Sky blasts government over suggested role for BBC in Digital Britain

23 Mar 2009 | 15.56 Europe/London

Sky is urging the government to drop the suggestion the BBC could play an important role in the roll out of high speed broadband, as outlined in Lord Carter’s Digital Britain report.

The Digital Britain report, published at the end of January, only made a couple of passing references to the BBC when it suggested that the corporation could become involved in marketing the advantages of the proposed fibre roll out (and mobile services up to 2Mb where fibre is not available). In essence the government appeared to be keeping the option open of calling on the BBC to promote uptake of high speed broadband services just as it did with the roll out of digital radio which was stalling before the corporation put its huge marketing weight behind it.

Hence, Lord Carter in the report, and in comments made after its publication, has hinted that the BBC may have a role, even a prominent role, in the future of Digital Britain. Where this role begins and ends, though, is open to much speculation.

Recently when questioned by the House of Commons Business and Enterprise Committee Lord Carter suggested there were “multiple answers” to who funds high speed broadband beyond the areas covered by BT and Virgin Media. When asked if this was role for the BBC, he responded “Possibly”.

He also concluded by citing figures that suggest, even at the modest end of the scale, a fifth of media consumption will soon be online and so, “if that's the case, would you not see the nation's state-funded content provider as having a role? It would seem to me you would.”

Sky Fears

This has rung alarm bells at Sky which has welcomed most of the Digital Britain report but has blasted any suggestion that the BBC will be brought in to help set standards for or promote high speed broadband adoption. Whilst Sky will not be drawn on the specifics of its opposition to BBC involvement, it seems most likely that it is most concerned that the publicly-funded corporation’s iPlayer platform might be placed at the heart of marketing efforts.

In its response Sky welcomed the embodiment of the competitive market in most of its suggestions but drew a line over the BBC’s potential involvement.

“We are disappointed that acknowledgement and support for the role of the market is not consistently applied across the DBR,” it summed up.

“For instance, the suggestion that the BBC should become involved in driving broadband take-up by setting technical standards and developing new platforms raises concerns. As well as the potential for market distortion and illegal State aid, it sets a dangerous precedent and risks distracting the BBC from its core purpose, which is to invest in public service content and to make it widely available to licence fee payers on whichever platforms and services they choose to use.”

BBC Worldwide and C4 fears

Clearly Sky feels threatened by the huge success of iPlayer and although Project Kangaroo, which would have married BBC content with ITV and Channel 4 content has been ruled anti-competitive, it is concerned that the BBC having a central broadband role will distort the market and impact the market for commissioning programmes from broadcasters, like itself, without such a central marketing and technical role within the Digital Britain initiative.

Its fears have no doubt been exaggerated by the report also suggesting a partnership of C4 and BBC Worldwide (the BBC’s commercial arm) should be considered. This would potentially mean the iPlayer or future video on demand and broadcast platforms would naturally combine both broadcasters’ content. Lord Carter has since gone on the record to suggest this partnership or merger is only an option and will not be forced upon either party by the government.

After mentioning that using the BBC as a central marketing and technical partner for the roll out of Digital Britain could be construed as illegal, the broadcaster and broadband provider also finished its hostile reaction to parts of the report by reminding the government that it believes the public will not react well to the roll out of high speed broadband being subsidised by public money.

“Given the right policy framework, commercial incentives will continue to provide increased choice for consumers and promote vigorous competition between efficient service providers,” its response added.

“At a time of considerable economic uncertainty, we believe that the best way to build Digital Britain and to reduce the burden on the taxpayer is to do everything possible to allow that to happen.”

The BBC has yet to respond officially to the broadside from Sky which suggests given the public service broadcaster a role in Digital Britain would be anti-competitive, illegal and an unnecessary drain on public finances.

However, sources at the BBC have told SamKnows the corporation is looking at both the Digital Britain report and Sky’s response to it and will be publishing a formal response later this week.

tcjason says:

If I were the BBC, my response would be something like: "We find it ironic that a company whose service is officially provided from Luxembourg and so is not subject to UK Vat can comment on the state of the British economy. Instead of worrying about the BBC being a burden to the tax payer, how about paying some tax yourself?" iplayer is a fantastic application and is something that many people view, I think Lord Carter is correct in what he says.

24 Mar 2009 | 11.46 Europe/London