ITV executive chairman Michael Grade has offered the Government a compromise solution in the campaign for spectrum to be reserved for high-definition broadcasts on digital terrestrial television (DTT). Grade told a Royal Television Society breakfast meeting, attended by culture secretary Tessa Jowell, that the UK's public service broadcasters would be willing to help "drive the transition to a more efficient transmission standard on DTT" if the Government loaned them "a little over a multiplex of capacity".
"In due course, once HD compatible boxes are sufficiently widespread, we will give the loaned spectrum back and it can be auctioned. Even if you did this Ofcom would still be able to auction nearly two thirds of the released spectrum now which would give plenty of space for successful bidders to develop mobile TV, wi-fi and so on."
Grade told Jowell that if she took this approach, and "made less spectrum available to the market in the next couple of years", the Government would not necessarily "take a big financial hit in terms of auction proceeds".
"If there is little demand for the spectrum then little would be lost through reserving some of it for the PSBs. By contrast, although I admit it is difficult to model with any certainty, my rudimentary understanding of economics suggests that if there is significant demand for the spectrum, and some supply is taken out, the price of the spectrum which remains in the auction should rise, possibly substantially."
Ofcom is currently considering responses to a consultation on its digital dividend review, having announced in December that it favoured an auction of the entire spectrum due to be liberated by switchover on the grounds that the regulator was not best placed "to decide which services should get access to spectrum". Last month Ofcom CEO Ed Richards said the regulator would conduct more research into viewers' expectations of HDTV before reaching a final conclusion.
In his RTS speech Grade said Freeview had done "more than anything else to bring equal access to the benefits of digital multichannel television in the UK". "But just as one digital divide is closing another is potentially opening up as high-definition television begins to take hold worldwide.
"Last year nearly 2.4m HDTVs were sold in the UK, five times as many as in 2005. The market research analysts GFK predict that by the end of 2010 80% of households will have an HDTV. In practice the whole market is at the point of tipping to HD. At the same time of course, consumers are continuing to buy into DTT in large numbers too and it is already the UK's largest TV platform.
"The warning lights for policy makers should be flashing red. Recent independent market research for Freeview shows that most Freeview users buying HDTVs expect to get HD television services via, Freeview in the future and they expect Freeview to keep up with technological advances. The trouble is that in due course these people are likely to be bitterly disappointed."
Grade said if the Government did not act, and reserve capacity for HD on Freeview, then there was a "danger of the DTT platform becoming a sort of welfare TV platform, confined for ever to the technology of the 20th century".
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