[Community Television] Digital switchover set to cost £1bn

[Michelle McGuire]

Digital switchover set to cost £1bn
  29 July 2004 07:51


Broadcasters have told media secretary Tessa Jowell that the cost of 
digital switchover could be as high as £1bn.

The figure would cover around £100m for converting the analogue 
transmitters but the bulk of the costs would be in getting information 
to the public about the switch, marketing new digital services – and 
providing boxes at the end of the process for the elderly and 
disadvantaged groups who could not afford them.

A senior broadcasting source within the BBC this week told Broadcast 
that Jowell – who last week put the switchover date for digital back 
two years to 2012 – had been given the £1bn figure, but calculations 
were still being done on the final bill.

The bulk of the investment would take place within the digital 
switchover period, which is now being planned for between 2007 and 
2012.

The BBC, ITV, Channel 4 and Five are understood to have had a number of 
meetings over the past few months on the logistics and costs of the 
digital switch.

Commercial broadcasters are hoping that the government and the BBC will 
pick up the bulk of the costs, with ITV expecting any costs it incurs 
to be offset by reductions in the cost of its licences. ITV pays around 
£200m a year in licence fees and a further £250m to deliver its PSB 
obligations, but is in the process of renegotiating the terms with 
Ofcom.

The regulator plans to publish new draft digital licences for ITV, 
Five, Channel 4 and Teletext in September. The cost and timetable for 
the switchover is set to be written into these licences.

The BBC, which takes £2.8bn in licence fee revenue a year, has already 
indicated that it is prepared to lead and co-ordinate the switchover 
process.

  The corporation is linking its future to driving switchover – and will 
be hoping that its efforts will be rewarded in the licence fee 
settlements after 2006.

A senior government source told Broadcast it was too "premature" for 
the government to put its own figure on switchover as a number of costs 
were still too variable, including the number of people who might have 
to be given free equipment. The continued drop in the price of digital 
equipment also meant more people would sign up themselves.

  "The costs are still in flux at the moment with many going down rather 
than up," the source said.

Source: broadcastnow.co.uk