Tag Archive for 'BBC Worldwide'

Boulders and Pebbles

Published on April 22, 2009 in Essays. Closed Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , .

Twenty years ago the industries that provided most of our information, entertainment and culture resembled a few very large boulders strewn over an empty beach. These boulders were the big media companies that came into being because media had high fixed costs – print plants for newspapers and studios for television. They were closely regulated and the resources they used, like broadcast spectrum, were scarce. All that created high barriers to entry. These boulders made their money mainly from advertising and by charging consumers for access to their products, which required controlled access and often physical distribution and storage. The public cultural sector had its own equivalents of the boulders, built on scarcity of resources and access. The BBC, the British Library, the national museums, great professional storehouses of culture and knowledge, are public sector boulders.24

Anyone trying to set up a significant new media or cultural business could be seen coming from a long way off. Rolling a new boulder onto the beach took lots of people, money and heavy machinery. In the mid-1980s an entrepreneur called Eddie Shah tried to roll a boulder onto the British beach by setting up a national newspaper based in northern England. That provoked a protracted national strike. In the 1990s lottery funding allows the creation of a new generation of cultural boulders, many of them very attractive and successful. Some – the Sage in Gateshead – had more open operating philosophies than their older brethren. Others simply seemed to put the same cultural experiences in more attractive buildings. Until very recently boulders, both old and new, were the only business in town.

Now imagine the scene on this beach in five years time. A few very big boulders will be still showing. But many will have been drowned by a rising tide of pebbles. Every minute millions of people come to the beach to drop their own little pebble: a blog post, a YouTube video, a picture on Flickr, an update on Twitter. A bewildering array of pebbles in different sizes, shapes and colours are being laid down the whole time, in no particular order, as people feel like it.25

This dangerously simplified division of the world into boulders and pebbles means there will be three kinds of media and cultural businesses in future.

All the new media and cultural organizations, created from now on, will be pebble businesses. Google and other more intelligent search engines offer to help us find just the pebble we are looking for. Google will increasingly offer to organize more and more of the unruly beach. Wikipedia is a vast collection of factual pebbles. YouTube is a collection of video pebbles; Flickr of photographic pebbles. Social networking sites such as Facebook allow us to connect with pebbles who are friends. Twitter, the micro blogging, service allows people to create collections of lots of really tiny little pebbles. Most cultural entrepreneurs seeking to set up a creative new business in future will start among the pebbles and aim to spread.26

There will still be lots of activity in the boulder business. Many of the boulders will have to merge and cut costs to withstand the onslaught of the pebbles. Channel 4 might merge with the BBC Worldwide. The regional newspaper industry is already lobbying to make it easier for mergers arguing it is the only way to stave off the industry’s collapse. The national newspaper industry is cutting jobs. The cultural sector may well face similar pressures, to merge to cut costs. Only the big will really do well in this game.

The main growth area, however, for the cultural sector, will be in hybrids: boulders that find ways to work with the pebbles or pebble that grow to be boulders. Barack Obama made it to the White House thanks to a campaign which took organizing the pebbles to new heights. Obama’s web based campaign rewrote the rules on how to reach voters, raise money, organise supporters, manage the media and wage political attacks. Obama is now a boulder that speaks pebble. There are huge opportunities to create more hybrids like this, as large institutions seek to engage with their communities in new ways and self-organising communities go in the other direction, acquiring scale. A prime example is the way the British Library is trying to keep up with the online revolution going on around it. Many public institutions – the BBC, the NHS - are now entering this space. The web could allow us, at quite low cost, to create an entire new generation of public service media organisations simply by encouraging publicly funded museums and galleries to become multi-media, running their own television channels over the web or finding new ways to engage audiences to become collaborators and contributors.

Those are the strategic choices facing all cultural and media organizations, including those in the publicly funded sector. Start from scratch with the pebbles. Build a bigger, stronger boulder. Build a hybrid that is a mix of boulder and pebble.

Many arts organisations will want to see themselves in the middle ground: retaining their boulder status but finding interesting ways to interact with the pebbles. Most of these will see this task of interacting with the pebbles as mainly about marshalling the web and digital technology to allow them to do the job they already do a bit better: online booking; seeing preview video clips; blogging; building a social media profile; creating new ways for customers to interact with their institution.

None of that is easy nor to be dismissed lightly. Using web technology well to interact with audiences takes time, persistence, money, imagination and skill. However the web’s potential to change how we make and experience culture will be fully opened up only if we go further.

It would be naive for an arts organisation to endorse a shift towards collaboration and participation as always and essentially good. It depends how it is done, on what terms, in whose interests. As the web spreads it will slowly yet thoroughly change our sense of ourselves: how we experience and create culture; how we get ourselves organised and get jobs done; how we make decisions and find knowledge. Arts organisations should critically and creatively engage with this culture, exploring, probing, questioning, challenging it, opening up possibilities within it that commerce will not entertain, provoking people to see it in different lights and ways. In the process artists and the communities they engage will open up new ways of seeing an emergent mass culture which will be as saturated with the idea of collaboration as industrial culture is with the idea of consumption. Many are already exploring this space. Martin Creed’s Work 850 at Tate Britain had members of the public sprinting through the gallery, weaving their way between visitors. Janet Frere’s work Return of the Soul was created with thousands of Palestinian refugees making tiny clay figures. Anthony Gormley is experimenting with structured mass participation in One & Another, his plan to create a living monument on the 4th Plinth in Trafalgar Square, with a cast of 2,400 members of the public occupying the plinth for an hour each over 100 days. Mass participation is a theme in Olafur Eliason’s work such as the Weather Project in Tate Modern in 2003 and has figured in the work of Art Angel, for example, through the mass reconstruction of the siege of Orgreave during the miner’s strike.

If artists can work in the right way to work with these communities they will find new, more collaborative and participatory ways, to make good art. Engaging with the art of with is inescapable and unavoidable. But it needs to be done well, intelligently, thoughtfully, testing the limits of collaboration rather than simply celebrating it. Better get on with it.

24. Charles Leadbeater, We Think
25. Clay Shirky, Here Comes Everybody, Penguin 2008.
26. Henry Jenkins, Convergence Culture New York University Press, 2006

Section 3.3 – Investment in Content: Original UK Content

Published on January 29, 2009 in Consultations. Closed Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , .

The migration to the new digital world vastly increases the amount of content and applications at our disposal. Digital technology extends choice: wholly-market based operators such as BSkyB offer innovative distribution platforms, aggregating hundreds of digital channels, including their own content across programme areas such as 24-hour news and the Arts that were previously considered the exclusive preserve of public service broadcasters (PSBs). Digital technology also lowers barriers to new providers- the wide range of services now catering to ethnic minority communities and to specialist interest, the development of community services, of user-generated content whether on YouTube or on social networking sites- all testify to the liberating power of digital technology.

For cultural reasons, social reasons and, as citizens in a democracy we want at least some of that rich array of choice to be British content, including impartial British news.

The previous section shows the challenge that digital economics pose to a number of business models that have traditionally supported content creation and aggregation. The huge growth of advertising inventory has produced a parallel reduction in the value of advertising impacts and their ability to fund professional long-form content. Pricing and consumer expectations whether for adverts or subscription to the content itself are a fraction of their analogue value.

The profits that funded high levels of original UK content are diminishing. This change impacts on television and radio broadcasting, and our press among other parts of the sector.

The BBC continues to provide programming of wide range and quality, well-resourced impartial news and is innovating successfully in new forms of content for today’s multi-media, multi-platform digital age. The Government is committed to a strong, fully funded BBC at the core of delivering public purposes in Britain’s media.

As a nation, we have been very fortunate in having other sources of quality programming, delivering public purposes and impartial, high quality news alongside the BBC. This contrasts with many other countries, even the more developed economies, where there is often only one public service institution. All the evidence suggests that Britain’s citizens value this plurality.

But the wide range of sources of news at national, regional and local level, and particularly a range of sources of widely- available impartial news is not something that we can any longer take for granted.

In television and radio, as with news, we may no longer be able to rely on the provision in the future of the wider range of public service programming from varied sources to which we have been used. The BBC will, of course, remain as the guarantor of a significant level of public service programming and of high-quality news. The Government does not believe that the BBC as the only publicly secured provider will be sufficient.

The research in Ofcom’s recent Review of Public Service Broadcasting shows continued public demand both for competition for quality and innovation across a wide range of programming and for a publicly funded plurality of impartial news sources at regional and national levels.

This response by the public shows the continued importance the UK places upon the relationship between impartial news and an informed democratic process. This suggests that we need to be sure of a continued wide range of impartial news sources.

More generally, the Government is clear that a range of different creative sources, commissioners and perspectives is vital for healthy levels of innovation and to ensure that we are developing the talent and voices of all diverse communities. We recognise the need to secure adequate provision of content for Northern Ireland, Scotland and Wales in the context of any new PSB model. For cultural and social reasons, we need at least one other provider of scale as well as the BBC.

We believe that we need to aim for plural public service provision which gives us:

* Sources of high quality impartial news at local, regional as well as national level, including the Nations as well as the UK as a whole.

* Large scale original British content.

* A wide range of voices and talent from across the whole United Kingdom, secured in part by ensuring the continuation and development of creative talent clusters in the regions and Nations, currently guaranteed through regional production quotas on some public service broadcasters.

* Guaranteed levels of investment in independent production to ensure the delivery of the best creative ideas and the healthy development of this vital creative sector, similarly secured through quotas.

* A range of commissioning sources for innovative original production.

* Original children’s production for all ages but especially for over 10s.

* The development of plural sources of commissioning for current affairs, international issues and serious factual programmes.

Although we can expect the market to deliver some of these types of content to some degree, it is likely that interventions will be essential to meet the expectations and requirements of UK viewers. Achieving all of this is a significant task, requiring policy decisions across a great number of areas, including balancing some competing priorities. Ofcom’s review of Public Service Broadcasting makes a number of recommendations to Government. The Government will set out its detailed reaction to these in the final Digital Britain Report. But we are clear now that the over-riding priority is for investment in UK original content at scale and, within that, high quality impartial news, both at UK and international level and for the devolved Nations and English Regions. This priority should be open also to content not created solely with the closed broadcasting networks and traditional broadcasting business models in mind.

Impartial News for the Nations, Regions and locally

At a local level, the challenges for news are intense. These challenges were highlighted in the thoughtful report by the House of Lords Communications Select Committee on ‘The Ownership of news’.

Local media groups are seeking to make the transition to digital business models but argue the need to consolidate in order to have the scale and sustainability to do so. They argue too that the media merger regime does not take account of the potential for competition across boundaries between newspapers and other media. This position, they argue, will become increasingly unsustainable as we move into a fully Digital Britain. Such arguments need to be tested against current evidence.

ACTION 14

To inform whether any change to the merger regime is yet desirable or necessary in relation to the local and regional media sector, the Government will invite the OFT, together with Ofcom and other interested parties, to undertake an exploratory review across the local and regional media sector and make appropriate recommendations.

More widely, many people are beginning to raise questions about the longevity of local content. It is an issue in commercial radio and the newspaper industry. It was one of the factors in the decision by the BBC Trust to reject the BBC management’s proposals for new BBC local services. Yet there are also some encouraging signs of community-based ultra-local information and news services, using digital technologies for inexpensive production and distribution. Similarly, there are examples of new partnerships emerging at local level, bringing together local media businesses working with voluntary and public sectors.

In the responses to this interim Digital Britain report, we will be particularly interested in hearing collectively from the local newspaper industry and others, alongside the independent review of local audio services mentioned earlier, about what role local journalism will have in providing impartial news in the digital age.

UK-wide and international news remains relatively well provided for from a range of sources. This contrasts with the position of news at the level of the devolved Nations and the English Regions where the commercial PSBs are facing challenges.

ITV plc and the other Channel 3 licensees are currently the key providers, outside the BBC, of news for the Nations and Regions. Ofcom’s work has shown that this service is highly valued by viewers and the Government sees it as central to the ITV companies’ identities as public service broadcasters. Ofcom’s analysis also highlights the economic pressures on the continued delivery by the Channel 3 licensees of their public service obligations.

There are three broad options to address the issue of providing audiences with regional news beyond the BBC services. These options may, together, form an evolutionary path to a sustainable future, until such time as broadband-delivered local news could become an effective substitute.

The first is the BBC’s proposal to enter into news gathering and production partnerships with the ITV companies, which could potentially lead to significant efficiencies in this area; and help sustain their ability to provide well resourced and informative regional news well into the future. This would also mark the beginning of a new phase of partnerships led by the BBC acting as an enabler of the plurality and quality of public service broadcasting. The BBC has proposed a range of partnerships in content, production and distribution which are the subject of engagement with other broadcasters.

Discussions between the BBC and ITV plc are at an advanced stage. This proposal offers a promising but not yet settled route forward. The Government is encouraging the parties to conclude their discussion to provide certainty in this area.

Ofcom has suggested that the current regional news slots in ITV’s schedule could be opened to a third party, contestably-funded, news provider or indeed that the whole process, including distribution, could be made contestable. The suggestion has the advantage that it could bring in other news-providers from related media who can offset their news-gathering and production costs across a range of outlets, not just commercial television. It could also provide a clearer route to more broadband-focused delivery at some stage in future. It has the disadvantage that, if adopted wholesale now as the only approach, it may require additional public expenditure, which might be difficult to justify in current circumstances. These ideas should be developed further as a contingency against the risk that the partnership between the BBC and ITV is insufficient to meet the challenge.

In connection with the second option S4C have put forward interesting outline proposals in relation to an English-language news service for Wales. We will work with S4C and other partners to establish whether this proposal could form the basis of a pilot project in Wales.

The Government will also explore with the BBC, STV and UTV as well as other relevant possible partners how far similar pilot proposals could point a way forward for Scotland and Northern Ireland.

We will also consider the wide availability of news within the context of the development of a new and broader, commercially-based, content institution in the UK.

We also recognise the concerns raised by stakeholders, supported by Ofcom’s analysis, in relation to the provision of high quality, original UK programming for children. The plural public service provision of original children’s production, especially for the over 10s (a group currently underserved by the market unlike older teenagers and young adults) is an area we have identified above as being very important. We will return to this important topic in the final Digital Britain Report.

Support for UK originated content brings dual economic and social benefits. The starting point for both is to ensure a strong home market for investment in content of all types, on which we can build international success.

A strong and innovative BBC, working with the market, will be at the cornerstone of these efforts, currently with more than £3 billion public funding each year.

The BBC also has, in BBC Worldwide, an international rights-exploitation and channel operating entity with revenues of £916m and earnings of £118m. It is one of the more successful UK international media operators. It is well placed in the field of global rights exploitation upon which the strongest growth within the digital economy is based. It also has a portfolio of distribution channels in the UK and around the World which act as a shop window for those rights. Its success over the quarter century it has existed (as BBC Enterprises before becoming BBC Worldwide) has rested in large part on its proximity to the BBC licence-fee funded public services, the BBC brand around the world, and its first-look exploitation relationship of the relevant rights.

Following the BBC’s own review of BBC Worldwide at the beginning of this decade, BBC Worldwide has been run as a vigorously commercial entity over recent years. Its contribution in terms of earning for the BBC and its place as a successful rights-exploiter and channel operator domestically and globally are testament to that more vigorously commercial approach. But the evidence suggests that BBC Worldwide may now be testing the limits of what can be achieved commercially within the way that it is currently structured.

Some have suggested that a greater degree of operational and financial flexibility for BBC Worldwide in the future could be better for Worldwide as a business, could be good for the licence payer by enabling it to return more to the BBC itself and could enable it to provide more for the creative system of this country as a whole.  There may be a range of possible options and structures for the evolution of BBC Worldwide, That could enable it to meet public purposes while playing a larger part as a successfully commercial British Rights Company internationally. The Government will discuss this issue further with the BBC before the final report.

Changes are needed in the commercial broadcasting sector. The advertiser-funded, free-to-air broadcasters have contributed almost as much to investment in original UK content as the BBC, and more than the rest of the market put together. Recent research suggests that, in 2006, pay TV accounted for 26 per cent of TV income but only 5 per cent of spend on new TV programming – a position which is unlikely to have changed markedly since then. In contrast, around 60 per cent of advertising and publicly-funded income is translated into programme spend. The advertiser-funded broadcasters have been adversely affected both cyclically by the current significant drop in advertising revenues and structurally by the economics of digital.

These changes are putting increasing pressure on their role as investment engines for originated UK content. ITV plc has argued that it needs to be relieved of most of its licence obligations and other regulatory constraints if it is to be able to sustain significant levels of UK production. Indeed, this is the trajectory of a process which has been underway throughout much of the last decade, as the regulation of ITV has had to adjust to changing market circumstances.

With an increasing pull towards net-based search advertising, and away from traditional broadcast ad sales, the commercial broadcasters are likely to be increasingly unable to develop their businesses to satisfy both their shareholders and our wish for them to continue to generate original UK content at scale and to meet our other public policy demands on them.

We need to recognise that one of the key features undermining the old model is the surplus of advertising impacts. The commercial PSBs are beginning to express concern about the need for scale and efficiencies. Consolidation may become necessary. But how that consolidation occurs is a matter of public interest as well as purely a competition issue. We need to consider how any such consolidation could best meet public interests.

As regards public service obligations, this report offers possible ways forward for Regional News above, and underlines the importance of continuing with Regional production and Independent production quotas as an essential part of the social and economic benefits arising from public service broadcasting.

An important part of the UK’s international success in content to date has been driven by a successful and entrepreneurial independent production sector. A new breed of independent production houses of some scale has developed in recent years. The Terms of Trade have played a contributory role, and, nearly six years on from the Communications Act 2003, both the independent sector and wider media industries have been through significant change.

Terms of trade

Under the Framework set out by the Communications Act 2003, the Terms of Trade between broadcasters and independent production companies govern the release of programming into the UK secondary market and new media rights for independently produced programming. The Terms of Trade allow Independent Producers to exploit secondary revenues from the programmes they create once the broadcaster has shown the programme. This has fuelled growth both domestically and internationally, and encouraged innovation as producers look to maximise value.

Action 15

The existing Terms of Trade between the independent producers and broadcasters have worked well. In light of new entrants to the market, new business models and new distribution channels, it makes sense to have a forward look at how the relationship between independent producers and those who commission their ideas could evolve. This review will focus on the appropriate rights holding agreements and definitions required for a multi-platform digital future, on the overall health of the sector and on continuing to ensure that viewers, listeners and users get the best and most innovative content and programming.

Channel 4 has been greatly valued as a successful public policy intervention, although one designed for the analogue era of a very limited number of television channels and no internet. Today, while it remains a strong brand and continues to provide distinct content, the multiplicity of different content sources available means that its place in the world has shifted. In the digital world and against the backdrop of falling advertising revenues across the medium, Channel 4 has said that it will find it increasingly difficult, in its current institutional guise, to balance its public purposes and its commercial future effectively.

Many of the public purposes for which it was created remain valuable in the digital age – innovation, diversity, original production from a wide range of independent producers. In a digital age, these purposes need to be re-invented and broadened to provide a strong source of plurality and competition to the BBC. At the heart of this new remit should be strong commitments to international and national news, current affairs, documentaries and film with the prospect of introducing programming for older children and news for the nations.

In the medium term such a role could only be discharged successfully by an institution of sufficient scale and flexibility to sustain a viable commercially funded business model:

* Scale: to achieve impact, reach and effectiveness in a globally competitive multi media, multi-platform market place;

* Flexibility: to allow it to adapt to a fast changing media environment.

Action 16

In the final Digital Britain Report, we will establish whether a long-term and sustainable second public service organisation providing competition for quality to the BBC can be defined and designed, drawing in part on Channel 4’s assets and a re-cast remit. It would be a body with public service at its heart, but one which is able to develop flexible and innovative partnerships with the wider private and public sector. While it makes sense to begin by looking at public sector bodies- Channel 4 and BBC Worldwide- the Government is currently evaluating a range of options and organisational solutions for achieving such an outcome.

Channel 4 would continue to be the broadcast licensee within such an entity. For the public the viewing experience would be the same or better than today, but as a sustainable part of a wider whole operating successfully across the whole range of digital devices and platforms.

There is a range of issues that needs to be addressed in achieving such partnership, including the governance and accountability arrangements required for any new structure. We will return to this in the final report.

In summary, we see the BBC as the cornerstone of our audio-visual public services. We could have a vital, second Public Service Content Company, with access to rights and global markets, encapsulating the revitalised remit for Channel 4’s public purposes and with the scale necessary to be able to compete in a multi-media, multi platform world. In addition, there would be Five and  ITV, focused on original UK content, but with a continued commitment to news and in ITV’s case, regional news; S4C’s additional news proposal and desires in Scotland for a stronger, distinctive national voice not limited just to broadcasting. Alongside these institutional developments, there are the public purposes identified earlier, including children’s programming, where plurality of output is desirable. In their recent report, Ofcom noted that contestable funding may be a possible or necessary route to secure such plurality.

The BBC partnerships are a potentially helpful step but the challenge remains to secure such plurality of output at scale and in the medium term and beyond. Other options must remain on the table, including exploring the value of any surplus in the licence fee pre or post switchover and top-slicing. It is an issue to which we will return in the final Digital Britain Report.

Section 1 – Introduction and Executive Summary

Published on January 29, 2009 in Consultations. Closed Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , .

Around the world digital and broadband technologies are reshaping our Communications, Entertainment, Information and Knowledge industries, the wider economy, and the way of life for all of us. We are at a point of transformation.  The success of our manufacturing and services industries will increasingly be defined by their ability to use and develop digital technologies.  A successful Britain must be a Digital Britain.

Digital technology has led to a quiet revolution over the past decade in our lives at work, at home and at leisure. Many of us now take for granted a world of constant communication; of large-scale data transfer from home to work and vice versa, leading to new, more transport-efficient and family-friendly patterns of working; hundreds of television and radio channels; user-generated content; instant connectedness with virtual communities of interest and friendship; and keeping extended family networks in touch with images as well as words.

The Communications Sector is one of the three largest sectors in our economy alongside energy and financial services. The UK’s digital economy accounts for around 8% of GDP. It has been one of the fastest growing successes of the past decade. We pioneered digital television and radio and have led the way in a national switchover programme. Our take up of first generation broadband has grown faster than that of almost all the other major economies. Britain has the highest proportion of internet advertising of any developed economy. By 2012 £1 in every £5 of all new commerce in this country will be online.

More importantly, the digital economy underpins our whole economy and builds our national competitiveness. Our readiness to adopt digital technology has driven productivity gains throughout our wider economy. Over the last ten years the UK has been consistently closing its historic productivity gap with the other leading European economies, based largely on our take-up and adoption of digital technology.

But our productivity still lags well behind the USA and we face new challenges from the innovative companies of the successful Asian economies. At their best, they combine fierce competition, providing innovation and consumer services, with a regulatory framework that balances the value of investment in the next generation of technologies against the benefits for the consumer of a competitive market place.

So Britain’s competitive position as a user and producer of digital technology cannot be taken for granted. In the USA, the development of the digital economy, deployment of modern networks and universal broadband internet access are a central part of the new Administration’s programme.  The French Government has launched an ambitious reform strategy for their Communications Sector.  The European Commission’s global league table of digital adoption, skills and use shows that the UK, having been in the top seven earlier in the decade, has slipped to twelfth place.

Against this backdrop, this report assesses the UK’s readiness fully to exploit the dramatic shift to digital technology as the basis of huge parts of our economy and private lives. This revolution is only a decade old – still in its infancy. Our demands and expectations of it will rise at an accelerating pace. Are we positioned to meet those demands and expectations?

The first, crucial conclusion of the analysis we have done shows that, as a country, we must ensure that our wired and wireless communications and broadcasting networks can meet the demands of a modern knowledge-based economy. Much work has already been undertaken, but over the next five years we will need to upgrade these networks in order to maintain our position and meet our ambitions.

This makes the need for an active and strategic approach from government indispensable if we are to close the gap. We need to plan now, identify the market failures that are standing in the way of a full roll out of digital infrastructure in the UK, and act swiftly in Government to help the market in the timely delivery of the high-capability infrastructure we will need. This industrial activism from government will be critical to ensuring that the UK gets the most out of the digital economy.

The growing global focus on digital technology President Obama’s technology-based American presidential campaign changed the face of US elections and the new President has made it clear that he sees both technology and a strong communications infrastructure as vital to economic recovery and growth. This includes a radical approach to the deployment of a modern communications infrastructure, including redefining universal service to extend its scope to broadband and unleashing the power of the wireless radio spectrum.

The President’s digital ambition is being replicated across the globe. The French Government has recently launched its France Numerique 2012 plan, an ambitious communications sector strategy designed to strengthen France’s digital position and enhance its broader competitiveness at a time of global economic slowdown and crisis. The message laid out in the plan is clear: the digital economy is the most dynamic sector in the world and as the global recession bites, it is essential to nurture those parts of the economy that can generate growth potential and jobs.

This is not simply a question of economic competitiveness, but also of fairness. We are at the point of technology development where we need a programme to ensure that everyone can connect to the digital economy, that its benefits and advantages are available to all. This means ensuring that all have access to the skills to participate effectively; and that the content and services available give everyone a good reason to take part.

The digital society offers us, as citizens, increased access to information, participation and influence, not least in the democratic process – the recent Presidential Election in the USA was the first to be decided as much online as offline. In addition to news and democratic participation, the digital world gives individuals scope for a broader and richer range of public service content than ever before, that truly informs and educates as well as entertains.

The necessary education, skills and media literacy programmes to allow everyone in society to benefit from the digital revolution will be a central part of the Digital Britain work and key to our success. We must ensure that being digital is within the grasp of everyone. If we do not, we risk leaving significant parts of our society disenfranchised and permanently behind the mainstream. In so doing, we would fail to secure the full potential of these technologies for our country.

It is important for the UK that we enjoy content over digital networks that relates to our culture and experiences as a society and informs us as citizens in a democracy. In practice, this means content generated in the UK for UK consumers, and plural sources of informed, accurate and impartial news, as well as of informed comment and analysis. The market will always provide some of this content, but we need to decide what else we require, and make policy decisions to achieve that. What do we, as a society, expect and require, and what institutions and policies will best deliver it?

Today, Britain has a range of institutions and interventions mostly designed for the analogue age. To date, only the BBC has the reach, the strategic and operational capability, and the funding to be a provider of such content at scale across the digital landscape. In this interim report, we examine the scope for other modern interventions that could provide for plural British digital content and the possibility of a new organisation of the scale and reach needed for the multi-media, multi-platform digital world, able to work alongside the BBC but with a distinct role.

At the same time, we need to ensure that Britain is well positioned to take advantage of the opportunities around innovation in new media content. Our track record in creativity and technical innovation in existing media provides an excellent base, but this needs to be married to development of business models that enable content creators to flourish on new platforms. We must also have the research and development programmes that will help us maintain our position.

For us as a society, digital technology also offers the prospect of more effective delivery of wider public services in terms of quality of service, connectivity and reach for the individual – as users of online services today, from NHS Direct to the DVLA’s Car Tax Renewal Service, can attest.

Equally important, the digital society can offer more efficient public service delivery. This will be crucial in an era of very tight constraints on public spending in the years to come, with an additional £5m of efficiences announced in the 2008 Pre-Budget Report. Using the money in the service rather than its delivery is a major benefit for both the user and the taxpayer.

Delivering Digital Britain will require an ambitious and clear strategic vision from Government and a new and stronger sense of co-operation between Government, regulators and industry. We will play our part to ensure open and effective government, including ensuring, through bodies such as the Information Age Partnership, Government and industry have regular, open and constructive fora for discussion.

The Information Age Partnership. The Information Age Partnership (IAP) is a partnership for action between industry and Government, comprising Ministers and Chief Executives of the UK’s leading IT, Electronics, Communications and Content companies.

The purpose of the IAP is to ensure that ICT is effectively deployed to accelerate innovation and productivity growth across the economy and to impact directly on the priorities of small and medium sized businesses. This helps the UK to take maximum global advantage of the technological, economic and political developments that characterise the information age and can drive the UK’s economic recovery.

We believe that the Information Age Partnership will become an even more important and valuable forum for engagement between Government and industry, with a mission to ensure that the promise of Digital Britain is realised.

We need a comprehensive programme for Digital Britain: a programme that has five objectives for 2012 which drive the analysis and proposals in this Interim Report.

Digital Britain: Five objectives

* Upgrading and modernising our digital networks – wired, wireless and broadcast – so that Britain has an infrastructure that enables it to remain globally competitive in the digital world;

* A dynamic investment climate for UK digital content, applications and services, that makes the UK an attractive place for both domestic and inward investment in our digital economy;

* UK content for UK users: content of quality and scale that serves the interests, experiences and needs of all UK citizens; in particular impartial news, comment and analysis;

* Fairness and access for all: universal availability coupled with the skills and digital literacy to enable near-universal participation in the digital economy and digital society; and

* Developing the infrastructure, skills and take-up to enable the widespread online delivery of public services and business interface with Government.

Readers of this interim report will see that there are varying levels of detail and analysis in the different sections of the report. This is inevitable in an interim report and reflects the fact that there are some areas, where the problems are pressing, where existing knowledge of the issues, informed in particular by previous reviews and the work of Ofcom among others, have allowed us to move forward faster in our thinking and policy development. There are areas where this interim report reflects emerging findings; and those areas where we need to undertake much wider consultation and consideration, including across Government, before we bring forward detailed recommendations to provide a more comprehensive programme for Digital Britain. The process to date has been far from exhaustive. There are many aspects of this vital sector and its wider linkages to our economy and society that we only touch on – from smart grid technology to the links between the Knowledge Economy and a Low Carbon Economy, to the specifics of the next generation delivery of public services online.

Based on the five objectives above the main actions set out in this report are as follows:

Digital Networks

In relation to Next Generation Access Networks, we propose a number of specific actions:

ACTION 1

We will establish a Government-led strategy group to assess the necessary demand-side, supply-side and regulatory measures to underpin existing market-led investment plans, and to remove barriers to the timely rollout, beyond those declared plans, to maximise market-led coverage of Next Generation broadband. This Strategy Group will, by the time of the final Digital Britain Report, assess the case for how far market-led investment by Virgin Media, BT Group plc and new network enterprises will take the UK in terms of roll-out and likely take-up; and whether any contingency measures, as recommended by the Caio review, are necessary.

ACTION 2

Between now and the final Digital Britain Report, the Government will, while recognising existing investments in infrastructure, work with the main operators and others to remove barriers to the development of a wider wholesale market in access to ducts and other primary infrastructure.

ACTION 3

The Valuation Office Agency has provided new, clear guidance which addresses the problem of clarity over business rates identified by Francesco Caio in his report, and will ensure that they respond to any queries from existing and new investors and maintain clear, helpful guidance. For its part, the Government will ensure that the guidance is widely understood by potential investors.

ACTION 4

We will, by the time of the final Digital Britain Report, have considered the value for money case for whether public incentives have a part to play in enabling further next generation broadband deployment, beyond current market-led initiatives.

ACTION 5

The Government will help implement the Community Broadband Network’s proposals for an umbrella body to bring together all the local and community networks and provide them with technical and advisory support.

In relation to existing and Next Generation Mobile Wireless Networks:

ACTION 6

We are specifying a Wireless Radio Spectrum Modernisation Programme consisting of five elements:

a.   Resolving the future of existing 2G radio spectrum through a structured framework, allowing existing operators to re-align their existing holdings, re-use the spectrum and start the move to next generation mobile services. This must be achieved whilst maintaining a competitive market. If this can be done, the economic value of the spectrum would be enhanced. Existing administered incentive pricing (AIP) levels would be adjusted to reflect that enhancement. The Government believes that an industry-agreed set of radio spectrum trades could represent a better and quicker solution than an imposed realignment. There is an opportunity for industry to agree a way forward by the end of April 2009. In the absence of an industry-agreed trading solution by then, Government will support an imposed solution.

b.   Making available more radio spectrum suitable for next generation mobile services. Ofcom has proposed the release of the so-called 3G expansion band at 2.6GHz. The Government will support proposals from Ofcom to play a key role in a pan-European alignment of the Digital Dividend Review Spectrum (the so-called Channel 61-69 band), being released by the progressive switchover from analogue to digital broadcasting, pioneered by the UK. This will free up radio spectrum particularly valuable for next generation mobile services.

c.   Greater investment certainty for existing 3G operators: The Government wishes to encourage the maximum commercially-sensible investment in network capacity and coverage. But the further into a fixed term licence one goes the greater the disincentive to invest. We want to resolve this issue now as part of the structured framework. As part of the structured trading framework existing time-limited licences could be made indefinite and subject instead to AIP beyond the end of the current term. If this were achieved the Government would look to ensure that the AIP then set reflected the spectrum’s full economic value and hence would capture over time the return equivalent to the proceeds that would have been realised in the market from an auction for a licence of the same period.

d.   Greater network sharing: the Government and Ofcom will consider further network sharing, spectrum or carrier-sharing proposals from the operators, particularly where these can lead to greater coverage and are part of the mobile operator’s contribution to a broadband universal service commitment.

e.   Commitments by the mobile operators to push out the coverage of mobile broadband eventually to replicate 2G coverage and mark their significant contribution to the broadband universal service commitment.

In relation to Digital Television Networks:

ACTION 7

We will consider at what point and at what cost the standard offer provided by the Digital Television Switchover Help Scheme could have a return path capability, and we will ensure that such capability is available as an option.

ACTION 8

We will examine how the marketing and communications activity around Digital Switchover could be enhanced to use the region-by-region programme of publicly funded information and advice on one form of digital transition to provide impartial information on wider opportunities of digital beyond digital broadcast television.

In relation to Digital Radio Networks:

ACTION 9

We will take action to support DAB digital radio in seven areas:

a.   We are making a clear statement of Government and policy commitment to enabling DAB to be a primary distribution network for radio;

b.   We will create a plan for digital migration of radio, which the Government intends to put in place once the following criteria have been met:

-     When 50% of radio listening is digital;

-     When national DAB coverage is comparable to FM coverage, and local DAB reaches 90% of population and all major roads.

c.   We will create a Digital Radio Delivery Group which includes the retailers, the Transmission Networks, the BBC, the Commercial Radio Companies, the Car Manufacturers, consumer representatives and the device manufacturers, whose role would be to increase the attractiveness, availability and affordability of DAB and to advise on the Digital Migration Plan.

d.   We will work with the BBC to explore how they could extend their digital radio coverage to replicate at least current FM analogue coverage.

e.   As recommended by the Digital Radio Working Group, we will conduct a cost-benefit analysis of digital migration.

f.    We will consult on new legislation to allow a one-off five-year extension of existing community radio licences, to bring them in line with other radio licences and recognise the important role they have in delivering social gain. We also intend to re-consider the rationale for the current restriction of 50% of funding from any one source.

g.   We will commission an independent expert examination of the economic viability, continuing social contribution of, and most effective delivery methods for, local radio services and the relevance of the existing localness legislation.

Digital Content

In relation to the Economics of Digital Content:

ACTION 10

In the final report we will examine measures needed to address the challenges for digital content in more detail, including opportunities for providing further support to foster UK creative ambition and alternative funding mechanisms to advertising revenues.

In relation to Rights and Distribution:

ACTION 11

By the time the final Digital Britain Report is published the Government will have explored with interested parties the potential for a Rights Agency to bring industry together to agree how to provide incentives for legal use of copyright material; work together to prevent unlawful use by consumers which infringes civil copyright law; and enable technical copyright-support solutions that work for both consumers and content creators. The Government also welcomes other suggestions on how these objectives should be achieved.

ACTION 12

Before the final Digital Britain Report is published we will explore with both distributors and rights-holders their willingness to fund, through a modest and proportionate contribution, such a new approach to civil enforcement of copyright (within the legal frameworks applying to electronic commerce, copyright, data protection and privacy) to facilitate and co-ordinate an industry response to this challenge.  It will be important to ensure that this approach covers the need for innovative legitimate services to meet consumer demand, and education and information activity to educate consumers in fair and appropriate uses of copyrighted material as well as enforcement and prevention work.

ACTION 13

Our response to the consultation on peer-to-peer file sharing sets out our intention to legislate, requiring ISPs to notify alleged infringers of rights (subject to reasonable levels of proof from rights-holders) that their conduct is unlawful. We also intend to require ISPs to collect anonymised information on serious repeat infringers (derived from their notification activities), to be made available to rights-holders together with personal details on receipt of a court order. We intend to consult on this approach shortly, setting out our proposals in detail.

In relation to the provision of Original UK Content:

ACTION 14

To inform whether any change to the merger regime is yet desirable or necessary in relation to the local and regional media sector, the Government will invite the OFT, together with Ofcom and other interested parties, to undertake an exploratory review across the local and regional media sector and make appropriate recommendations.

ACTION 15

The existing Terms of Trade between the independent producers and broadcasters have worked well. In light of new entrants to the market, new business models and new distribution channels, it makes sense to have a forward look at how the relationship between independent producers and those who commission their ideas could evolve. This review will focus on the appropriate rights holding agreements and definitions required for a multi-platform digital future, on the overall health of the sector and on continuing to ensure that viewers, listeners and users get the best and most innovative content and programming.

ACTION 16

In the final Digital Britain Report, we will establish whether a long-term and sustainable second public service organisation providing competition for quality to the BBC can be defined and designed, drawing in part on Channel 4’s assets and a re-cast remit. It would be a body with public service at its heart, but one which is able to develop flexible and innovative partnerships with the wider private and public sector. While it makes sense to begin by looking at public sector bodies- Channel 4 and BBC Worldwide- the Government is currently evaluating a range of options and organisational solutions for achieving such an outcome.

Universal Connectivity

In relation to Network Universal Connectivity on Digital Networks:

ACTION 17

We will develop plans for a digital Universal Service Commitment to be effective by 2012, delivered by a mixture of fixed and mobile, wired and wireless means. Subject to further study of the costs and benefits, we will set out our plans for the level of service which we believe should be universal. We anticipate this consideration will include options up to 2Mb/s.

ACTION 18

We will develop detailed proposals for the design and operation of a new, more broadly-based scheme to fund the Universal Service Commitment for the fully digital age – including who should contribute and its governance and accountability structures.

In relation to the take-up of universally available broadband:

ACTION 19

We will encourage the development of public service champions of universal take-up. The Digital Inclusion Action Plan recommended the appointment of a Digital Inclusion Champion and expert taskforce to drive the Government’s work on digital inclusion. Clearly, the work of the Champion will be important in encouraging take-up.

ACTION 20

We are inviting the BBC to play a leading role, just as it has in digital broadcast, through marketing, cross-promotion and provision of content to drive interest in taking up broadband. With other public service organisations, the BBC can drive the development of platforms with open standards available to all content providers and device manufacturers alike.

ACTION 21

A Public Service Delivery plan: we commit to ensure that public services online are designed for ease of use by the widest range of citizens, taking advantage of the widespread uptake of broadband to offer an improved customer experience and encourage the shift to online channels in delivery and service support.

Equipping everyone to benefit from Digital Britain

In relation to Digital Media Literacy:

ACTION 22

The current statutory and specific remit on Media Literacy is contained within s.11 of the Communications Act 2003. As this report makes clear, since 2003 there have been significant market changes in the availability of digital technologies and how they are used. We will ask Ofcom to make an assessment of its current responsibilities in relation to media literacy and, working with the BBC and others, to recommend a new definition and ambition for a National Media Literacy Plan.

This interim report sets out the background to these actions and the analysis on which they are based, as well as providing more detail on how we intend to fulfil them.

I am grateful to the Expert Advisers on the Steering Board and the many stakeholders who have given so generously of their time to produce these emerging findings and proposals and to the project team who have worked tirelessly since last Autumn.