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UK Digital TV 2001 Conference

Speech by Peter Ainsworth MP, Shadow Secretary of State for Culture, Media & Sport.

Given at UK Digital TV 2001 Conference, Park Lane Hotel, London W1.

It is in the end, you, the industry, who will forge Britain's digital future.

You who will have the ideas, the knowledge, the skills to bring this new world into being.

It is you who are taking the risks, making the investment;

But it's not you alone who will pay for the consequences of failure, or reap the rewards of success.

The whole country stands to win or lose on the strength of your endeavours.

If that sounds like a heavy responsibility, well it is. But it is one shared by the Government. Depending on your point of view, you will either find this of some comfort, or hear the sound of alarm bells.

Digital Television is not just about large numbers of new TV channels, as many people still seem to think. It is about a whole new way of communicating, learning, having fun, shopping, and doing business. It will mean that watching television becomes less of a passive activity and increasingly one that engages us in making choices and making contact.

I am acutely aware of the danger of hype, and yes, I know that the word dot.com is about as fashionable as doyley, and yes, I know that BT has recently found it not so good to talk, but just because the new economy has fallen foul of a heavy dose of old economics (however trendy you are you will always tend to end up on skid row if you spend too much and forget the need for customers) doesn't mean it will go away.

It is within Britain's grasp to become the first country in the world to establish an orderly roll-out of digital television. As a result we should attain an enviable position from which to export technology and expertise to the rest of the world.

The economic and, if properly handled, the social benefits of creating a Digital Britain will be immense. These benefits will increasingly come through television screens rather than pc's, which is one reason why this Conference is so important.

The economic and social consequences of digital TV are also the reason why Government has a critical role to play, and the reason why politicians will share the responsibility for your success or failure.

I am concerned that whilst the media and communications industry around the world is moving very fast, the British Government is moving painfully slowly. A pledge to reform the regulation of media and broadcasting was contained in the Labour Party manifesto for the current Parliament. It is another pledge that won't be kept.

Most businesses complain that Government's do too much, and generally it is true that Government action gets in the way. The capacity of politicians to screw things up is infinitely greater than their ability to be useful.

However, when it comes to your industry, we are comforted by a curious phenomenon. A Government getting in the way by doing too little.

There is an urgent need to update the regulatory framework to reflect the dramatic technological changes which have happened since the Broadcasting Act of 1996.

I use the word 'update' because the word "modernise" has become a tainted emblem of spin and failure to deliver.

The White Paper

The Communications White Paper was trailed as innovative, sweeping, radical, a prime example of joined up Government. It emerged as timid, evasive, even reactionary, and a prime example of inter-Departmental squabbling and confusion.

Parts of the White Paper seem to me to represent a step in the right direction. Of course I welcome that, but how much use is a step when what is needed is a leap?

The proposal to rationalise the multitude of current regulators is right in principle. But how will it work in practice? Will the super regulator have the super flexibility required to meet the changing needs of the industry and consumers? Will its decisions be transparent? Will it owe its loyalties to politicians or to the viewers, listeners, broadcasters and internet service providers?

When the Government talks of light touch regulation, does it really mean it? Too much Government thinking seems to me to be stuck in the mind frame of the last century. The instinct to control, to intervene, and to ration - understandable when spectrum was scarce, but quite inappropriate in today's converging multi-media, muti-channel, multi-choice environment - seems to be alive and well. Was it not Downing Street which poured green water onto the White Paper?

And will the arrival of Ofcom mean that never again will the Prime Minister, or his Press Secretary, or the Secretary of State lean on an independent regulator to fix the scheduling of independent news bulletins?

A light touch, yes. But a light touch with heavy breathing, no thank you very much.

The White Paper is especially deficient in two areas. It entirely ducks reform of the present cross-media ownership rules. Perish the thought that this has anything to do with a forthcoming General Election.

I recognise the need to ensure plurality of voice, but one of the main effects of digital technology has been, and will continue to be, precisely to develop a myriad of new and different voices. Meanwhile, it is abundantly clear that if we want British Media companies to grow internationally, they will need to be more free to grow here first.

There is also a need to recognise that the internet is not an extension of traditional broadcasting, but an extension of publishing - where very different regulatory culture has applied.

Secondly, the White Paper has raised the White Flag in the direction of the BBC.

The BBC

Almost every conversation I've had about broadcasting over the past few years has ended up being a conversation about the BBC. There is a sense in which the entire sector defines itself in relation to the BBC. This is hardly surprising. It is enormous, ambitious, diverse, expanding and underpinned by a licence fee which, thanks to Chris Smith, is guaranteed to go up faster than inflation.

As the BBC is quick to remind us, broadcasting is a delicate ecology. Upset the balance in one part of the forest and there will be unexpected consequences elsewhere. This is true; which is why it is increasingly unacceptable for the mightiest beast to have the freedom to define its own hunting grounds while others are penned in by independently regulated electric fences.

The time has come for the BBC to be subject to independent and fair regulation, and for its public service remit to be redefined in the light of the radically changing media environment.

I greatly value the BBC's outstanding contribution to British culture and creativity, but we must be careful to ensure that its new ambitions are not fulfilled at the expense of investment in the commercial sector.

Analogue Switch-off

There is general agreement that, at some point, the analogue spectrum will be switched off. There is not much agreement about when. Some, like David Elstein, have argued that the consumer will decide when switch off happens, not the industry or the Government, and that since the consumer is bored, irritated and confused, he will take his time. Others - not surprisingly those with most to gain - argue for early switch off.

Great as the rewards to the Treasury - and to the economy as a whole, might be, any politician who volunteers to make the screens go blank in millions of homes would deserve the Yes Minister award for courageous behaviour - awarded posthumously.

There remain very serious technical and logistical difficulties to be overcome before analogue switch off can be practically achieved. Not least are the problems of geographical reach and equality of access.

Having said that, it is right to continue to work towards achieving switch over at the earliest acceptable opportunity. This means that the Government will need to work harder to promote an understanding of the opportunities and choices available. It also means that the industry and retailers will need to do more to educate a large section of the community which remains deeply sceptical.

It might be a help, for example, if instead of selling analogue televisions with labels claiming that they're digital, retailers attached labels saying "this television may not work in 2006"

Whilst the latest findings from PACE Micro technology report on "Consumer Attitudes towards digital television" are certainly encouraging, over a third of those asked said that they would wait for switch off before buying into the digital future.

That represents a formidable challenge, and I can assure you that the Conservatives will do all that we can to help meet it.

Channel 4

I want to say a brief word about Channel 4. The fledgeling public service channel which was launched by the Conservative Government has grown to be one of the most vibrant and commercially successful brands in television. I want to keep it that way. More importantly, the board of Channel 4 have said that they want to keep it that way. They have also said, very loudly, that if the Channel were privatised they wouldn't. They claim that the introduction of a shareholder would inevitably lead them to making the peculiar decision to abandon their remit, which the regulator would not permit, and to desert their audience, which would be commercial folly. Channel 4 enviably commands the attention of the affluent 18 to 35 year old market. I see no commercial sense in setting out, as they say they would, to compete in the crowded space occupied by ITV 1, BBC1, or Channel 5.

Nor am I anyway overly impressed by the Government's dewy-eyed homilies about the channel's unique contribution to public service broadcasting. They have done excellent work in news, drama, film, minority programming and current affairs but when I recently asked the Broadcasting Minster to define the precise public service contribution of 'Get Your Kit Off', and 'Eurotrash', she failed to answer. Enjoyable they may be, Reithian they are not. I leave viewers of eFour to judge for themselves.

Chris Smith has gone so far as to say that the privatisation of Channel 4 would be a "disaster for British broadcasting". This is arrant nonsense,

The success of Channel 4 means that it has become a significant public asset. The time has come to realise its value and to invest the proceeds in our cultural institutions.

We propose privatisation for a purpose; to secure the long term financial stability and independence which many of our national museums and galleries want and desire.

I see no reason why, properly managed, Channel 4 will not continue to make very positive contributions to public service broadcasting as a commercial broadcaster in the private sector. With a slackening of the regulatory repairs on ITV, someone will need to be out there keeping the BBC on its toes.

Advertising

Finally, amidst all the hype about the digital age, it is often forgotten that it will need to be paid for. On the assumption that the BBC will not be allowed to build hotels on Park Lane, Mayfair, Oxford Street, Regent Street and Bond Street before anyone else has got much further than GO, the commercial sector will need to take a view as long as its pockets are deep.

There is ultimately only one source of finance for the development which will make Digital Britain a reality: us; whether as direct subscribers to pay per view, or internet users, or as consumers whose money is used to buy branded products and support advertising or sponsorship budgets.

New technologies like TIVO certainly present challenges to the adverting sector, but I am confident they will be overcome. There is though, a proviso. If the Government is sincere in its support for digital technology, it must put its weight behind the advertising industry.

This means rigorously resisting pressure from Europe and elsewhere to end self-regulation and to shackle advertisers with politically correct restrictions on the promotion of toys, food and other products.

All the evidence to date suggests that bossy and interfering Government prohibitions serve only to reduce programme quality without achieving their stated objections.

Just as importantly, they would directly impact on revenues and, by extension undermine the investment which is needed if Britain is to take a leading place in the world market for new media.

We have a great opportunity. Your industry leads the world in technical skills, creativity, imagination and talent. We must not allow your ambitions to be thwarted by politicians who lack the courage to let go.

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