Submissions
WRITTEN EVIDENCE FROM EQUITY TO THE CULTURE, MEDIA AND SPORT SELECT COMMITTEE
ANALOGUE SWITCH-OFF
INTRODUCTION
1. Equity is a trade union representing 37,000 actors, performers and creative contributors. Equity members work across a range of media, including television, film, radio and live performance.
2. The Government's proposal to switch off analogue terrestrial television broadcasts between 2008 and 2012 is of particular interest to our members, whose work will be available in a range of new and innovative ways in future, with the expansion of delivery methods and new platforms that are being developed.
3. In this submission we will respond to the key points outlined by the Committee in its terms of reference, but only focus in any detail on those matters that are particularly relevant to our experience.
BACKGROUND
4. The TUC has a clear policy on this matter, which Equity supports strongly. This was encapsulated in Composite Motion 16 in 2004 which stated:
5. "Congress is concerned that at the time of analogue switch-off many UK citizens will be unable to receive a digital signal without some financial cost, not only for the software required (through set top boxes), but potentially hardware as well in the form of upgrading of existing aerials or installation of satellite dishes. This will be a particular difficulty where people live in multi-resident dwellings. Congress recognises that many people, particularly those most vulnerable in society, rely on television news, current affairs and entertainment, whilst for many elderly or disabled people television provides the majority of their contact with the outside world.
"Congress calls upon the General Council to lobby the Government on the basis of ensuring that these vulnerable members of society are not financially burdened at the time of analogue switch-off and that they are ensured continual access to the nation's television."
POLICY OBJECTIVES AND ECONOMIC BENEFITS
6. It is against this background that Equity will judge the broad policy objectives and benefits of digital switchover. In the last few years this debate has focussed on the important questions of "how?" and "when?" the analogue terrestrial signal should be switched off. However, it would appear that these crucial questions are being considered in the absence of any further debate as to "why?" such an initiative is necessary and desirable in the first place.
7. The initial arguments presented by the Government appeared to focus on the potential role of digital TV in positioning the UK at the vanguard of the information age. As a result there was particular emphasis on the interactivity of digital technology and potential for delivering e-government services. However, it would appear that the expansion of broadband internet connections in the UK and the versatility of high speed internet have removed this as a driving imperative for switchover.
8. This change in the technological environment has been largely ignored, but is central in the consideration of policy objectives, especially given that other platforms (e.g. broadband, digital satellite) offer the type of services that were identified with digital TV, but can do so more cheaply and efficiently. This change needs to be acknowledged if there is to be an open debate on the benefits of digital switchover.
9. However, Equity recognises that there are a number of more immediate policy objectives and benefits that have been presented by Government and Ofcom regarding full digital switchover. These appear to fall broadly into the category of greater consumer choice and benefit; savings for the broadcasters from ceasing analogue transmission; and the potential for more efficient use of the spectrum.
10. In particular the argument over spectrum efficiency does appear to provide the option of digital coverage to the 20-25% who do not currently have it - and better reception in areas of existing coverage. Moreover, the spectrum sale and alternative usage (e.g. mobile communications) may be an attractive proposition to the Government and to consumers if the spectrum can be sold in order to provide new and better services. However, for consumers the most noticeable and immediate benefit will be an increase in the choice of television channels and the range of programmes available without subscription.
11. The proliferation of television channels, and the sheer amount of television hours that will be required to provide the necessary content for this multiplicity of channels, should also offer new opportunities for Equity members. Ofcom has already licensed 77 channels to broadcast on digital terrestrial television and an incredible 661 channels on cable and satellite. While not all of these channels are currently broadcasting it does provide an indication of how different television is going to be after digital switchover, compared to the era of four analogue channels that existed less than twenty years ago.
12. It also provides a serious challenge to Ofcom to ensure that high quality and original content remain at the heart of broadcasting in the UK, and that switchover is not merely an opportunity to fill the airwaves with cheap imported material. In particular Ofcom must consider its review and reporting obligations under the Communications Act 2003 as outlined in Section 264(3). This states that it has "an obligation, with a view to maintaining and strengthening the quality of public service television broadcasting in the United Kingdom".
13. Ofcom's review of public service broadcasting did address a number of these issues and reached some welcome conclusions in its final document "Competition for Quality", regarding the need for plurality in the provision of public service broadcasting (PSB). However, the subsequent proposal for a £300m publicly-funded Public Service Publisher (PSP) to help address this need for PSB programming does not appear to be one that the Government is keen to pursue due to the funding implications. As a result Equity is concerned that there will be an over-reliance on the BBC, which will (quite rightly) remain as the cornerstone of public service broadcasting.
14. While Equity takes the view that broadcasters will need to do even more to provide high-quality original material in order to attract viewers and advertisers in future, the Government must be mindful of pursuing greater consumer choice and range of channels as an end in itself. Moreover, Ofcom's statutory duty to maintain and strengthen public service broadcasting should not be ignored, or applied only to the current PSB licence holders.
15. Equity believes that a more holistic approach is required. As a result the holders of Ofcom's licences for Television Licensable Content Service (TLCS) should be required to ensure a balance of original content is produced and commissioned, in order to enable Ofcom to achieve a better balance of original production across the whole range of licensed channels. This should go beyond the current requirements of the TV Without Frontiers (TVWF) Directive - at least for the traditional or linear platforms - and must be rigorously policed and enforced.
ROLE OF DIFFERENT PLATFORMS
16. As discussed in the section above, the changes in technology and multiplicity of platforms that are now available to access audio-visual material could be seen as a factor which calls into question the pressing need to switch off the analogue television signal.
17. However there will also be a symbiotic relationship between the delivery of digital television and the huge range of material available, and the expansion of different platforms that can be used to access this material. Therefore the more material that is available on new platforms the more it will encourage the take up of broadband and its use as a platform for viewing television programmes or as a download mechanism. Similarly mobile phones with 3G capability will also benefit.
18. Conversely, Equity would hope that the availability of these platforms can create an environment where the broadcasters will innovate and offer high quality original production as well as new products and services, in order to keep attracting the increasingly fragmented audience.
19. Equity is ready to work with the broadcasters in developing these new and different platforms and has sought to ensure that content can be made available for use on these platforms when made under Equity collective agreements. To that end Equity has agreed a trial with the BBC for the use of such work during the trial of its interactive Media Player (iMP). We are also in discussion with other broadcasters and producers about long term arrangements for the engagement of performers on Equity agreements and the subsequent use of that material.
20. As noted above, the need to provide plurality in PSB provision and meet the challenge of providing content across a range of new platforms was identified by Ofcom, which suggested a radical solution for providing plurality in PSB provision across a range of platforms. This was the driving force behind the PSP proposal, but it would appear this concept has been sidelined due to the difficult questions of funding.
21. Equity is also aware of the case that is being made for an independent free-to-air digital satellite TV service, which could provide competition to BSkyB and assist in ensuring that the benefits of digital television are available to the significant proportion of consumers unable to receive digital terrestrial TV until after switchover. The subsequent announcement in September 2005 that the BBC and ITV will be launching Freesat in 2006 appears to be a positive development in addressing these concerns.
ACHIEVING SWITCHOVER - FEASIBILITY AND STEPS NEEDED
22. The confirmation that the timetable for digital switchover will be between 2008 and 2012 - that was announced by the Secretary of State for Culture, Media and Sport on 15 September 2005 - was welcome, in that it now provides a degree of certainty that was absent previously.
23. Clearly a number of milestones will need to be achieved for the switchover process to be completed in this timescale. Some of these relate to the technical specifications and functionality of the digital terrestrial platform and others relate to general commitments and conditions that the Government has set.
24. For example, in September 1999, when the Government first announced its ambition to switch off the analogue television signal, it said that this would not take place until certain conditions had been met.
- First, that everyone who could watch the main channels in analogue form could receive them on digital systems.
- Second, that switching to digital was an affordable option for almost everyone.
While these original commitments are unspecific, they are still a helpful indication of the basic conditions that the Government believes should be met before switchover can happen.
25. The technical questions as to the feasibility of switchover do not fall within Equity's field of expertise. However, we have followed the work of the Government's own Digital Television Project, which has done some useful preliminary work into the background of how and when digital switchover can be achieved. Moreover, we understand that the trials that took place in the Welsh villages of Ferryside and Llansteffan, which were the first in the UK to switch to digital transmission, appear to have been successful and offered useful practical information.
23. We would hope that the information gained from these trails will assist with the practical questions and the feasibility of ensuring continuous availability of television broadcasts to vulnerable groups.
COSTS ASSOCIATED WITH SWITCHOVER
26. As noted above, there are a number of persuasive arguments for switchover - particularly relating to consumer choice, savings for broadcasters and a more efficient use of spectrum. However, these benefits fall considerably short of the initial case that was outlined by the Government when the case for digital switchover was first muted (e.g. interactive and e-government services).
27. Moreover, it would appear that the economic benefits are questionable and not as clear as initially presented. Equity is aware that some commentators believe that there are considerably greater costs associated with switchover than the Government had initially recognised.
28. The cost-benefit analysis from the DTI/ DCMS Digital Television Project (February 2005) does identify some of the most significant elements - most notably the compulsory consumer investment in enabling digital reception which it estimates at around £3.2bn. However, the inclusion of significant benefits such as consumers being able to receive digital terrestrial TV for the first time (£2.7bn), means the outcome of this analysis provides an estimated positive net benefit (or Net Present Value) of £2.3bn.
29. However, estimates from independent research carried out by Enders Analysis identify hidden or "unrecorded" costs to be of as much as £7bn over the course of the next 20 years. While the range of factors that this estimate includes may be questionable (household costs of reception, specific help for old and vulnerable, Public Service Publisher, electricity consumption), it is instructive and illustrates that the case for switchover is not as clear-cut as the Government would have us believe.
30. Equity also believes that there could be additional costs to the broadcasters associated with further use of original material across these new and existing platforms. Arrangements have previously been made to enable the extensive use of the work of Equity members in the so-called "secondary" market of non-terrestrial digital channels.
31. After switchover this distinction between the "primary" and "secondary" channels will not be as easy to define, as many more channels will be delivered free to air on the digital signal. Therefore in the run up to switchover Equity is keen to secure fair and equitable agreements with the broadcasters and producers which will ensure appropriate payment to Equity members for the use (and re-use) of audio visual material.
32. In future Equity is keen to ensure that the work of its members is available and accessible to consumers across a range of platforms. However, despite the increasing audience fragmentation, broadcasters may need to accept that greater use and repeating of material could lead to greater cost, particularly if these repeats and uses (including video-on-demand, internet streaming and downloading, 3G mobile phones) are likely to increase the current net audience.
33. Finally, there is also a danger that the fragmentation of audiences due to the proliferation of new channels could undermine support for the licence fee, which funds the BBC and its range of services. When this combination of more free channels and required consumer investment in digital hardware and software is put together it may lead some to the conclusion that the licence fee is an unnecessary burden.
34. Equity would categorically reject this view. On the contrary, we believe that the licence fee will remain the best way to ensure high quality public service broadcasting in the future and ensure that originality and diversity is retained in the new broadcasting environment.
35. While consumers are likely to see an expansion of niche digital channels in this new era, Equity has already expressed its concern that many of these channels will not have the same commitment to original productions that are made in the UK and incorporate the cultural and social value, as inherent in much of the work of the BBC. Moreover, many new channels are likely to broadcast a greater quantity of cheaper material from imported shows. As a result overall programming will suffer from the subsequent lack of diversity. However, as noted above, this may need to be addressed by Ofcom through its licensing regime.
PROTECTING VULNERABLE GROUPS
36. Equity believes that the protection and assistance provided to vulnerable groups must form an essential part of the Government's strategy. As indicated earlier in this document that TUC has a clear policy in this area, which we would continue to advocate. Specifically we will continue to argue that vulnerable members of society must not be financially burdened at the time of analogue switch-off and are guaranteed continual access to the nation's television.
37. To that end we have welcomed the Government's overriding commitment - firstly, that switch-off will not take place until everyone who could watch the main channels in analogue form can receive them on digital systems and secondly, that switching to digital is an affordable option for almost everyone.
38. The work of the Ofcom Consumer Panel and the establishment of SwitchCo have been encouraging developments in this area. In particular, the recommendations of Ofcom Consumer Panel in its report on supporting the most vulnerable consumers (November 2004) are a helpful starting point in achieving these goals. Specifically, we would agree that SwitchCo should identify those who are in need of practical support, and that the initial financial assistance should be made available to those who are currently eligible for TV licence exemptions. The cost of this process has been estimated at £250m-£400m.
39. However, this process is only just beginning and we hope that SwitchCo will be in a position to provide regular and detailed reports as to the progress that is being made. SwitchCo must be more that an advocate for the success of digital television and will need to be a more open and effective communication strategy, particularly in order to establish a dialogue with the 13% of consumers who say that they don't want digital TV and don't intend to get it. This must be an evidence based approach that builds upon the preliminary research that has already taken place (e.g. DTI document "Attitudes to Digital Television" January 2004).
40. The scope of the assistance scheme announced on 15 September 2005 is a good starting point, but should not rule out further measure. It is also essential that the funding arrangements to assist vulnerable consumers and clear, transparent and accessible. Furthermore, while the Government has indicated that the BBC will be required to use the licence fee to provide the necessary finance to ensure no one is left behind in the switchover process, more detail is required. There is a certain logic to this funding model given the BBC's remit to drive digital take up and the success of Freeview. However, the key will be an appropriate licence fee settlement that allows it to do this, but also continue to be the cornerstone of public service broadcasting and produce a range of high quality original programmes.
CONCLUSION
41. Equity welcomes this inquiry and hopes that the Committee will consider the points made - particularly in relation to the need to maintain quality and original production in future.
42. The combination of changes at the main public service broadcasters and the possible implications of switchover for the range and diversity of UK programming is a real concern for performers, producers, commissioners and programme makers from across the audio-visual sector.
43. Despite the large quantity of imported material that is already available on a range of platforms, the UK still retains a considerable production base. This enables broadcasters like the BBC to continue to make high quality drama, comedy and entertainment - and allows all of the main broadcasters to commission a range of productions both in-house and from the independent sector.
44. Equity's overriding concern is that the policy of trying to provide consumers with greater choice and release spectrum in the manner outlined could have the unintended impact of decimating the production base of the UK television industry. This would be too high a price to pay at a time when quality and originality is likely to become such a premium for consumers. As a result Equity believes that action needs to be taken by the broadcasters, Ofcom and the Government to protect this precious resource and ensure that we can continue to be proud of television we produce and receive - before and after analogue switch-off.
28 September 2005
For further information contact:
Matthew Payton
Research and Parliamentary Officer
Equity
Guild House
Upper St Martin's Lane
London WC2H 9EG
020 7670 0260
mpayton@equity.org.uk
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