferes with the picture, and so do the trees when they come out in leaf. There are problems with all three technologies.

Ms Petre: Could I just go back to the point you were making earlier about people who want to refuse this technology. Just as was said before, I think use of the term "people who choose to refuse this" is slightly dangerous. I would say there are categories in the population for whom there is no serious incentive to go digital. That is the way I would phrase it. When you look at blind and partially sighted people, for example, at the moment the additional narration which helps them to follow television programmes is only offered currently on about 8% of programmes, going up to 10%; and we as the RNIB find that that is not a serious factor to convince blind and partially sighted people to go digital. The other issue for blind and partially sighted people, and also for other disabled people, is that the technology generally is less accessible and more difficult to use. When you have got sight problems it becomes a real challenge to try and navigate your way around digital channels on the televisions screen. There are solutions for that. You can provide electronic programme guidance speech output, but no manufacturer in the world out there has done so, so far. When people with dexterity problems want to go into a shop and find out which remote control is going to be easier to use for them, or whether a set delivers very good quality subtitles, that information is simply not available for people at the moment. As the RNIB we are very supportive of the research the DTI is commissioning, looking specifically at accessibility and usability of this equipment; but there might be more needed to drive this than research about what features are available.

Q71 Rosemary McKenna: Following on from that, do you really think the Government are aware of the scale of the problem of the vulnerable groups that they are going to have to support? They say they are going to target vulnerable groups, and I particularly know about the partially sighted people because I worked with the VIP(?) in Glasgow which is an internet radio service. I suppose in one way, to have it all in one box in the corner for people with mobility and sight difficulty it is going to be wonderful; but the cost of actually helping them to access that set, even after they have purchased the set, do you think the Government really understands just how costly and how difficult that is going to be?

Ms Bowe: There is even a question before that which is: who are we talking about here, before you even do the costs? As you will all know, there is a trial going on at the moment in Bolton about how you might make all this work in terms of adoption. We have been surprised and disappointed to see that that trial, which is being run by the DCMS, is focussed on people who are over 75. That is one important group but, as I think we all know, there are people in our society who may not be over 75 but who may be highly vulnerable in this process for the sorts of reasons I was dilating on to Mr Sanders. In effect you might not have anybody who can give you a hand with this. You might be socially isolated. Most of us around this table, I would imagine, if we have a problem we send for some young person who knows how to do it. A lot of people are isolated and cannot handle this process. Our concern is that there is not sufficient focus going into understanding actually who is going to be vulnerable. Of course, it will be many old people, but not all old people. It will of course be many of the people that Leen Petre is concerned about who have various kinds of disability; but also people who, perhaps because English is not their first language, are isolated from this process. I think there is a prior question, which is: does the Government understand who is going to be vulnerable, and then following on from that? Our concern is that we are not clear who owns that problem. We heard a lot in the previous session about the need for very tight project management in this, which we all endorse, but who owns the problem of identifying who are the vulnerable and figuring out what to do about them? We did a report for the Government nearly a year ago saying, "This is how you figure this out. This is how you do it". Nearly a year later I am still not clear who is going to own that problem.

Mr Sinclair: There is a lack of research in this area. We do not know who are the most vulnerable. We do not even know what the take-up is by race, age, sex or disability at the moment. Coming back to your question, my real concern and my real beef with the DTI/DCMS approach is that they see vulnerable consumers as a problem. They are looking at delivering a technology project which delivers digital TV switch-over but not necessarily one which potentially looks at digital inclusion which looks at what the technology could potentially be doing. They are looking at a process which goes between now and 2008 and 2012 which will deliver switch-off at this point, and switch-off at that point, but not looking at what the potential is in a world where we are reliant upon technology. You have talked a bit about coercion in the earlier session; of course the Government coerces people to do all sorts of things; sometimes we would not like them to; and sometimes it is just because of cost. A good example is that last year the Government coerced most older people into using bank accounts and they are attracting a lot of criticism and concern from older people. Quite rightly there was a need for an exception service to protect the most vulnerable, but actually it makes a lot of sense to have a bank account rather than keep your money under your bed. If you do not have the programme and the coercion to a certain extent there is a real risk, and what we are seeing in the figures is that older people will miss out on the benefits of the technology. We know we have only got one in five older people who have ever used the internet; that is 80% of over-65s who have never used the internet. We have got the DTI pulling employment-related information from printed form into the internet. We have got the BBC moving towards a digital curriculum and away from mainstream provision of education via TV. We have got the Cabinet Office looking at compelling people to use public services via electronic means. Literally the Cabinet Office has talked about "compelling". There is a real risk we will be having this box which has so much potential, and certainly will have a lot more potential in two years' time, when we can stick a broadband wire into the back of this box and all these sorts of things. We could be delivering it in care homes. You could press the red button and at two o'clock on BBC2 you could get chair-based exercises. There is immense potential with the technology and in two years' time the technology will have changed. My overriding concern is this: we are delivering a process which is about switch-over and not about using the technology to tackle exclusion.

Ms Petre: There is this whole issue of the potential of this technology in the future and for that reason it is so crucial to make sure that everyone is included in this. If you are talking about delivering Government services over digital television, like teachers' television or other programmes in the future, it would not be acceptable for anyone to be excluded from those. Another point I would like to make relating to the costs of supporting vulnerable consumers is that I think there is a danger at the moment that cost considerations will inform the decision about who is a vulnerable consumer. We have to turn that logic around again. When you look at the discussions, for example, on whether people over 75 are going to get support or whether they are going to get support for free, those discussions are discussions which are based on financial considerations rather than the real needs of those people. When you look at elderly blind and partially sighted people RNIB research shows that three out of four elderly blind or partially sighted people live on an income that is less than the official poverty line. We need to re-address that balance and make sure that the discussion on who is considered vulnerable is not informed by budget restrictions.

Ms Hay: I think it is also important to recognise that some of the people may not be seen as vulnerable. There are particular groups, as we know, who are especially vulnerable but actually people living in remote and rural areas are also going to be considered as perhaps not vulnerable but they are going to need a huge amount of help; it is not going to be easy for them to get in and out of shops and to get the help and advice that they need. I really do agree with the previous witnesses that the magnitude of the task has not been realised. Almost every person in the country is affected by digital switch-off. As David Elstein said, it is a mammoth task, and I really do not think the resources that are being put into it are adequate in any way. One of the things which concerns us for instance, and in representing listeners and viewers, is that the BBC is being expected to bear the major cost not only of the education campaign (of some of Switchco and now Digital UK; and quite rightly the BBC should be taking the lead both in developing new technology and in assisting and helping and educating people) but it is not right that the licence fee payer should be required to bear the costs of both assisting vulnerable people and paying for their sets. It is an open-ended commitment that nobody has yet actually quantified. We heard varying opinions this morning as to how much that is going to cost. I think it wrong of Government to pass what is a highly desirable, highly necessary social cost onto a section of the population in that way. One of the figures I have seen is that it could actually affect 2.8 million households, which is more than 10% of all households; it is a huge figure. We are very, very concerned as a group representing citizens and consumers that the magnitude of the task of informing people has not yet been recognised and the scale of time in which that has to be achieved if a lot of people are not going to miss out. It is one of the reasons why I agree that the focus on the consumer has actually been inadequate.

Q72 Rosemary McKenna: Can I just say thank you for pointing out the first question. It is absolutely who, rather than how they are going to deal with it. It is not just financial vulnerability; it is physical vulnerability; it is all sorts of vulnerability; remoteness and everything. It seems to me that, as always, a lot of the burden of this is going to fall on the voluntary sector. The voluntary sector is not going to be able to cope with the vastness of the problems of access for vulnerable groups. Obviously you will lobbying very hard with the Government. Is there one thing all of you would say that we could say to the Government to get the message through to the Government on the importance of understanding this, given the timescale that they are proposing?

Ms Bowe: Support the voluntary sector. This is going to work. It is going to work at the grass roots. Who operates at the grass roots, the voluntary sector, broadly defined, including all sorts of things like faith communities; they cannot take on this massive job without some financial support. Support the voluntary sector would be my one message.

Ms Hay: I would agree with that, very much so. Government must recognise that it is going to cost Government and nobody yet knows how much is going to come from the sale of the analogue spectrum. I do think that the possible receipts (I do not know) may have been underestimated in the same way as at the height of the dot.com boom the plus benefits where exaggerated then. There is always an exaggeration in both sides. Government must support. It is people on the ground; and it is that voluntary sector, and a whole range of voluntary organisations, that have that access and that shared ability to help in a practical way. That is why we have suggested and recommended (and I am glad it is going ahead) through the digital stakeholders' group that they should now form a consumer group there to support the work of the ministerial policy group, and to support the work of Digital UK; because it is such an immense job, that every single iota of help will be needed if it is going to be achieved successfully in getting this message across. I was speaking to three intelligent, informed, interested groups who had asked for a speaker about this in Kent earlier this month. I was talking about BBC charter renewal, and I held up these two little leaflets - and I do commend the Government because they put a lot of work into publicising last year's consultation and this year's Green Paper consultation - and not one of over 200 people has seen these, had heard of them or really knew much about charter renewal or the BBC licence fee. It is exactly the same sort of problem that is going to come with digital switch-over. It really brought it home to me.

Q73 Chairman: I chaired a seminar last week where Fordells(?) was speaking. He set out his plans for two leaflets through every single door in England, plus obviously a major advertising campaign which has just started. Is it your view that that is too little, too late, or both?

Ms Hay: I just think it is going to need support. Just an advertising campaign: an astonishing number of people do not read the papers; or, if they do, they gloss over the adverts. These two leaflets were both in our local library - I picked them up because they were surplus - so I am sure they were in most other libraries as well; but people just do not seek things out unless they are told personally that it is something that is going to affect them.

Mr Sinclair: Of course leaflets alone are not going to be the solution for the majority. I have a concern that we have had a couple of leaflets over the last year or so for which we have had comments in; and the comments, as far as I am concerned, have been ignored. We have still got comments on the Scart cables; we have still got some fairly technical explanations in the leaflets. At the same time with the advertising campaign in advance of the launch, the big ads in all the papers, I went to a presentation and was told that every age group had been consulted, 16-64, at which point I just looked at them. I think there is a real lack of consultation and awareness amongst older people. Certainly one of the things I would encourage you to do as a committee in your inquiry is to talk to some older people in your constituencies, or we could organise a group of people to come and talk to you. I think some real people need to be entering into this debate and feeding into it.

Q74 Rosemary McKenna: I was involved with one of the very first, very early groups of getting seniors onto access into the internet and it works like a charm, but the support has to be there. The training has to be there; the support has to be there. They are all silver surfers now and having a great time but unless that support and help is there it will not work. I agree with you.

Ms Petre: I just wanted to add to the message to the Government and also this question about the information that consumers get: is that enough? A second tier of the message to the Government has to be: unless you are going to interfere either through public procurement or through other means, the market is not going to deliver intuitive, usable and accessible equipment. Obviously equipment that is not usable or user-friendly for you and me is going to be even more difficult to operate for disabled people. Just giving people information about levels of usability is not going to resolve that problem.

Q75 Chairman: The Ferryside trial we heard about earlier, successful in some areas, revealed I understand the amount of help that elderly people needed actually exceeded all expectations. I think the figure £2,000 per household as being the cost of technical assistance was quoted. On the one hand you have that trial that has taken place, and then you have the Secretary of State's announcement of the package of help for vulnerable people which relates to those over 75 who are on income support who will get help to convert one set. There seems to be a huge gulf between these two. What is your reaction to the announcement by the Government of their package of help?

Ms Bowe: As we said at the time, Chairman, we were very disappointed by that on a couple of grounds. One is that, frankly, targeting help on over 75s in receipt of pension credit does not seem to us to connect at all with any concept of vulnerability, except possibly low income. The kinds of things we have been talking about this morning, about the sheer difficulty of knowing what you do and how you do it with this technology, are not addressed at all by that announcement. The other reason why we, as a Consumer Panel, felt concerned about that announcement was the linkage with the take-up of pension credit which as we know has been patchy, to put it mildly. We were very disappointed that what is at present a principle that you as Parliament have agreed, which is people over the age of 75 get a free television, seemed to us to be getting somewhat eroded by that approach; because what the Government is proposing is that people will only be helped to, in effect, continue to receive free televisions if they are in receipt of pension credit. That, I have to say, seems to me to be an insidious move away from something which you as Parliament have already agreed. For that reason we found that very disturbing. So two reasons: one that; and one that this does not connect with vulnerability. You asked about the Ferryside trial: yes, it is true that £2,000 per household was the cost of assistance. I do not think in reality any of us are talking about anything like that. Of course Ferryside was doing quite a lot of things as well as addressing the question of how people understand technology. We have done a quite different calculation, where we estimated that the cost of deploying the voluntary sector to help people a) get the kit and b) to sit with them while they figure out how to work it would probably cost something like about £100 per household. That is not a figure drawn from the air. We consulted a number of national charities in working that figure out. That seems to us to be a much more reasonable route to go down. Again, however, I do not see any evidence that the Government has actually picked up on those.

Q76 Mr Evans: That is one television, is it?

Ms Bowe: One television, yes. One television is not quite the point there. This is not the cost of the kit, this is the cost of somebody coming to your house and saying, "This is what you need to do. Let's go to Dixons or Currys and buy it, and then I'll come back next week and we'll see if it's all working okay and talk about various aspects of it".

Q77 Mr Evans: You heard what the experts said about the cost, they seemed to suggest £300 but we have heard other quotes and, indeed, Jocelyn, you have suggested as much as £600 a household?

Ms Hay: Yes, we have, because it will include, also, the cost of a new recorder, for instance, and it could include the cost, very likely, of a new aerial as well as the installation. Of course, people who have got, as we have, a library of video cassettes, then you are going to have to change those too and re-record those. There are quite a lot of related costs, I think, even for a household that only has one television set. It could add up, it will vary, it will vary enormously.

Q78 Mr Evans: You heard what the others said about the cowboy's charter. It seems as if the vulnerable are prayed upon by unscrupulous people who want to make a quick buck.

Ms Hay: Yes.

Ms Bowe: Which is why we think people need somebody from a trusted source, like a local charity, a local faith community, who can come and sit with them while they go through this process. That is where our £100 calculation comes in, it is not the cost of the kit or anything else, it is of mobilising people, giving them a bit of training to do that.

Q79 Mr Evans: The Ferryside experiment was somewhat artificial because the reality has got to be when somebody does have problems they pick up a phone. Who do they phone? Can they get a technician? How much is it going to cost? Is it the aerial? Is it the TV? What do they need?

Ms Bowe: All that.

Q80 Mr Evans: There will be some people who will be completely helpless.

Ms Bowe: Absolutely.

Q81 Mr Evans: Have you managed to put a figure on how many people you think are going to need this heavy help?

Ms Hay: No.

Q82 Mr Evans: David?

Mr Sinclair: The real group of concern for me is the 250,000 older people who are failing to claim the guarantee credit element of the Pension Credit. Government in the last year alone has spent £15 million in promoting Pension Credit. If these people are missing full-page adverts in The Sun then how are we going to be communicating these messages to them when, to be honest, even us, as the voluntary sector, may not be getting through to some of these 250,000 people. I think there is a real worry and a real challenge for people who are potentially very, very isolated. Building on that means testing issue, which is a real concern, means testing a set top box is absurd. It is extending means testing at a time when we are heading towards the Pension Commission and looking at the impact of means testing on savings and adding another element. Is DCMS or Switchco going to have a telephone line and then people have to send in their Pension Credit form so they can access to that? There is a whole range of practical problems. We know some of the problems which exist in terms of Pension Credit generally but there will be real challenges in administering this whole system. It would be a lot simpler and a lot fairer to say "Everyone over the age of 75", for example, if you are judging it on cost. Coming back to the original point, we have not got the research as to who are the most vulnerable, how many they are, how are we going to get through to them, and that is vital. I think a separate point around the Government's support package, what we do not know at the moment, we do not know the nature of what support we will provide in terms of the home help but also we do not know what set top box we will be given. I have got a real worry that people either will be given a voucher for £40 and told to go to their high street store or they will be given a £40 equivalent box. If we are talking about this issue of the potential of the technology, you are not going to be delivering that with a £40 box, you need one potentially which will be delivering television to people who cannot currently access it, things like audio description and things like that, internet access via TV, all these sorts of things, and you are not going to get them through a cheap set top box. I do not see where the debate is. Perhaps we will learn more after the Bolton trial but I think that is a key point what the technology will be, and it is all very vague at the moment.

Ms Hay: It is not just the elderly, there are a lot of younger people who are in dire financial circumstances who are going to need help also. The irony is that the poorer you are, the more you rely on your television for entertainment because you have not got the freedom to buy any other. I think there is a huge swathe of young people who will need help as well. One of our big concerns, we have not mentioned here, it was briefly mentioned in the last session, is those who live in flats or multiple dwellings and that is about a fifth of the population. They are going to encounter, and are encountering already, huge problems. I think there is a big difference between those who signed their tenancy agreements before the 2003 Act. After the Act I think they have more choice in how they can go, they have still got to get co-operation with their fellow dwellers, but before that I think it is up to the landlord to decide what technology they can take, whether it is satellite, cable or whatever. There is a huge amount of work to be done there as well, right across the board.

Ms Petre: I think in terms of vulnerability, it has to be borne in mind, also, that there is vulnerability that is of a financial nature. As David just said, it is very important that those people are not just given a £30 voucher to go and get the cheapest box in their nearest supermarket. The other vulnerability is the vulnerability relating to people's familiarity with technology and their ability to deal with technology. Both those issues really have to be addressed. Some people might fall in one category and not in the other, or some people might fall in both categories. I think it is quite important that Government bears that in mind and keeps that in focus.

Q83 Chairman: You said that the burden is going to fall on the voluntary sector in large part to provide the help and advice that is needed by these groups. Looking at my constituency, and voluntary organisations I know there, they are themselves predominantly made up of relatively elderly people. The kind of people I know who do wonderful work for Age Concern, Help the Aged, and all sorts of voluntary organisations of that kind, will have as little clue about how a scart lead works as the people they are supposed to be advising. Do you envisage that the Government ought to set in train some kind of training course for all these people in voluntary organisations up and down the land so they are in a position to advise their client groups?

Ms Bowe: Yes, that is precisely what we suggested in our report to DCMS ten months ago, Chairman. We are not saying here, yes train people to be technical experts; we are talking about training people to be able to help people go down to the shop, buy their stuff and we are assured that the process of connecting up your set top box does not require you to be a trained engineer. What we are talking about is people who are just that much more able to do this than those who are there to help. As I am rather older than you, Chairman, I feel able to say that not all old people are completely incapable of doing this, some of us might be trainable to be able to help our fellow older people to do this.

Q84 Chairman: I am sure with adequate training it would not be a problem but you say you made this recommendation ten months ago, have you had any response to it?

Ms Bowe: After many months we had a visit from DCMS officials who said that in due course they would be telling us about the results of the trial in Bolton. I have made it very clear to DCMS that the Boston trial's post-evaluation needs to be very public and DCMS needs to be able to satisfy us that it has taken all of these points on board and given them a really good trial in that Bolton trial. I do not feel confident about that at this moment at all, I hope I am wrong but I have no reason to suppose that my confidence should be there.

Q85 Mr Evans: Is there a freephone number now that people can phone?

Ms Bowe: Yes.

Q86 Mr Evans: What assistance do you get? Is it good?

Mr Sinclair: It is exactly the same as the other line except you do not have to pay; probably I should not say that publicly. I think that is a great success in terms of Digital UK's willingness to listen and balancing the need to manage money well. Originally there was going to be an 0870 number, then it was an 0845 and we said it is still not acceptable. It is good that at least they have offered the freephone number. At this stage, as far as I am aware, you get through to an operator eventually but it is fairly automated. It gives you some basic information.

Q87 Mr Evans: It is not press one, press two, press three, is it?

Mr Sinclair: You can get through to it but it is good information, of course, if you happen to speak English and happen to be able to use the phone. At the moment it is not available in other languages. I do not know if they have made provision for text yet.

Q88 Mr Evans: Can they speak to a human being?

Mr Sinclair: Yes, eventually.

Q89 Mr Evans: Eventually?

Mr Sinclair: Yes.

Ms Petre: The type of information you get is of a very general nature. You do not anywhere get any information there about what box do I need if I want good subtitles or if I want audio subscription. That sort of information is not available through that telephone line.

Q90 Mr Evans: It might be useful if you could tell us what deficiencies there are in that system because I think it is going to be important as people wake up to the fact that this is looming, that they themselves are going to have the capacity but also the ability to be able to answer people's genuine questions.

Ms Bowe: Mr Evans, it is Digital UK which has got to be given ownership of this and has to be able to both lead it and manage it. One concern I have got at the moment could be summarised as I do not know who owns this problem. You said at the beginning, Chairman, that you were looking for questions for subsequent witnesses. I think a very pointed question would be who owns this issue of identifying vulnerable consumers and working out what they really want and then delivering it. At the moment there seems to be a plethora of diffuse responsibility.

Q91 Mr Evans: Is it not the Secretary of State who owns it finally?

Ms Bowe: There is Digital UK. What is Digital UK doing in this?

Ms Hay: There are two secretaries of state involved and Digital UK. My understanding is that Digital UK is the project leader but it is the size of the task and that is why, again, we have suggested and supported the idea of involving the voluntary sector because that is a resource that is there and can be mobilised. In some cases, providing people can be trained to understand the technology, and I am sure a lot of older people can, then in some ways they are more reassuring, less threatening, if you like more familiar, because they can deal with that kind of problem. I think it is Digital UK but I really do not think anyone has yet grasped the magnitude of the task that is facing them or the cost that will accrue if it is to be carried out successfully because it does take money to train people.

Mr Sinclair: On the cost point, the issue in terms of Digital UK needs money is they need serious money - and it came from earlier sessions - in order to do the job well. We should not be deciding policy based upon how many millions the Chancellor can afford or BBC can afford to put into a pot, it should be on what skirt. I have some slight concerns around relying upon the voluntary sector and certainly seeing us as a cheap option; full cost recovery is essential. We are already taking calls, producing information sheets, every time we have a new government initiative our telephone and information staff have to be trained up on the new issue. We do not get any state funding for any of this, any support, and actually I have some concern about us being expected to be a delivery arm of government unless government is going to be funding us to do so. There is a strong role for volunteers, there is a strong role for working with industry as volunteers will be a vital part of delivering peer to peer advice particularly.

Q92 Alan Keen: I do not think I have ever had a body of witnesses in front of me who every time I get to the point - and it has happened a hundred times of thinking - the answer comes out before I can even say. Never mind Digital UK, I would put you four in charge of it and give you Digital UK's money. The words have not been used - I am not asking a question, you have given all the answers - whether people are isolated by geography or loneliness in a big city, it is not the percentage of people who are going to be affected to their detriment by this, it is the fact that for those people who are going to be affected - there was a very famous football manager, Bill Shankley, who when confronted by "football isn't life or death, is it?", he said "no, it is much more important than that" - TV really is their life. I have known people myself, television is their life and they have nothing else other than TV. I would be very confident if you four were looking after those people on behalf of government. We could not do better, Chairman.

Ms Hay: I am sure you are right there, it is a fact, it is absolutely central to those people's lives in a way that it is not to any of us. They have not got the excitement of getting out or the ability to get out. Another point that has not been looked at today is what they want is a reliable signal and that is another danger with digital. We do support digital because we see the benefits in the end but there are problems and one of these, again, is there is a variation in the standard, for instance, between the BBC, which has a higher standard of delivery signal which is 16 QAM as opposed to Ofcom which has allowed the commercial sector to go to 64, which is not so robust and it will not reach as many people. Again, the analogy that I have heard is if they allow too many services to go on the single frequency, for instance, for commercial reasons they can push more services in, then if you are watching the snooker match, you see absolutely everything clearly except the ball because it is going too quickly and it gets lost. There is a problem in the technology as well here which needs to be looked at and addressed and somebody needs to take a decision as to what that standard should be because it both affects the reach of the signals and in the higher standard, for instance, the signals will go further so the reach is further as well as the quality of the picture. What viewers want is a reliable signal that they can see. They have been promised better quality pictures and sound, they need to get that, but in order to get that the technology has to deliver. Also, the other problem with digital is that you get it or you do not get it, the digital cliff, as they say, you fall off. Unlike now, when people will put up with almost any kind of reception if they want to hear or see the programme, you will not have that option with digital, you either get it or you do not get it. These are additional technical problems which need to be decided, someone needs to take a decision on them so that at least there is a common standard and some inter-operability between technologies too.

Ms Petre: I think from the RIB point of view, there is a real opportunity with digital television if we get it right. If we get digital television to deliver more audio description so that people can enjoy more programmes, if we get digital television to deliver some government services into people's homes that they might otherwise not have such easy access to, if we manage to ensure that digital television stays a reliable source of information and entertainment for a lot of people who find it difficult to get out of their house, if we manage to make sure that digital television is easy to navigate and use for elderly and disabled people, if we get all of these things right then digital television can be a real improvement on the analogue services that people have at the moment. We have to tick all of those boxes, we cannot miss out on any of those.

Chairman: Can I thank you all very much for coming. You have raised a number of serious concerns. We will put those to subsequent witnesses and try to get the answers. Thank you.