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Switching to Digital Television
UK Public Policy and the Market
By Michael Starks Intellect Ltd
Copyright © 2007 Michael Starks
All rights reserved.
ISBN: 978-1-84150-988-4
CHAPTER 1
Public Policy and the Market
On Saturday 15th June 1996 the Queen presided over the Trooping the Colour ceremony on Horse Guards Parade, as she did every year. Massed ranks of guards paraded in front of her, perfectly executing their well-rehearsed drill. As usual the pageant was televised, the camera direction as carefully choreographed as the parade itself. But this year there was a difference. The Queen was also presiding over the world's first simultaneous analogue and digital terrestrial widescreen television broadcast.
There were in fact two sets of cameras and two sets of receivers. The BBC's normal television cameras fed back conventionally shaped TV pictures for normal transmission to the millions of normal analogue TV sets in households all over the country. Alongside, a set of widescreen cameras fed back a separate stream of pictures which were processed for digital terrestrial transmission.
The digital widescreen pictures and sound could be received only on two prototype digital receivers, the size of large refrigerators, specially built by research engineers to handle this emerging new technology. One was in the BBC's broadcasting centre in Newcastle, the other was in the BBC's White City centre in London.
In front of the London receiver was a small group of BBC executives and technology experts, headed by the Managing Director of BBC Television, Will Wyatt, whom I had invited to come to work in their weekend clothes for this historic occasion. We were not disappointed. The new technology performed, both for us and for our colleagues in Newcastle. This first 'live' trial was a success.
In the short term all we had to do then was to launch it for real. In the longer term we had to persuade the millions of analogue viewers to switch to watching what for the moment were still 'refrigerators'.
Switching to digital TV
In simple terms digital television involves coding and then compressing the television signal. The benefits of digital transmission are increased robustness, resulting in technical quality improvements, and increased capacity, giving the option of many more programme services.
By 1996 digital coding and compression were in use in the United States and elsewhere for satellite and cable television transmission and, in the UK and elsewhere, for digital audio broadcasting. Digital terrestrial television involved applying the same technology to the more traditional transmission from hilltop masts to rooftop aerials, and thence to digital receivers.
Two years later, in 1998, digital television was formally launched in the UK, with both digital terrestrial and digital satellite broadcasts. Digital cable in the UK began the following year. Offering a panoply of new services, digital TV swiftly began to transform the whole television industry. It gave an immediate boost to the take-up of multi-channel pay TV. It created new relationships between broadcasters and receiver manufacturers, underpinning the marketing of set-top boxes. Its picture format encouraged the growth of widescreen TV sets. It introduced interactive features and services. It further segmented audiences, which in turn affected funding and competitive relationships among broadcasters. It necessitated changes to the statutory and regulatory framework. It gave further impetus to the technology convergence between the broadcasting, telecommunications and computer industries.
Moreover, it gave politicians a new industrial ambition. On 18th September 2003, the Secretary of State for Culture, Media and Sport, Tessa Jowell, was sitting frustratedly in a traffic jam when she was due to give a speech at the Royal Television Society's biennial industry Convention in Cambridge. In her absence her speech had to be read by her deputy, Lord McIntosh. So it fell to him to tell the assembled company of media executives that the Government had definitely decided to switch off the UK's traditional analogue terrestrial TV services and replace them fully with digital television. By 2003 digital television had penetrated around half the households in the UK, most of which had added satellite, terrestrial or cable set-top boxes to conventional analogue TV sets. It now became firm public policy to persuade, and in the last resort to compel, the other half of the population to make the same switch.
The proposed switchover timing – on a regionally phased basis between 2008 and 2012 – was included in the Labour Party's May 2005 election manifesto. On 15th September 2005, with Labour's election victory behind her, Tessa Jowell addressed the next Convention of the Royal Television Society, winningly confessing that she had come to Cambridge a couple of days early to be sure of arriving on time, and announced the detailed switchover timetable, region by region, starting with the (England and Scotland) Border region in 2008.
Although the substitution of digital for analogue television had been envisaged at the outset, this was a significant public policy decision. Its most tangible public policy benefit would be to enable digital terrestrial television to achieve comparable coverage to analogue and allow hitherto under-served parts of the country to receive additional terrestrial TV services. The longer-term goal was to save spectrum at the point of analogue switch-off and re-use it for new services yet to be devised.
The political difficulty was that every household wishing to continue to watch television after analogue switch-off would have to acquire a digital set-top box (as a converter) or a new digital TV set – and that would include a minority, the size of which would not be trivial, who would not otherwise have done so and might well resent the cost and trouble.
Moreover, the consumer implications of this decision extended well beyond a requirement to adapt the main TV set. Switching off analogue transmission would affect all the additional analogue TV sets in the home and the capabilities of analogue video cassette recorders. In some cases new aerials would be required. Communal systems, whether in blocks of flats, hotels, schools or prisons, would all require conversion. Demand for new equipment and for installation services would have sharp peaks, in different parts of the country at different times, distorting normal commercial logistics. The costs of the compulsory element of switchover would be large in total and uneven in their incidence. For the UK – as for other countries pursuing parallel policies – digital switchover was therefore fraught with political, technical and commercial risks.
Analogies tend to be partial. Digital switchover is different from the switch to the 625 line system and colour television in the 1960s and 1970s: in that case, retention of the old 405 line technology was not a barrier to the spread of the new and the timetable for completing the process could therefore be gentle. It differs from the national programme to install North Sea Gas in every household in the late 1960s because that job was done by a central body which supplied and installed the consumer equipment without charge. It is not like the replacement of leaded petrol with unleaded, which has been gradual, without a prominent switching date. The campaign to prepare all computer systems for the Year 2000 (Y2K), with a common date and an onus on every system owner to take remedial action, perhaps provides a closer analogy. However, in that case the switching date was set by the calendar and was not a matter for political decision.
So no analogy is exact. As a public policy challenge, the switchover from analogue to digital television is sui generis – difficult to get right, easy to get wrong and one of the major national projects of the early twenty-first century.
Political and commercial interdependence
The whole development of digital television – from its early experimental stage through to completion of the planned technology substitution – involves a complex interplay between technology, commerce and politics. Digital switchover could never have been planned without a major government role and the decision to undertake it was a political one.
Broadcasting has always been political and British broadcasting, editorial independence notwithstanding, is no exception. In the 1920s, 30s and 40s – the period of Lord Reith's 'brute force of monopoly' – the role of commerce had been subservient to public policy. The strategic issues – how many broadcasting services there should be, their remits, their funding – were all decided by the Government. A broadcasting monopoly was entrusted to the BBC as a public corporation, in contrast to the flourishing pattern of commercial radio, and then television, stations in the United States.
In the 1950s, when the British establishment eventually admitted commercial television, the Government placed it too within a strong public policy framework. Initially, the commercial television companies were contractors producing programmes for a new public service body, the Independent Television Authority, to publish.
By the last decade of the twentieth century, the emphasis had shifted. The BBC-ITV duopoly had given way to a much more pluralist pattern, including Channel 4 and Channel Five, Welsh and Gaelic language services, and a lively independent production sector. During the 1980s analogue satellite and analogue cable had developed new multi-channel pay TV businesses as well. Regulators had attempted to take technical decisions on behalf of the satellite industry and had failed. Television was increasingly shaped by commercial forces.
Even so, the UK Government had explicitly decided not to treat television as if it was just like publishing and could be left to the market, operating within the normal laws of competition, fair trading and libel. Politicians regarded broadcasting as special for a number of reasons which gave them an interest in it:
• maintaining a regime of editorial balance and impartiality,
• preserving taste and decency in a medium which entered into every home,
• pursuing educational and cultural goals,
• having a potential tool for government communication in wartime,
• and managing spectrum as a public resource.
So the industry remained regulated within its own public policy and legal framework, set primarily by successive Broadcasting Acts, by the BBC's Charter and Licence, and by the regulations governing the use of spectrum. Analogue terrestrial television broadcasters were therefore not constitutionally free to set up new services without reference to the Government. Nor, of course, could the broadcasters unilaterally decide to replace one television transmission system with another in the way that, for example, the music and consumer electronics industries substituted the CD for the LP. A major technology change in broadcasting such as digital switchover had to involve politicians.
However, the Government could not unilaterally decide that the country was now going to adopt a new broadcasting technology and impose it. No government could sensibly specify the detailed technical standards to ensure interoperability between digital transmitters and receivers. In modern mass communications no country is a technological island, and the television receiver industry in particular had developed into an international market.
Spectrum usage is planned internationally as well as nationally. Within the framework of the United Nations Organization, the International Telecommunications Union (ITU) has a high-level oversight of the way spectrum is used across the whole range of broadcasting, telephony, mobile communications, navigation and astronomy throughout the world. Its aims are to prevent harmful interference and improve effectiveness of use and, by agreement, it allocates particular bands of spectrum for particular purposes to assist compatibility.
This is done within three ITU regions – (a) Europe, the Middle East & Africa (b) the Americas and (c) the Far East & Australasia. Each band of spectrum is given primary and secondary uses, with primary-use services fully protected and secondary-use services protected from one another but not from primary-use services. Within Europe a body called the CEPT (European Conference of Postal and Telecommunications Administrations) coordinates and guides the European countries' governments and regulators and publishes the European Common Allocation Table, listing, for each frequency band, the various services recognized in Europe.
Even if the politicians of the European Union, whose territory constitutes a major regional market in the global business of TV receiver manufacturing, combined to attempt to impose new technical standards for the European market, there could be no confidence that their prescribed solutions would work commercially. Down that road lay the prospect of political embarrassment over alleged responsibility for commercial failure. So, in planning digital switchover, politicians had to work with the market, taking account of the market's European and global dimensions.
This is much easier to say than to do. The television market is open, competitive and international – and regulated to this end. So no individual company could be a monopolistic government 'partner' organizing the end-to-end changes needed to bring in new technology smoothly. Concentrations of ownership and vertical integration could help, but major vertically integrated players in a competitive market face commercial risks and can go bankrupt or undergo major changes of ownership. Public service broadcasters could play a leading role, but they have limited funds, a limited appetite for financial risk and no ability to guarantee receiver supply and purchase. So in pursuing switchover, governments had to work with a diverse and somewhat fluid group of market competitors, many of them international businesses who, before they could work with national politicians, had first to agree to collaborate with one another – up to a point and in some respects.
Even when enough of the key political and commercial decision-makers can agree that collaboration is both desirable and practical for technical purposes – to mark out the digital technology playing field on which competition in services and products can then take place – the issues become much trickier in areas of marketing and communications. Whose job is it to market the new technology as a whole, as distinct from the individual programme channels or receivers and recorders? Whose job is it to explain to the public that digital switchover will, in the end, have to be compulsory? Politicians can be shy here: after all, every reluctant consumer is a voter.
So, as this account of digital switchover in the UK will show, a kind of dance ensued – in which broadcasters took some initiatives but lobbied the Government to take others, while the Government made some decisions and sought to persuade broadcasters and manufacturers to become responsible for others.
Broadcasters and manufacturers not only danced with the Government and regulators, they also danced with one another, with occasional changes of partner. All the time everyone watched the responses of the public – the consumers, licence fee payers and voters. The performance was largely in public, making this period of broadcasting history very different from the 'top-down' decision-making of the early-twentieth-century founders of the BBC or the behind-the-scenes pressure group activity leading to the 1950s launch of commercial television. Ensuring that the policy-making was in the public domain was essential to the goal of public persuasion – and public persuasion was where the dance ultimately had to lead.
What is digital television?
Before any of us could take the first steps in public, however, we had to understand what digital television was and how it worked, most of us from a starting point of almost total ignorance. Specialist experts understood its technical potential but were not judges of its commercial viability. For senior managers and government policy-makers, with varying degrees of technical literacy, digital television was a new subject, and I certainly had to start with the basics.
The term 'digital' had crept into common parlance as the compact disc permeated the music market and as small digital mobile phones replaced the brick-sized analogue models initially in the market. It was a buzzword associated with consumer electronics equipment promising superior technical quality at a neat size.
(Continues...)
Excerpted from Switching to Digital Television by Michael Starks. Copyright © 2007 Michael Starks. Excerpted by permission of Intellect Ltd.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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