House of Lords - Digital switchover of television and radio in the United Kingdom

Digital switchover of television and radio in the United Kingdom - Communications Committee Contents

CHAPTER 2: What is digital switchover in television and radio?

8. In this chapter we consider the differences between analogue and digital broadcasting for both radio and television. For each, we outline the advent of digital broadcasting and trace the point reached today. We then look at Government policy and progress on television switchover and Government plans for digital radio switchover. The move to digital radio is variously described as switchover, migration and upgrade. We have used the word switchover in this report. When we refer specifically to the Government's radio switchover programme, we have used its full name, Digital Radio Upgrade, or Upgrade.

WHAT IS THE DIFFERENCE BETWEEN ANALOGUE AND DIGITAL BROADCASTING?

9. Both digital and analogue television and radio broadcasts are transmitted using the part of the electromagnetic spectrum (radio spectrum). Analogue broadcasting transmits sound and pictures as a continuously varying signal, while digital broadcasting first encodes them into a series of binary digits (zeroes and ones). This means a digital broadcast can be 'compressed' by computer processing, so it uses less space in the spectrum than an equivalent analogue broadcast. In the case of television, up to eight digital television channels, as well as radio and text-based services, can be carried in the space occupied by one analogue television channel. In the case of radio, for example, up to ten or eleven national radio services, using the Digital Audio Broadcasting (DAB) system, can be carried in the space required for one national analogue network. The space freed up on the spectrum by switching from analogue to digital television broadcasting is in demand for other services, but the space freed up by digital radio broadcasting has limited current economic value for services other than radio.

10. Digital television signals can be broadcast by terrestrial transmitters, by satellites or via cable. A set-top box or integrated digital television must be used to decode the signal. Digital radio signals are broadcast, in the UK, using the DAB system, and digital radio is also available via digital television and the internet.

11. Digital broadcasting offers the following potential benefits to consumers:

· A greater choice of services

· Extra information on programmes and interactive features

· Easier tuning and new functions

· Less interference to pictures or sound

ANALOGUE TO DIGITAL BROADCASTING FOR TELEVISION

12. Analogue television broadcasting started in the UK in 1936. From one channel, the BBC, it expanded gradually to five by 1997. Analogue cable and satellite broadcasting began to compete with the terrestrial channels during the 1980s, but commercial digital television only started with Sky's digital satellite service, launched in October 1998. Later that year, the first digital terrestrial television service, ONdigital (later ITV Digital, which closed in 2002), was launched. All terrestrial television channels are now transmitted digitally and the only channels which are transmitted in parallel in analogue form are those of the public service broadcasters (PSBs)—BBC One, BBC Two, ITV1, Channel 4, and Five. The PSB channels which are received by 98.5 per cent of the population will be switched off in their analogue form by the end of 2012.

13. There are currently three main ways of receiving digital television in the UK, Digital Terrestrial Television (DTT), satellite and cable (the latter two are mainly subscription-only services):

· DTT, broadcast by transmitter masts and received via the same aerial used for analogue signals. The main DTT service is Freeview, launched in 2002 and owned by BBC, ITV, Channel 4, BSkyB and Arqiva (the monopoly transmitter operator). It provides around 40 channels which are free to view after purchasing a set-top box or Freeview-enabled television. DTT services are broadcast on six[1] national multiplexes. Some pay channels are also available via DTT.

· Satellite, transmitted from space and received through a satellite dish. The main satellite television service is Sky's subscription service. In May 2008, BBC and ITV launched a free to view digital satellite service called Freesat, which offers a slightly larger range of channels to Freeview and does not require a subscription. BSkyB also offers a similar service.

· Cable, transmitted by a wire directly to the television. The main cable operator in the UK is Virgin Media which offers a subscription service.

· Additionally the internet can be used to receive digital television but the viewing figures are not available for this.

14. Figure 1 shows the take-up of television in the UK via DTT, satellite and cable. The proportion of homes using DTT stood at just over 70 per cent.

FIGURE 1

Platform take-up in the UK Q3 2009

Source: Derived from Ofcom—The Communications Market Digital Progress Report, December 2009

ANALOGUE TO DIGITAL BROADCASTING FOR RADIO

15. Radio services in the UK were launched by the BBC in 1922, broadcasting on AM (also known as Medium Wave and Long Wave). In 1955, the BBC launched FM (sometimes known as VHF) services, which offered much better sound quality but required listeners to buy new radio sets to listen to FM. The BBC broadcast all services on both FM and AM, as did commercial radio from its launch in 1973. By the 1980s, the majority of listening was on FM. AM (particularly Long Wave) services, however, remained important for services such as storm warnings, the shipping forecast and emergency communication. This is because transmissions on Long Wave frequencies have a greater range than transmissions using the frequencies on which FM and DAB services operate.

16. In the late 1980s, both commercial radio and the BBC began to offer different services on AM and FM, so that listeners needed sets with AM and FM reception if they wanted to receive the full range of services broadcast in the UK.

17. The BBC began broadcasting its existing analogue radio services in digital format in 1995, but the first radio services developed specifically for digital transmission were in the commercial sector. The Broadcasting Act 1996 allowed for licensing of commercial digital multiplexes through a tender process. It provided an incentive for digital broadcasting by offering a 12 year extension of national and local commercial analogue radio licences for services that were simulcast in digital. In return for security of tenure, almost all stations decided to opt for simulcasting, despite the extra cost of transmission without additional revenue.

18. National digital services are carried on two multiplexes. The first national commercial radio multiplex was awarded in 1998 to Digital One, the only bidder. By August 2000, Digital One was carrying ten national digital radio stations. In 2002, the BBC launched its digital only channels, Radio 5 Live Sports Extra, 6 Music, 1 Xtra, BBC 7 and the Asian Network[2]. It currently uses its own separate national digital multiplex to broadcast these services, the five networks—Radio 1, 2, 3, 4 and 5 Live, and the World Service, all of which are also available in analogue.

THE DECISION TO SWITCH OFF ANALOGUE TELEVISION

19. Ofcom identified three key drivers behind the Government's decision to switch from analogue to digital television were (p 37):

· To benefit the consumer by extending digital terrestrial coverage to match analogue coverage: Prior to the start of switchover, around 27 per cent of the population had no access to DTT and the substantially higher number of channels that it offered, and this was a source of considerable consumer dissatisfaction. After switchover, 98.5 per cent of households, matching existing analogue coverage, will have the option of receiving between 15 and 40 television channels[3], which will be broadcast from all 1,154 transmitter sites. 90 per cent of the population (served by 80 of these sites), will receive around 40 channels.

· To benefit the UK economy through the more efficient use of spectrum: The opportunity to release valuable space (about one third of the total analogue space) on the spectrum which could be sold for other sought-after services such as mobile communications services, and satellite links[4].

· The analogue television system was designed over 50 years ago and needed updating.

20. In addition, the Government expects that switching over from analogue to digital broadcasting will benefit UK public service broadcasters as a result of their costs being lowered by no longer having to transmit services in both analogue and digital[5]. Overall, we believe the case for digital switchover for television was convincing both for the consumer and the British economy.

21. In 2005, the Government's cost benefit analysis of digital television switchover estimated that the likely cost to the UK economy of £4.6bn, would be outweighed by benefits of about £6.3bn[6]. This cost benefit analysis, based on conservative assumptions, foresaw spectrum benefits of £1.7bn. In 2009 Ofcom estimated that reuse of the spectrum alone would realise economic benefits of £5bn to £12bn[7]. These estimates therefore suggest that the benefits of television switchover will considerably exceed costs.

22. The costs of switchover will be met by the public service broadcasters (BBC, ITV, Channel 4, Five, Teletext, S4C) through funding the upgrade of the transmission network (£0.8bn); and by consumers, who will shoulder most of the cost, as they need to acquire and install digital receiving equipment (estimated at around £3.8bn).[8]

THE GOVERNMENT'S PLANNING PROCESS FOR SWITCHOVER FROM ANALOGUE TO DIGITAL TELEVISION

23. In 1999, the Government set out two criteria to be satisfied before analogue television switch-off[9]. These were:

· Everyone who could get the main public service broadcasting channels in analogue form (BBC 1 and 2, ITV, Channel 4/S4C, Channel 5 and Teletext) would be able to receive them on digital systems;

· Switching to digital would be an affordable option for the vast majority of people.

24. In 2001, the Government formed the UK Digital TV Project to advise on whether to proceed with switchover and also how and when. In September 2005, the Government committed to replace analogue television with fully digital television in the UK—this programme is known as digital switchover[10]. The digital switchover programme involves the new digital transmission network being put in place and the analogue signal switched off, region by region, in a phased programme from 2008 until the end of 2012[11].

FIGURE 2

Television switchover programme by region: 2008-2012

Source: Digital UK

THE GOVERNMENT'S PLANS FOR DIGITAL RADIO

25. In June 2009, the Government set out its plans[12] for Digital Radio Upgrade, covering the choice of DAB as the UK's dedicated digital standard for broadcast radio[13], a structure of services on digital and FM, and a target date and criteria for the Upgrade to go ahead.

26. The Government has set two criteria which, when met, would make possible the announcement of a date for Digital Radio Upgrade. Implementation would be at least two years after the announcement. The two criteria are:

· When 50 per cent of radio listening is to digital sources; and

· When national DAB coverage is comparable to FM coverage, and large local DAB coverage reaches 90 per cent of the population and all major roads[14].

27. The Government's intention is that these criteria "should be met by the end of 2013"[15], paving the way for delivery of the Digital Radio Upgrade programme by the end of 2015[16]. There will not be a complete switch off of analogue radio services. The Government envisage that following the Upgrade:

· All national and large local services will be carried on DAB multiplexes only and will no longer be broadcast on analogue; but

· Ultra-local radio services, consisting of small commercial stations and community stations will continue to broadcast on FM.

28. This means that radio services currently on Medium Wave will move to DAB or, if they are ultra-local, move to FM. The Government envisages that these changes would create three tiers of radio services:

· A national tier, broadcast in digital, via the BBC's and commercial radios national multiplexes;

· A regional/large-local tier broadcast in digital, via the regional and local multiplexes run by commercial radio, also carrying BBC's local and nations' services;

· An ultra-local/community radio tier, broadcast on FM,

It has not yet been decided which local services will be included in the second or third tier of radio services. The Government has said that "... there is no simple answer and the decision of individual licensees is likely to be driven largely by the relative economics of broadcasting to their audiences on DAB and FM"[17]. Some estimates suggest that over 120 commercial stations are likely to remain on the third tier—the FM network (p 77).

29. The Digital Economy Bill, introduced into the House of Lords on 20 November 2009, proposes a number of changes to the existing legislative and regulatory framework which would enable the Digital Radio Upgrade to go ahead[18]. While the Bill does not set a date for digital switchover of the specified services, it gives the Secretary of State the power to nominate the date (or dates). The Bill also provides Ofcom with additional powers to ensure an orderly migration from analogue to digital. These powers cover matters such as renewal and termination of licences, variations in the coverage of multiplex licences and sharing of premises and costs between analogue stations.

1 In late 2009, one of these multiplexes was cleared to be used for forthcoming high-definition television services. Back

2 The BBC's strategy review of March 2010 proposes closing down 6 Music and Asian Network (see Chapter 5). Back

3 As well as offering many more channels than analogue, all digital television platforms offer differing levels of interactivity, for example, the option to watch a number of sporting events at the same time, or obtain more information on a programme using the red button on a remote control. Some digital platforms also offer the potential for viewers to catch-up with television programmes that they would like to watch after the programme has been broadcast (known as on-demand). Back

4 Economic impact of the use of radio spectrum in the UK, November 2006, Ofcom Back

5 Cost benefit analysis of Digital Switchover, DTI and DCMS, 2005 Back

6 Ibid Back

7 Digital dividend: Clearing the 800 MHz band, Ofcom, 30 June 2009 Back

8 The Digital Switchover programme-programme structure. Ofcom 2007 Back

9 Digital Television Action Plan, October 2004 Back

10 In May 2005, the European Commission also issued a communication stating that the Commission expected all member states to be ready to switch off analogue television by 2012. Back

11 The UK's entire network of 1,154 terrestrial television transmitter sites needs to be converted to digital, so that near universal coverage of digital television can be provided. This requires major and complex engineering work to convert each of the transmitters, and therefore the work is being done as a phased regional switchover rather than a single UK-wide switchover date. When a region has switched over to digital, its analogue signals will be switched off. Back

12 Digital Britain, June 2009, p 91-103 Back