Politics
The irresistible force of a £50bn free lunch
Published 04 September 2000
David Cox doubts that ministers can resist the huge potential windfall from selling off the TV airwaves
Sometimes the gods smile even on Labour governments. Perhaps, somewhere Up There, Someone decided that all the initial prudence really did deserve a reward. And perhaps, being so far above such petty considerations as arithmetic, He, She or It stuck a few extra noughts by mistake on the sum originally envisaged. Be all that as it may, Blair, Brown and comrades suddenly find themselves proffered a quite unexpected and enormous dollop of dosh. Early in the next parliament, the government could take delivery of a one-off windfall of £50bn - the equivalent of the proceeds of doubling the standard rate of income tax for a year.
How come? All the government has to do is put up for sale the airwaves on which most of us receive our television programmes. All television would be transmitted instead via the digital signals that already offer better quality and a much wider range of services to those who use them. The way has been shown by the auction in April of the frequencies for "third generation" mobile phones, which yielded a somewhat bemused Chancellor £22.5bn that he had not been expecting. Well, the television frequencies are a much bigger deal.
When spectrum space was allocated for the analogue 625-line transmissions of BBC1, BBC2, ITV, Channel 4 and Channel 5, nobody else wanted it very much. Since then, however, the communications revolution has produced an insatiable demand for means of transmitting data. Analogue television signals take up an enormous amount of bandwidth. Using the spectrum that television currently consumes for television alone is like handing over the motorway network exclusively to cyclists. It might be OK for the cyclists, but it denies motor traffic, both personal and business, access to a resource that it could use to vastly greater effect.
Telecom companies have been pointing this out for some time. Until now, however, politicians have been understandably inhibited by the obvious problem: when you hand over the motorway to the serious motorists, what happens to the cyclists? People are gradually going over to satellite, cable and terrestrial digital television, but, so far, only one in five of us has actually done so. Lots of us are wondering if it is worth the bother and cost, and some of us think that we'll never abandon our old telly as long as it still shows Neighbours.
The means of dealing with such dissidents is brutal. It goes by the name of "analogue switch-off". One day when you wake up and turn on The Big Breakfast, all you will get is crackle and snow. Naturally, you will be displeased, and politicians are terrified of the wrath that such a situation could unleash on them. Chris Smith, the Secretary of State for Culture, has promised that switch-off will not occur until 95 per cent of us have digital access.
This would probably not occur naturally before around 2010. Telecom giants have been resigned to missed opportunities; politicians have sighed wistfully about the pot of gold that must stay at the end of the rainbow; and the television industry has had to struggle to push us into the future with the aid of the flimsy carrot of extra services, rather than the potent stick of switch-off.
Yet, all along, there has been an obvious answer to the problem of digital dissidence. It was described to New Statesman readers in 24 July's TV Special. Now it has turned up in a report from an industry body called the Digital TV Group which has just dropped into the in-tray of the Secretary of State for Trade and Industry, Stephen Byers. Why doesn't the government just give a free digital decoder to everyone who refuses to buy one? The production run would be so large that decoders could be manufactured extremely cheaply. The Digital TV Group reckons that, by 2002, they might cost only £25 each. There are about 90 million television sets and video recorders in the country. Even if every one of them were to be converted at government expense, this would still cost only a little more than £2bn - small change out of £50bn. And not all of them would have to be converted - some televisions and videos are already digital, and many more will be by 2004, probably the earliest date at which the airwave auction could happen.
There are still aspects of the scheme that might worry the nervous politician. The Man from Whitehall would have to intrude into people's homes to plug in their new black boxes. But we know that as a nation we could handle that. Remember the panic about the Channel 5 home video retuners? Armies of bogus retuners were expected to steal pensioners' life savings. Well, the retuners came, did their stuff and went, without major incident. It is true that, in the short term, the prospect of free decoders would slow down digital conversion, with people holding off paying for what they might later get free. But so what?
Byers is expected to push hard for the early switch-off scheme because he wants to see Britain get ahead in the fast-changing television industry. The Chancellor is likely to back him hard. It is Smith, the minister with the most direct responsibility for television, who seems most hesitant. You can see why.
Sooner or later, television as we have known it will change for ever. New technology will effectively wipe out the channels we watch today. Our viewing will be selected for us by machines that will tailor schedules of programmes to our personal tastes, which they themselves will divine. The spot advertising that supports commercial television at present will be cut out by the machines. All of this will have social, cultural and political consequences, not entirely benign, which someone in Smith's position will have to address. But when?
Until now, politicians could be confident that this TV future would arrive only gradually. If, however, the whole country goes digital in 2004, it will arrive much faster. Once people know they are going digital anyway, they will be much more likely to take advantage of the opportunities to transform their viewing behaviour that digital allows.
This could mean, for example, that the new five-channel system for the BBC announced recently by the direc- tor general, Greg Dyke, would become obsolete within a few years. The arrangement by which commercial broadcasters are required to show serious factual programmes, children's programmes, religious programmes and so forth in return for low-cost access to those precious airwaves would collapse, as would those broadcasters' revenue from spot advertising.
If, out of all this, we are to get a broadcasting system that conserves many, or indeed any, of the public benefits we have expected from it in the past, smart ideas will be needed fast. You can see why poor Chris Smith hesitates. But there is no point in his trying to resist. Instead, he had better get down to some hard thinking. Because few historical forces are as unstoppable as a £50bn free lunch.
The author is a television producer and a former head of current affairs at London Weekend Television
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