Memorandum by the British Broadcasting
There is now widespread agreement that the convergence
of telecoms, IT and broadcasting and the delivery of online services
at increasing bandwidths has the capacity to revolutionise our
economy and to provide substantial social and cultural benefits.
The "global space" of information and transactions emanating
from the US now represents a level of activity equal to that of
the fifth largest economy in the world.
We believe Europe faces two particular challenges:
to develop its own new media sector
to exploit the economic and learning potential of these new forms
of communication; and
to ensure the benefits are available
to all within Member States and not just the better off and those
likely to access new services through employment.
Television has a key role to play in meeting
this challenge. Digital TV, and receivers linked via a return
path to online services, are likely to reach the 50 per cent to
60 per cent of the population in Europe unlikely to have access
to PCs in the short to medium term. Televisions or set-top receivers
are ubiquitous, relatively inexpensive and familiar. They offer
a short cut to the e-society for the population at large.
Public service broadcasters have a real opportunity
to popularise new services at home and to take advantage of them
abroad. The BBC's series, Computers Don't Bite and Webwise, reached
17 million people in the UK and a quarter of a million took up
the opportunity to try out their skills in free sessions offered
by local institutions in partnership with the BBC. The Net will
develop as a global delivery mechanism for European content. Already
BBC News online is building a worldwide presence likely to be
equivalent in the new century to that of the World Service in
If television is to play this role in enabling
Europe to meet the US challenge in new media, it is vital that
we learn the lessons of past telecoms deregulation.
Telecoms and the growth of the Internet have
been characterised by any-to-any connectivity and high levels
of interoperability. Digital TV is the only converging technology
with neither. Platform operators are developing systems with incompatible
computer operating systems, so that a digital satellite receiver
will not operate fully with terrestrial services and vice versa.
The costs are likely to be very great both for consumers and for
effective competition. This must reduce penetration. Few people
would buy a mobile phone that only worked with others on that
particular network. As a result fewer interactive and e-commerce
services will be delivered through the digital TV than might otherwise
be the case. Consumers will be restricted in the services they
can access and there is a real risk of the digital TV exacerbating,
rather than overcoming, the information rich/information poor
Currently the single most successful digital
TV based interactive service in the UKOpenonly offers
access to a walled garden rather than the full Internet. So whereas
the consumer with an Internet-connected PC can shop around for
the best deal, those dependent on e-commerce through the TV set
top box will have less choice and consequently pay higher prices
than those who can afford a PC.
It is understandable that large, vertically
integrated distribution and content organisations prefer to limit,
as far as possible, the services on their system to their own
intellectual property. It is undoubtedly in their short-term commercial
interest to do so. However, we believe it will not be in their
interests in the medium term, since it will limit take-up of their
services, and it is certainly not in the interests of the economy
as a whole.
As far as consumers are concerned, it is possible
that they will subscribe to a particular platform (satellite or
cable) only to find that they cannot access particular content
(a range of TV and on-demand services) or download product (such
as music) because it is produced by a different television company
or recording studio.
We believe that several policy solutions are
required at both the national and the EU level to open up access
to new platforms and services.
1. Effective rules are needed to ensure
fair, reasonable and non-discriminatory access through
new and existing digital gateways, both for traditional TV and
for interactive and e-commerce services delivered to the TV.
The EU 1999 Communications Review
seems to be moving in this direction but it has made the obligation
to grant fair third party access dependent on the market power
of the gateway controller. We believe that anyone that
controls a significant gateway should be required to grant fair,
reasonable and non-discriminatory access.
2. Access guarantees are needed to
ensure the universal availability of key public services. With
guaranteed access, citizens will be certain that whichever digital
system they use, they will be certain to have access to the informationwhich
might include government online, public broadcasting and online
tax returnsthat their Member State judges to be essential
to a well-informed society. Measures to achieve this might include:
"Must carry" rules on cable
"Must access" rules on
other major distribution systems and to memory in receivers where
that forms a significant gateway.
"Due prominence" rules
to ensure that public service content and channels can be easily
found on proprietary electronic programme guides.
3. Finally, regulatory measures will be
required to promote interoperability between the networks
and devices that will be used to access digital TV, e-commerce
and interactive services. Achieving interoperability through imposing
standards in a fast moving market would be inappropriate. However,
interoperability can be achieved through declaration and licensing
of those key standards, interfaces and authoring tools necessary
to reach the end user. Proper payment for access to those licences
will ensure that owners of intellectual property are properly
rewarded and have a continuing incentive to innovate. This less
intrusive approach to interoperability will only succeed if third
parties are granted access to the essential information at the
same time as the gateway owners' own services.
This short note outlines what the BBC believes
are first steps in ensuring Europe derives immediate benefits
from the communications revolution and is not simply exploited
by US based, vertically integrated, global operators.
We would suggest, further, that the Commission
explore how world class public service
content is being disseminated via the web;
conduct an audit of barriers to public/private
partnerships in parallel with the Communications Review; and
attach a high priority to facilitating
the global businesses that Europe's public service broadcasters
can build on the foundation of their national services.
I hope this outline of our thinking in this
area is useful to you. We would of course be very happy to give
you any further information that you might find useful.
13 April 2000