Select Committee on BBC Charter Review Minutes of Evidence


Examination of Witnesses (Questions 1740 - 1760)

WEDNESDAY 11 JANUARY 2006

Professor Martin Cave and Dr David Cleevely

  Q1740  Lord Peston: I am bit lost by what both of you have said. I am used to economics and the concept of efficiency bears no relationship to economics or what one of our witnesses was talking about at all, as far as I know, but maybe the subject has changed. I am right that you said in reply to Lord Armstrong that the spectrum in some general sense is within the Government's domain. which might also then be interpreted as belonging to the citizens of this country. The Government then would use it for optimum public purposes. Would that be a fair way of putting it? That is what we mean by things being in the public domain.

  Professor Cave: I hesitate to describe it legally in those terms. In effect, it is at the Government's disposal.

  Q1741  Lord Peston: That is right. Normally, what is at the Government's disposal, subject to some distinction, is meant to be allocated for the benefit of the people of this country. That is normal. I used to teach the subject and it is certainly what I used to say.

  Professor Cave: It would certainly be a very respectable objective.

  Q1742  Lord Peston: Therefore, to take an obvious example, if one of the objectives of the general views of what the people of this country wanted would be virtually universal coverage of television, then that would be a perfectly acceptable thing that they would want and they may like spectrum to be allocated to achieve that. I would be right on that, would I not, if that is what they want and if that is what is regarded as in the public interest?

  Professor Cave: The public interest would be in the capacity of the population to receive broadcast programmes, which may or may not be spectrum based.

  Q1743  Lord Peston: But if it were to be spectrum based, that would be one way of doing it. The notion of universal coverage does not imply the notion of universal watching. In other words, if I look at my Radio Times, I want access to everything in the Radio Times, but that does not mean I am going to watch everything. I certainly do not regard the system where most of us do not watch as inefficient, and that is why I regard your use of the word efficient quite as quite erroneous. In other words, it is nothing to do with the idea that if only a few people listen to Radio 3, that is not allocating the resources properly. Surely that is a complete mistake as far as economics is concerned. I think I am right on that. Now, let us go on to the point, and I entirely accept the view that if we place a value on something, that requires people to use it economically. It will also cause them to innovate, we hope, to use it even more economically. That is commonplace. Is not that experience of pricing that it also has all sorts of other effects which may be adverse? Take your view, Martin, of the Ministry of Defence. Can you imagine if we were involved in some military conflict and the Minister of Defence said, "I am sorry we lost that but of course we did an analysis of the cost of acquiring some extra spectrum and we decided not to buy it. It is too bad we lost 100,000 troops because we could not communicate". The notion that you would even introduce that idea into the analysis of defence would be regarded as ridiculous. It does not solve the problem of how you allocate spectrum to them. The answer that we did a cost-benefit calculation and that was our answer would never stand up at all. A government would fall within a minute.

  Professor Cave: Could I interject here because it seems to me that when the Government determines what is the appropriate scale of the defence budget, it is making a balance between costs and risks. It is abridging the nation's capacity to respond because it costs money. It costs money to buy weaponry from the United States. It costs money to employ people to be members of the Armed Services and things of that kind. My view of spectrum pricing is that because it is a resource which has considerable alternative opportunities for use and there are therefore substantial opportunity costs in using spectrum for one purpose rather than another, it is important, if we are operating within a kind of market economy of the kind I have described where you buy defence equipment and you hire soldiers, sailors and people to fly airplanes, that that discipline should apply uniformly to all the inputs which are purchased. Only by that means are you going to get people making appropriate trade-offs between, for example, slightly more expensive American equipment, which uses much less spectrum, and much cheaper American equipment which uses a vast amount of spectrum and which therefore deprives, say, Vodafone or Sky of access to spectrum which it would use to provide a whole range of services to the British people whose interests the Government is quite rightly encouraging.

  Lord Peston: That is not my question. Really what I am trying to get you to focus on, turning it the other way round, is this. Supposing the generals and all the others all say that we need this spectrum. Would not the system work—and Lord Armstrong understands this much better than I do—if the generals were to say, "We have got to have this". Spectrum is priced at such and such and their budget will then be adjusted so that they could buy the thing; in other words, it would not actually economise in the sense in which economist often talk. It is rather like the argument, looking at St Thomas's over there, that if we attach pricing mechanisms to the NHS, which this Government is keen on, it raises the point that there is no point in keeping old people alive; the benefits compared with the costs are just massive. It applies to me as well. If the Government were to take note of pricing mechanisms seriously, it would lead to results that no-one would be willing to accept. Supposing it did lead in this case to the BBC not putting on the kinds of programmes it wanted, could you imagine the Secretary of State saying, "It is too bad. The spectrum has been priced. We need lots more mobile phones. We do not need public sector broadcasting". Is there not a certain naivety amongst us economists when we put this sort of thing forward that we do not seem to understand the real world?

  Q1744  Chairman: We have got back to the BBC now, which is good. How do you reply to that?

  Dr Cleevely: I reply on two counts. Firstly, I apologise for being slightly short in the way that I explained my argument about efficiency. It is simply that if you know there are alternative technical means for providing exactly the same level of service and you know that somebody is then using a resource which they are getting free, and if they did not get it free and it was traded in the market at a reasonable price they would use some alternative method, then that does count for economic efficiency. I hope we are back on sound economic grounds, even if the mathematics earlier was a little bit risky. I think I have to talk about the defence issue for a moment, if we may move away from broadcasting, since I am a non-executive director of the Defence Communications Services Agency, and some of this stuff impinges directly on this. In fact, I was at a main board meeting yesterday. We sit there and we take decisions of exactly the kind that you are talking about. We have to allocate resources and we have to think about how you meet the Treasury guidelines and the Treasury imposes extremely strict views on exactly how much we spend on communications, for example.

  Q1745  Lord Armstrong of Ilminster: Do you allocate frequencies?

  Dr Cleevely: No, some of that is done within other parts of the Ministry of Defence, although Martin recommended that there should be some changes within the Ministry of Defence as to exactly how some of that is done. That will undoubtedly play out before the big stick that I think you were mentioning comes along to beat up the Ministry of Defence at some time round about 2007, but let us not get too much into that. To go to your point, it is extremely important for defence, for example. I see my particular role as a non-executive director as being absolutely to make sure that defence is using resources effectively and, if I dare say so, efficiently. When it comes to things like spectrum, I see that as a major component of the way in which these things work. It is absolutely vital that we start to bring prices to bear on this stuff because otherwise you have no mechanism for working out, in Martin's word, whether you are using the right inputs to produce the desired outcome. That is precisely the problem that we struggle with. I can see your point about losing 100,000 troops. Nobody would ever want to do that if it could possibly be helped. I think we are moving to a situation where we are less likely to do that than more likely.

  Q1746  Baroness Bonham-Carter of Yarnbury: Speaking as someone who has worked in broadcasting rather than as an economist, I am going to ask a straight question, which is: does the Government not need to allocate spectrum to ensure public service broadcasting? By taking money from the broadcasters, from the BBC and from Channel4 et cetera, to pay for spectrum, is that not taking money directly out of programme-making budgets?

  Professor Cave: The overall view of spectrum management, which I have espoused, is that there should be two processes going on. One is a process which relates largely to commercial use of spectrum, and that is a market process. In essence, you create spectrum licences as tradable property and you allow various firms to buy and sell this property in order to achieve a market objective of providing services to homes and customers. That is the first world. There is also a second world in which the Government, quite rightly, allocates spectrum for specified public purposes, of which defence and public service broadcasting are obvious examples. The difficulty arises to some extent in the co-existence of these two worlds. Clearly, the commercial spectrum users will be under commercial pressures to economise on spectrum. There is, however, a concern in some sense that if the public sector spectrum users get it free, they will get too much and we will have an imbalance and consumers will be deprived of the benefits they would otherwise have derived. For that reason, I have proposed the extension of a system that was introduced in 1996 which means that public sector spectrum users actually make some kind of payment. A calculation is made of roughly what the spectrum could have done had it been used for other purposes, and they are charged that as an administrative incentive price as an input into their decisions. I think that has two consequences. Firstly, it makes transparent or more transparent how much public services are actually costing. If the Ministry of Defence, for example, is sitting on £5 billion worth of spectrum, and you would normally expect it to earn a return of 10 per cent on that, that is £0.5 billion pounds of expenditure, so that the defence budget in a sense is more than we first thought. The same of course would apply to the BBC and to Channel 4. It would not apply to ITV and to Channel 5 because they have in some sense been engaged in a competitive process to acquire their licences and that competitive process includes an implicit payment for access to spectrum which gives them the opportunity to broadcast to households. It is really only the BBC and Channel 4 which are involved in this particular discussion about the price of spectrum. That is one reason—transparency. The second reason is that pricing provides signals for broadcasters to make sensible decisions about how to achieve their statutory or other objectives. For example, they may have an objective to ensure that their programmes are available as widely as possible and on as many platforms as possible. Then, having an arrangement by which the platforms are priced to reflect their actual economic cost, including the cost of spectrum, is going to help them make those decisions. Another issue is the question of analogue switch-off. Perhaps I could just say in general terms that this is a transition. It is a margin of discretion which is available to the broadcasting world, including of course its regulators and the Government, and prices of spectrum can play a role in generating sensible, rational and efficient decisions which ultimately benefit consumers.

  Q1747  Baroness Bonham-Carter of Yarnbury: You do not think that that is money that should be being spent on programmes or content?

  Professor Cave: The administrative pricing for spectrum is in respect of things which the Government declares ought to be done: such and such defence capability, such and such public service broadcasting. What I am suggesting is that the Government should allocate the appropriate amount of money to provide the level of defence services or public service broadcasting services to cover all the costs. At the moment, the Government allocates money through its licence to cover the BBC for the cost of hiring its staff, the cost of paying for its transmission, and the cost of buying its electricity, but it does not in fact allocate money for the cost of buying its access to spectrum. What I am suggesting as a general rule is that that should be included as a cost and that there should be an appropriate adjustment to the revenues which the BBC makes in order to cover that cost.

  Q1748  Lord Armstrong of Ilminster: In the case of the BBC, if we were charging for spectrum, it would be up to the BBC to say whether they wish to recover this from an increase in the licence fee or by reducing expenditure on other things. That would be a BBC decision?

  Professor Cave: Or possibly by reducing expenditure on spectrum by identifying more efficient ways in which it can use spectrum in order to achieve those objectives.

  Q1749  Chairman: The difficulty, of course, that we have with the BBC is that if you were to do that, if for the sake of argument you were to have the impact Lady Bonham-Carter was talking about and you reduce the programmes, and I think the fear is that this might take place, the only way that money could realistically be raised in terms of the BBC is by increasing the licence fee, which is already a regressive tax?

  Professor Cave: That is indeed a consequence but, broadly speaking, if the BBC is making a lot of decisions at the margin about the kind of activities which it would undertake based upon the licence fee and if those decisions include margins of spectrum use, then there is a considerable potential pay-back in terms of greater efficiency by focusing their attention on that amount. The second point to make is that we might not be talking about vast sums of money.

  Dr Cleevely: I was going to make precisely that point. We are not talking about huge amounts of money.

  Q1750  Chairman: What do you mean by that?

  Dr Cleevely: If you moved to fully digital on broadcasting, you save something of the order of £225 million a year. I think that the BBC would cut its costs down: the BBC would be paying out something of the order of £20-£30 million a year for that. We are not talking about a huge chunk of their budget. Martin probably knows the figures better than I do. I would not rely on my figures. By the same token, the BBC is taking decisions about how it distributes its content, so it is paying for IP streaming which costs roughly 20 to 30 times the cost per viewing hour of a broadcast transmission. I cannot see the argument, to be frank, for saying that they should stop doing that because they should put the money into programmes or that they should stop, as they are doing at the moment, distributing content over mobile phones because they are taking a decision about how they wish to reach their audience and fulfil their remit. What we are doing here is actually giving the BBC considerably more freedom to be able to do that kind of thing. In the long run, whilst it is nice to think that the Government can somehow decide how people should do things, frankly, it is better if the people decide how these things are done. Obviously you have to internalise some of the externalities of universal coverage and so on; there are roles for regulation there. But we are talking about giving all broadcasters a link to the market so that they can actually start to do things which people prefer. People may prefer in the long run to get what we now regard as broadcasting over completely a different medium.

  Q1751  Lord Maxton: In a sense, that is my point. I am quite ignorant about this. How much spectrum could a five-terrestrial channel use in comparison to, say, a giant satellite? Have you any idea what the figures are? Sky is providing up to 500 channels, you say. Is Sky using a lot more spectrum in the five channels or are the five channels using as much spectrum?

  Professor Cave: Can I try to evade that question by saying that even though there is a physical unit of spectrum, the megahertz, across the whole range of very low frequencies to very high frequencies, the actual economic value of it varies so hugely that it is very difficult to compare quantities of terrestrial transmission which uses spectrum absolutely at the "sweet spot", the most valuable spectrum that there is, with the spectrum that is used by satellite broadcasters, which is way up there and is competing with much less efficient uses. I think the broad answer to your question is that to provide a channel of national coverage by satellite is, in spectrum terms, an awful lot cheaper than it is to provide a channel of coverage by terrestrial means.

  Q1752  Lord Maxton: Perhaps I should not really ask this. Would not it be more efficient and cheaper in spectrum terms to give everybody a satellite dish or a telephone line, an ADSL, rather than going to terrestrial digital?

  Dr Cleevely: You do not know because it is about people's preferences. If you go back to the point about where people live and how they wish to gain access to these kinds of things, you do not necessarily want to be forcing that decision. That decision will be taken by people taking their own individual decisions and the broadcasters using their inputs and producing the outputs accordingly.

  Professor Cave: Statements of that kind have been made but the conclusion seems to be that the cheapest method is to use a combination of all the known technologies, subject to quantification.

  Chairman: I want to move on to the value of spectrum.

  Q1753  Baroness O'Neill of Bengarve: Professor Cave, we have found ourselves meeting a number of claims both about the value of the price of spectrum, and I do not want to get into the more metaphysical things because I can see that you are looking for an array of things, some of which you may say have no value whatsoever. Let us just stick to the price. If it is marketised to a greater degree, then people will pay and your argument is that they will use it more efficiently or they will pay for bits of it and use it more efficiently. The particular case that interests us is the consequence of analogue switch-off. Will that analogue spectrum find purchasers or is that an open question? If it does, what might it be sold for and to whom might it be sold?

  Professor Cave: Can I begin with a modest preamble about the difficulty of answering that particular question? It arises for the following reason—that we have very few actual observations of spectrum trades. We have some slightly aberrant ones which date back to the year 2000 when the 3G licences were sold and we have some rather interesting leasing contracts relating to free-view channels, which give us some idea of the current value in 2006 of access, but the position in terms of scarcity of spectrum across the relevant bit of spectrum we are talking about is likely to change very substantially over the period up to 2012 and thereafter when the analogue switch-off spectrum will be available for other uses for two reasons. Firstly, Ofcom has published plans for very substantial spectrum awards, which it proposes to carry out over the next three years. These include, for example, a very large amount of spectrum in what is known as the 3G expansion band, which can be used for a range of mobile communication and broadcasting services. It also includes a plan to auction spectrum licences in what is called the L-band, which is a band which is particularly suitable for mobile broadcasting. There will be a lot of additional spectrum coming on to the market over the next, say, five years. As far as the demand is concerned, there are various views that you can take. In the course of the report which you referred to earlier, my Lord Chairman, we commissioned some work forecasting the balance between supply and demand of spectrum. It became apparent that there were some states of the world in which very extensive use was made of wireless technologies, for example, for broadband services using technologies such as wi-max and then 4G mobile communications and its successors and also for broadcasting. There were states in the world in which there will be very substantial growth in demand for spectrum and that would obviously have the consequence that any spectrum released would increase in value. I guess the conclusion of this is that any estimate that somebody gives you of the value of spectrum over a period of 20 years after 2012 is going to be subject to a very broad range of doubt. Having said that, I think there is a way in which you can try to unpack the problem. Might I suggest how that might be done? You can think of the value of the spectrum licence as consisting of two components. One is the intrinsic value of the spectrum based upon its capacity to provide services. As I have said, some spectrum is better than others spectrum, just as some land is more fertile than other land. Just simply by making calculations about the extra productivity of particular bits of spectrum, you can produce some kind of estimate of how much spectrum at that level of scarcity would be worth. That is one element of it; it is a kind of scarcity rent. The other element of it is the degree to which ownership of a spectrum licence gives you market power in some downstream market and enables you to get some kind of monopoly profit in the downstream market. By a process of calculation, you can try to figure out what the scarcity value of spectrum is. Then of course you have to take a view about what degree of monopoly power it is going to confer upon the owner of the licence. That is obviously much more conjectural because it depends upon market conditions that prevail at the time. I am just coming to what I hope is the bottom line. If you address the first element of it, then I think for the value of spectrum you are likely to end up as an annual charge with something in the range per MHz of £0.5 million to £1.5 million. If you then gross that up at 112 MHz which are under consideration, that gives you an annual charge of something between £50 million and £150 million. If you capitalise that, which I propose you do very roughly by multiplying by 10, you get a value of something of the order of £0.5 billion to £1.5 billion. I do emphasise that this is based upon our current understanding of technological capabilities, and it is subject to a very wide margin of error. I am not suggesting that it will lie within that range. I would not be at all surprised if it were more or it were less. That provides, in my mind, some kind of general figure.

  Q1754  Baroness O'Neill of Bengarve: So the auction that went on in 2000 is no model for the sell-off of analogue spectrum in this?

  Professor Cave: No. I think that has no value for precedent at all.

  Dr Cleevely: Could I add that having been involved in the original working in setting up the auction of 3G and doing some of the technical economic analysis of 3G networks, (which then led to the idea that we could have five operators and therefore it would be possible to auction) the original estimates for the value were of the order of £3 billion to £10 billion, and the upper end of that was based on precisely what Martin said, which is the market power; that is, you can extract more value further down the chain and that is why that value was in there. The inflated values that were paid of the order of £23 billion were due to particular circumstances prevailing at the time. If we go back to the spectrum that we are talking about, this broadcast spectrum, Martin quite rightly points out that there is a huge range. He also said that it is quite possible that we would lie outside even the large range that he was talking about the £05 million to £1.5 billion. I would like just to give you a couple of other pointers as to why it is as uncertain, if not more uncertain, than Martin has just said. First of all, you actually need some equipment or some technical reasons for wishing to use that spectrum. We are sitting here in 2006; in 2012 we should have some extra available spectrum but if it is only this small group of islands here off the north-west corner of Europe that is doing this, then we are likely to find technical solutions that are relatively high cost and are not necessarily going to be commercially attractive. The second point is that whilst Martin was indicating, and he is right to do so, that generally lower frequencies are of more value than high frequencies, in fact that is not necessarily quite the case because if I have a relatively low frequency, it tends to travel further. Therefore, if you recall, I was talking about the idea of making small cells to make efficient use of the spectrum; the idea that you can do that with lower frequencies starts to become technically more difficult. Then there is the final point that there is a huge momentum building up, as Martin said, for example in the range of the 3G expansion bands, which are in the range of 2.5 GHz plus. These seem to be very high frequency and technically quite difficult, but, because there is so much R&D going into using these things and so much investment in technology going on, those areas start to become rather more valuable. The whole thing could be described as a mess or as us being a long way away from being able to put any reasonable estimates on what this spectrum would actually yield. We will be in for a surprise.

  Baroness O'Neill of Bengarve: I think that is a very full answer because it explains why there is uncertainty about the answers in this area, which has been one of our problems.

  Q1755  Chairman: We could go round this for a long time and not actually come, in the end, to any better position than both of you have just explained. There is uncertainly but I think we take away that £0.5 billion to £1.5 billion. Would you accept that, Dr Cleevely? There is a long pause here.

  Dr Cleevely: I have a great deal of sceptism about the long run, high value of spectrum. That is because I think there are a lot of technical and technological developments coming along which will enable us to do a great deal with very little spectrum at very low cost. Because of that, then spectrum as a substitute will command a relatively low price in the long run, hence my long pause.

  Q1756  Baroness Howe of Idlicote: I have certainly picked up the message that the value of spectrum and so on is changing literally moment to moment. I am just thinking about the public service broadcasting and particularly about the BBC, and I think somebody put a figure on the value of their spectrum as £26-£30 million a year, something around that. Have you any views about how well the BBC and other public service broadcasters use spectrum they currently have? Let us give one example at the present. Are their transmission networks geared to best use and so on?

  Professor Cave: I am afraid I cannot really speak with great authority on the engineering aspects of this. I believe it is generally agreed that, given the constraints of providing near universal coverage in an environment in which there are a lot of obstacles to it in the form of hills and valleys and so forth, we do have a system in which the analogue spectrum is used efficiently and subsequently the same basic structure of 1,180 transmission sites will be used for digital, so I am sure that, subject to that constraint, there will be reasonably efficient technical use of spectrum.

  Q1757  Baroness Howe of Idlicote: Just comparing the BBC and Channel 4 and the other two which have some degree of public service responsibilities, would you say the second group, ITV and Channel 5, are more efficient in the use because they have paid something for it?

  Professor Cave: I do not think I would want to make that claim in relation to the operation of the existing transmission system. Clearly, of course, the actual transmission activity is done not by the broadcasters but by Aqiva or the National Grid Company, which actually does the heavy lifting as far as the engineering aspects of it are concerned.

  Dr Cleevely: Just to intervene on that, I would expect whichever broadcaster to try to minimise their cost anyway, so there are costs associated with transmission sites and things that Martin was talking about, the 1,100 sites and so on, which would reflect in some relatively reasonable use of spectrum. The point is that those other broadcasters cannot trade that spectrum. They cannot say, "I am going to give up a few MHz and get some rent from doing so". They do not have the incentive to be efficient in their use of spectrum. The question cannot be answered. You say they were paid money for it, but it is not linked directly to a decision about the use or non-use of spectrum, so you would not expect them to behave any differently.

  Q1758  Bishop of Manchester: I visited the Australian Broadcasting GDS in Melbourne a few months ago and for a short time dipped into a conversation not unlike the one we have been having this morning, but then I was moved on before I discovered what they were really up to. I gathered that in Australia, and I think in New Zealand, they have been moving towards the price of allocation of spectrum. I wondered if you could clarify the position for us on that, if you do know it, and whether or not the kind of experiences that they have had on this issue are relevant to what we are talking about now.

  Professor Cave: Australia and New Zealand have led the way in introducing market-based methods of spectrum management. However, the broadcasting systems in both countries are controlled by an additional overlay of specifically broadcasting regulation, which has imposed very considerable restrictions upon who can own what broadcasters and the purposes to which they can be put. I think that in practice they have a good framework for spectrum but their broadcasting regulation is as idiosyncratic and restrictive as it is in many other countries.

  Q1759  Bishop of Manchester: So it is not very helpful?

  Professor Cave: I do not think in relation to broadcasting you will find that particularly helpful.

  Dr Cleevely: There is just one small point. Particularly if you take New Zealand, it does not have as many countries surrounding it as, for example, Germany might or the United Kingdom, and so they can afford to experiment a little bit. They a have conducted quite a few experiments in various forms of communications regulation. The only problem that both the Australian and the New Zealand markets have in engaging in this kind of thing is in setting the price because the markets are relatively small. Whilst you do not have the restrictions that we have here, it is then very difficult to set a price, quite apart from the very specific regulations that apply in the case of broadcasting.

  Q1760  Lord Kalms: Would you agree that high definition TV would be one of the obvious manifestations of the benefit of spectrum? Could you amplify a little about the demand for spectrum from the wide number of sources that will want to use this particular facility?

  Professor Cave: HDTV is a very interesting challenge. If very roughly you suppose that moving from analogue to digital reduces the demand for spectrum by about five, going back to HDTV increases it by five, so you end up with similar limitations on the amount of spectrum that you will be able to have. I believe, for example, that if you took the whole of the UHF band that is currently used for analogue and you put digital high definition signals into it you would end up with something like eight channels. That means that a single HDTV channel has an enormous opportunity cost in terms of normal definition channels and all the other things which spectrum could be used for such as mobile broadcasting, and mobile telecommunications. Heaven knows what will be thought up by 2012 when this spectrum comes on the market. My inclination would be to take HDTV as an indication that it is highly desirable to have some kind of spectrum pricing regime which means that, when decisions are made by a public service broadcaster about whether to exhibit HDTV programmes on a terrestrial transmission mechanism or alternatively to put them on a satellite or alternatively to put them on a cable system or on ADSL, you will have some kind of price signal which will encourage it to make sensible decisions. I regard this HDTV decision as one of the key margins in the future where having some kind of spectrum pricing will have a considerably beneficial effect upon rational decision taking within the industry.

  Dr Cleevely: I would absolutely agree. There is one point that we have not mentioned, although it was hinted at by Lord Peston, which was about the geographical split. It is worth thinking about the fact that there are some areas in the country—mid-Wales, for example—where there are relatively few people and you can have quite a free rein with quite a lot of spectrum; whereas in a dense urban area like London it is a rather different matter. Going back to Martin's point about why you might need many different ways of getting this stuff, in an urban area like London the spectrum may be a very high price and therefore it would be a strong incentive to go for cable, for say HDTV. The same thing would not apply in mid-Wales or Scotland. One of the advantages of this kind of mechanism would be, I would hope, that we get better coverage for more people than you would by any other mechanism. I just wanted to make that slightly non-technical point.

  Chairman: It has been a fascinating session. Thank you very much for coming. We are very grateful. Perhaps if, as may be likely, we have some further questions we might write to you and you can come back to us on them. We are enormously grateful for the trouble that you have taken.





 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2006