House of Commons - Public Accounts - Twenty-Eighth Report

Select Committee on Public Accounts Twenty-Eighth Report

3 Protecting consumers

16. When analogue signals are switched off, only televisions which have been converted to digital or replaced with integrated digital sets will display broadcast signals. To ensure that consumers are aware of this and understand what to do for switchover, the government ring-fenced £200 million as part of the 2007-08 to 2012-13 licence fee settlement to allow the BBC to fund a public information campaign run by Digital UK.[16]

17. The Departments are relying on voluntary labelling by retailers, principally through the use of a 'Digital Tick' scheme. This scheme, which was introduced in September 2004, uses a certification mark to help consumers identify television products and services that are designed to work through switchover. However, research in November 2007 showed that only half the retail staff in the two thirds of stores using the Digital Tick were able to explain to consumers what the logo meant. Digital UK have now put actions in place to increase understanding among retailers, and the Departments felt that the Digital Tick scheme would have an increasingly important role to play in switchover.[17]

18. In the first half of 2007, some 1.8 million analogue televisions were sold, accounting for 45% of all television sales. While 73% of televisions sold in December 2007 were digital sets, more than a quarter of television sales were still analogue sets. Analogue tuners in these sets will not work after switchover, even if the sets themselves are converted to digital by the addition of a set top box. With switchover due to start later this year, and new televisions having an average replacement cycle of around seven years, a significant number of televisions on the market therefore have built-in obsolescence. The Departments agreed with the Committee that this was not satisfactory.[18]

19. The Departments did not know whether the millions of consumers who in recent years had bought, and were continuing to buy, analogue televisions had been told that they will need to purchase additional equipment to enable them to receive television broadcasts after switchover. Neither did they know whether retailers had, for several years, been deliberately selling analogue television equipment which would become obsolete before the end of its useful life. They told us that in their view, Digital UK, working with Trading Standards departments and Consumer Direct, would be responsible for any investigation into this.[19]

20. The Departments confirmed that there was nothing to stop retailers from continuing to sell analogue sets right up to the point of switchover. When asked why they had not banned the sale of analogue televisions as the French had done, the Departments explained that a Government consultation in 2001 had previously identified little support for this option amongst the general public. The Departments' lawyers were also not confident that such an approach would be legal under European Commission law and were therefore concerned that it could be challenged in the courts.[20]

21. The Departments have estimated that the total cost to consumers of converting to digital television will be £3.8 billion, and the consumer benefits will total £5.1 billion. The Departments' estimate of the benefit is based on their valuation of additional consumer choice and extending the availability of digital terrestrial television from 80% to 98.5% of households. Although there are inherent uncertainties in this type of valuation, the fact that 85% of households have digital services on their main televisions clearly demonstrates that large numbers of consumers value digital services. However, 3.75 million analogue homes and 26 million analogue televisions remain unconverted, and millions of people will therefore face the cost of converting to digital if they do not want to lose access to broadcast services on some or all of their televisions.[21]

22. The Departments pointed out that consumers can convert their analogue televisions to digital by purchasing a set top box for £20 to £30. However, they also told us that around 10% of homes may need to upgrade their television aerial to receive terrestrial signals, which would add £60 to £180 to the cost. Those households that need to upgrade aerials could have to pay up to £200 to continue receiving even existing services, in digital form, in the year when they switch.[22]

23. Digital UK has set targets for the BBC-funded public information campaign to achieve 100% consumer awareness of switchover in each region 12 months before it happens. For those consumers who want to convert to digital, it has set targets of 95% conversion of main television sets four weeks after the completion of switchover and 100% conversion of second sets after six months. The conversion of second sets is not a Departmental policy objective.[23]

24. Awareness of switchover among some groups, particularly minority ethnic and non-English speakers, is below the national average. The Departments noted that the level of conversion to digital television among these groups exceeded the level of awareness, but said that Digital UK was reviewing the effectiveness of its communications and, for example, was placing adverts through channels which targeted ethnic groups.[24]



© Parliamentary copyright 2008	Prepared 26 June 2008