The BBC's Investment in Freeview (HC 1065-I) Public Accounts Committee 15 Sep 2004

Evidence given by Mr Dermot Gleeson, Governor and Member of the Audit Committee, Mr Mark Thompson, Director General, Ms Carolyn Fairbairn, Director, Strategy and Ms Caroline Thomson, Director, Policy & Legal, BBC .

Q25 Mr. Gerry Steinberg (City of Durham): It is right, is it not, that 50% of the population have access to digital television?

Mr Thompson: Fifty-three per cent.

Q26 Mr. Gerry Steinberg (City of Durham): That means that nearly 50% do not.

Mr Thompson: Yes.

Q27 Mr. Gerry Steinberg (City of Durham): Yet they are paying for a television licence.

Mr Gleeson: Yes.

Q28 Mr. Gerry Steinberg (City of Durham): What are you going to do about that? Why should somebody pay for a television licence which is subsidising people to get digital TV when they cannot get it?

Mr Gleeson: Essentially we have to operate within a funding environment created by the government. At the time of the licence fee settlement the government, for a number of reasons, rejected the option ---

Q29 Mr. Gerry Steinberg (City of Durham): So it is the government's fault, is it?

Mr Gleeson: No, no. I am just explaining. It rejected the option which was the recommendation of the Davies committee, that digital users pay an additional fee. At the same time the government required the BBC to drive digital take-up by developing its own digital services. Within that framework there is not a great deal which we are able to do currently to address your point. We are in a transitional period.

Q30 Mr. Gerry Steinberg (City of Durham): There are two things which you could do: you could make it a lot easier for people; you could invest more in the service so that everybody could receive the signal, which would be advantageous. Secondly, you could perhaps ensure that everybody gets a free box and then you would get saturation, would you not? Everybody would have the opportunity to have digital television out of their television licence.

Mr Thompson: There are some technical reasons why it is very difficult to improve the signal significantly at the moment. Eighteen months ago the BBC did make some technical changes which significantly boosted coverage to its present 73%.

Q31 Mr. Gerry Steinberg (City of Durham): Can I just go back? When OnDigital was going, I tried to get OnDigital and I could not, because the signal was not strong enough. That was seven years ago and I bought Sky; I was forced to go into the market and buy Sky. You have not really progressed a great deal since then, have you?

Mr Thompson: When the BBC and its partners took over DTT 18 months ago they significantly boosted coverage by changing the signal. A technical advance was made which improved the signal. More broadly, it is worth saying, that only 38% of households had digital two years ago; principally because of Freeview it is now shifting at a rate of 7% of households per year, 53% this year, 60% next year potentially, 67% the year after. We are trying as hard as we can and we are working hard on the issue of free satellite and working hard with others on free satellite. We are doing everything we can to encourage the public to move quickly and to make it possible for them to move quickly and cheaply to digital so we do achieve universal service. In the meantime we are trying to make sure the most expensive programmes we are commissioning for our digital services are also available on BBC1 and BBC2 so licence payers who cannot currently see them on digital can see them on the analogue services.

Q32 Mr. Gerry Steinberg (City of Durham): That is fine, but OnDigital failed, ITV Digital failed, the terrestrial one that is. Why did you go for a terrestrial system? Why did you not go for a satellite system in the first place?

Mr Thompson: We believe and continue to believe that terrestrially transmitted digital television as one of the choices open to the public - and, by the way, this is the government's and I believe all the parties' view as well - is an incredibly important part of the broadcasting mix and in particular for second television and third television households it is the only credible solution for most households in the country.

Q33 Mr. Gerry Steinberg (City of Durham): Why?

Mr Thompson: Because it is a very cheap, very simple technology. You literally plug it in and it works. It does not require complicated new equipment; it does not require a subscription and there is no issue around being pestered by call centres. It is very like buying a television. I have to say that if you read the NAO's report into Freeview, the result of BBC's involvement in digital terrestrial television is that there is now incredibly rapid take-up: well over one million households taking this technology per year.

Q34 Mr. Gerry Steinberg (City of Durham): Yes, because basically they have no option, other than to pay for it through Sky. You are talking about it being the best way to do it, but I would disagree. I have Sky and I can watch one programme and record another and the telephone rings and I can switch the programme on again and continue where I left off and watch Sky. All I have with BBC is terrestrial television which has no new technology about it other than digital.

Mr Thompson: Indeed. DTT may not be for everyone and it does not sound as though it is for you. Particularly for some higher income households it may well be that a pay satellite option with a hard disk recording device may make more sense. I have to say that already you can get a Freeview box with a hard disk, so you can do exactly the same pausing and automatic recording of programmes. That technology is arriving as well. It is worth saying that 53% of people converting to digital television as a whole is an extraordinarily high number; it is much more successful than other countries.

Q35 Mr. Gerry Steinberg (City of Durham): When can everybody who wants to expect to get BBC digital? When can everybody who wants to expect to get that service?

Mr Thompson: Of course ---

Q36 Mr. Gerry Steinberg (City of Durham): When?

Mr Thompson: By the end of the year, when there is a free satellite service from Sky and possibly other free satellite services as well, it should be possible for pretty much every single household in the UK to get digital television.

Q37 Mr. Gerry Steinberg (City of Durham): I am talking about terrestrial.

Mr Thompson: As I explained earlier, digital terrestrial coverage, up to 99.7% of the UK population, will not be possible until switchover and that date is yet to be set by government and the dates we talked about are between 2010 and 2005.

Q38 Mr. Gerry Steinberg (City of Durham): Will the government have to wait until you are ready or will they have a switchover date and people will then not be able to get television at all?

Mr Thompson: The switchover date will be set by government absolutely in consultation with the broadcasters.

Q39 Mr. Gerry Steinberg (City of Durham): When will you be ready? When will you be able to say to say to Blair, because he will still be there in 2012 or whenever it is, "Right, we are ready. One hundred per cent saturation for Freeview"? When will you be able to say it?

Mr Gleeson: Technically - and I might ask Carolyn in a minute to supplement what I am about to say ---

Q40 Mr. Gerry Steinberg (City of Durham): She should know because she was in the Policy Unit when you were discussing this.

Mr Gleeson: Absolutely. Technically it is not possible for us to increase the coverage of our DTT proposition until analogue switch-off. When analogue switch-off takes place, as long as we have had the opportunity - and discussions are taking place with government - to build out in advance the DTT network, from that moment there will be universal terrestrial coverage. For the purposes of clarity, I think it would be helpful if Carolyn explained what the technical constraints which are entirely outside our control are, because it is important that there is no misunderstanding.

Q41 Mr. Gerry Steinberg (City of Durham): All I want is a date. When can I say to my constituents, regardless of whatever ---

Ms Fairbairn: Two thousand and twelve.

Q42 Mr. Gerry Steinberg (City of Durham): That is a long time, is it not?

Mr Gleeson: It is not within our control and I do not want any misunderstanding about that.

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Q69 Mr. Gerry Steinberg (City of Durham): Were there any failures on the list of topics which you gave to the National Audit Office?

Mr Gleeson: Forgive me if I look at my notes.

Q70 Chairman: Could we have the list?

Mr Gleeson: Yes, if you want it. We are not at all clear that our risk management processes could not be significantly improved and it was genuinely the case that we felt that was an area where the NAO might have something useful to contribute. Caroline has just whispered in my ear - which I hope she is allowed to do - that the measures of public service broadcasting is an area where we are far from clear that we have been consistently successful in the past. We are very self-critical in some areas with respect to our discharge of measurement of public service activity.

Mr Burr: We would be hesitant to categorise something as a success or a failure until we had actually examined it. We have not done that.

Mr Gleeson: If you had said anything else, we should have been seriously worried.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.