rose to move, That the Grand Committee do report to the House that it has considered the Television Licensable Content Services Order 2006.
The noble Lord said: The world of broadcasting is changing at a rapid pace. Over the past few years, the growth of the creative industries has been meteoric. The opportunities brought about by technological advances have revolutionised the way we look at, listen to and—crucially—interact with broadcast content. We need to keep adapting our rules to enable these opportunities to be realised, both for the growth of the industry and for the UK economy in general. If we want the UK to continue to be at the forefront of creativity, we need to ensure that the frameworks we rightly put in place can be flexible enough to adapt to these changes.
Currently, a radio multiplex is distinguished by two key restrictions. It can carry only digital radio and use no more than 20 per cent of its total capacity for data services. It cannot carry television. The aim is to ensure that capacity is reserved for radio and not sacrificed for television.
The orders amend both these key characteristics. First, the draft Television Licensable Content Services Order 2006 proposes to redefine the type of content that digital radio multiplexes can carry. This change will permit TV, as well as radio, to be carried. Secondly, the draft Radio Multiplex Services (Required Percentage of Digital Capacity) Order 2006 will increase the existing limit on data services from 20 per cent to30 per cent. Taken together, the orders will enable digital radio multiplex operators to offer consumers a combined package of television and DAB radio, making best use of valuable spectrum and utilising the most recent technology developments.
Historically, legislation has sought to protect digital radio by preventing TV from being carried on radio multiplexes. This has protected the spectrum for digital radio that could otherwise have been sacrificed for TV services. However, we do not now believe that it is in the consumers’ interest that this limitation should continue. Technological advances in compression techniques and a reduction in the amount of capacity that is needed to carry a service have meant that TV can co-exist with, rather than replace, radio. We believe that rather than protecting spectrum for digital radio, the legislation is now preventing the development of innovative new services which will make digital radio more accessible and appealing by allowing it to combine with other services.
The potential of a mobile TV and DAB package will further increase the attractiveness and demand for digital radio; this was tested in last year’s pilot by BT Movio, a subsidiary of BT. The pilot allowed more than 1,000 mobile phone users with specially designed phones to access three live television services and more than 50 digital radio stations. The trial, which was the largest of its kind in Europe, showed that even with the additional services, consumers listened to more DAB radio than they watched television. Additionally, more than 73 per cent of users said they would be prepared to pay for the service on their network.
Evidence from the BT Movio pilot showed that only 11 per cent of users would be happy with fewer than five TV services. Consequently, BT Movio has stated that it cannot sustain a business model with fewer than five services. That is why we propose to increase the maximum data limit to 30 per cent. That will allow for five TV stations in addition to the existing DAB radio services.
There may be anxiety that this represents an unfair advantage for BT when others will have to pay for valuable spectrum for this purpose. However, I emphasise that there is nothing to prevent other people from developing similar services on local multiplexes or on the proposed new national multiplex. It is important to note that the BT Movio proposals are as a wholesale content provider and that its services will be open to other phone operators.
We all know that the pace of technological change is increasing. Both the Broadcasting Act 1996 and the Communications Act 2003 recognised this and anticipated that the technological changes in broadcasting would need us to revisit the regulatory regime. We believe that these orders will make possible innovative, converged services which can increase the take-up and listening to of DAB services. Not only will more people listen to DAB on new devices but, having got used to these services, they may want all their listening to be on DAB. We hope that this is the case. We at least want the consumer to decide. That is why we are introducing these orders. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Television Licensable Content Services Order 2006.—(Lord Davies of Oldham.)
I thank the Minister for his explanation of the order. This is a somewhat complex area but we agree with the order because it makes sense that the radio multiplexes are also used to carry television and other data services. This seems to be a sensible use of multiplex as there are a limited number for both radio and television. It will allow both radio and data to be loaded on to people’s mobile telephones and so on. A new technology is coming in and we support the order.
I have one question: what impact will this have on analogue switch-off and the move to digital? I presume that it will help further that process. If the Minister could explain, I would be grateful.
I, too, thank the Minister for his demonstration of speech compression. It was not perhaps digital but it certainly worked for me. I am grateful for the care with which both Ofcom and the Government have analysed this problem and for the way in which they consulted with considerable care.
I am a great fan of DAB radio—I think the way it has added to the quality of listening is fantastic—and, therefore, anything which would affect that adversely would be a retrograde step. It is quite clear that the multiplexes can be shared and, as we know, convergence is taking place at a rapid rate. On our mobile telephones we will soon have mp3, mobile television and DAB radio—quite apart from telephony services. I think this is a positive step. It may not be all the way to mobile television but it certainly will enable providers to assess the demand for elements of mobile television, and to that extent it is extremely useful.
A key point made in the regulatory impact assessment concerned the benefits to UK technology. If we are ahead of the game, that gives our technology manufacturers a head start, which is highly desirable.
My questions relate to the issue of charging. I assume that the current multiplexes will provide this as part of, if you like, a free addition to their services; that there will not be additional charges for the commercial multiplex and the BBC multiplex; and that the licensing of the third national multiplex will simply take place in the normal way—that there will not be a notional additional expense as a result of the multiplex being able to be used for mobile television and so on. I am not entirely sure about that.
We welcome the proposal to have a further commercial multiplex. That can only be a demonstration of the success of DAB and of a kind of mobile television. Frankly, neither I nor my party is particularly concerned about the BT Movio issue. It is to be welcomed that it had the sense to take the risk and develop a new service which will be available to service providers on a wholesale basis. It is a pioneering service which is leading the way. We unreservedly welcome these two orders.
I am grateful to the two noble Lords who have contributed so positively to the debate. Unanimity between us is a rare experience and all the more to be welcomed for that.
I should emphasise that although we regard DAB in the UK as a success story, it is not a runaway success; take-up rates are good but not exceptional. I share the enthusiasm of the noble Lord, Lord Clement-Jones, for DAB radio, although whenever the time signal comes through a fraction late I think of the noble Lord, Lord Tanlaw, who makes my life a misery in the Chamber by constantly challenging me on the BBC time signal.
However, having said that, like the noble Lord I appreciate the virtues of DAB radio. We share that appreciation with 3 million of our fellow citizens—or perhaps I should say there are 3 million sets in use. That compares with between 110 million and120 million analogue radio sets in the UK, so we still have a considerable way to go before full enhancement occurs. The industry, of course, is looking at ways of making DAB a more compelling proposition, and these orders will help to do that.
The noble Viscount, Lord Astor, expressed anxieties about analogue switch-off. Analogue switch-off, of course, applies to television; there is no proposal to switch off the analogue signal for radio. As the noble Viscount said, the digital service for television fits in with the new developments.
The noble Lord, Lord Clement-Jones, emphasised the advantages that we have in being ahead of the game at present. We need to stay there to maintain the advantages that have accrued to all of us. The noble Lord asked about charges. There will be an optional cost for the TV service. It will not affect DAB radio listeners, but if people wish to take up the enhanced service they will have to pay for it. The providers will, of course, have to invest in the necessary technology. I have ascertained so far that, although no one will be asked to carry around a telephone quite as large as either of these Dispatch Boxes, the machine which will needed to receive the television service will be somewhat larger than the extraordinarily neat versions of the latest mobile phones. For obvious reasons, there will be a change in that regard once a picture is introduced.
Through the removal of these legal restrictions, operators will, for the first time, be able to offer a package of TV and DAB radio to mobile phones. This will give customers, for the first time, the opportunity to experience DAB services via devices which will be both popular and portable. The mobile telephone demonstrated an extraordinary rate of development. Obviously these devices will be more expensive and we do not expect them to produce growth at quite that rate but, nevertheless, one can readily see the advantages to the consumer of these enhanced services. However, the important thing is that it is for consumers to decide whether to avail themselves of the technology once it is made available to them. That is what these orders seek to do. I commend them to the Committee.
On Question, Motion agreed to.