Excited journalists and politicians think they have discovered a pot of gold at the end of the proverbial rainbow. We are told that, as a result of the advent of digital television, it will be possible to sell the analogue frequencies on which the five national terrestrial channels are transmitted, bringing a windfall of at least £50bn to the government. The Sunday Times suggests that certain Labour ministers believe the money could deliver them the election after next; it could pay off a large portion of the national debt. Or it could go towards William Hague’s plans to set up endowments for universities.
I am sorry to disappoint everybody. There is no pot of gold, there will be no windfall. A report from the Digital Television Group (DTG) to the DTI makes clear not only that the date of analogue switch-off is receding (and may disappear entirely), but also that any analogue spectrum released would not be available for auction.
Mysteriously, the report was interpreted by a number of journalists as saying almost precisely the opposite: that an analogue switch-off could come as early as 2004, instead of between 2006 and 2010 as previously announced by the government.
What the report actually says is that digital terrestrial television has been a disappointment. Signal coverage – whether you have a set-top box or a TV designed for digital reception – is considerably worse than expected, largely because the digital signal is much weaker than that for analogue television. Weak analogue signals result merely in picture ghosting; weak digital signals cause the picture to fail completely. Only 56 per cent of UK homes can receive all six packages of digital terrestrial services. Each package reaches between 64 per cent and 81 per cent of British households; substantial investment could improve this to 80-83 per cent. But that would still leave five million homes without reception.
Cable coverage is even more limited, and anyway requires viewers to pay a monthly subscription. Satellite, it is true, has better coverage: theoretically, more than 90 per cent. But there is a big snag: like cable, it cannot provide signals for portable television sets. This was the problem that digital terrestrial was supposed to solve, but, as the DTG report makes clear, it has largely failed. The number of portable analogue TVs is increasing year by year, not least because of the price gap between analogue and digital equipment. The report to the DTI estimates it will take six years before this price differential is eliminated. Meanwhile, “the population of small portable TVs is increasing so fast that it will be a significant impediment to analogue switchover”.
Nor is that all. Most people own analogue video recorders. So far, there is not even a prototype converter box for videos, and the technical problems of programming videos to record digital channels are unresolved. Only a video with its own digital tuner and source of digital signals (or a set-top box with a built-in video) will give people the same recording capacity as they have now.
Much of the emphasis in the digital debate has been over how long it will take all homes to acquire at least one digital piece of equipment. The DTG – really a lobbying group that supports the digital industry – itself discounts as “at the optimistic end of predictions” the forecast by the equipment manufacturers’ association that 22 million digital TVs or set-top boxes will be installed by 2004. It was this figure that no doubt led to predictions of early analogue switch-off: after all, there are only 24 million TV-owning homes. Ministers, it was said, could afford to give away two million decoders to those who had not converted, because of the size of the resulting windfall.
But such calculations entirely miss the point. The average number of pieces of analogue equipment in each home is four: three TVs and a video recorder. Every single one of these will have to be converted to digital if analogue switch-off is not to cause a national outcry. We are dealing with 95 million pieces of functioning analogue equipment, growing rapidly in number. It is thus absurd for the Sunday Times to quote “a source close to” the Trade Secretary, Stephen Byers, as saying that “if the hard core of digital refuseniks is between 5 per cent and 10 per cent of all households, then the government will just buy them all a decoder”. The government would have to give away not just two million decoders, but 70 million, at a cost of about £4bn.
This still would not do the trick on its own. If the tens of millions of portable TVs cannot receive a signal, it is pointless handing out free set-top boxes for them. And what, according to the Digital Television Group, is the best way of getting stronger signals and wider coverage, and of reaching those elusive portables? Why, it is by allocating the analogue spectrum to digital after it has been switched off.
Even this task faces enormous technical problems and costs, not least the installation of new roof-top aerials in millions of homes whose existing equipment is capable of picking up only a narrow range of analogue signals. That is why the analogue switch-off may never happen.
Far from providing a windfall to the Exchequer, digital terrestrial has been a waste of public money, in the shape of duplicated transmission costs and expensive bribes to terrestrial broadcasters to persuade them to invest in digital. Furthermore, the costs will mount as the switch-off date recedes, and perhaps eventually disappears.
So cancel the party. There will be no windfall. Indeed, the Conservatives could well spot another “euro-style” issue and announce themselves the consumer’s friend by opposing analogue switch-off. A Labour government committed to switch-off by wholly unrealistic deadlines such as 2006, or even 2010, could find itself painfully outflanked.
The writer is chief executive of Channel 5
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