UK outlines digital future

The UK government is to use a proportion of the TV licence fee and a levy on all fixed telephone lines to improve broadband services. The proposals form part of the much-anticipated Digital Britain report, which was presented to parliament yesterday.

The government confirmed its intention to provide universal broadband access of at least 2Mbps by 2012. It plans to use approximately £200m (€237m) of surplus cash from licence fee payments that had been earmarked for the digital switchover process to extend broadband coverage to the approximately 11% of the population that can’t receive broadband at this speed. More surprisingly, culture secretary Ben Bradshaw also revealed that all fixed telephone lines would be subject to a levy of 50p a month, the proceeds of which will be used to deliver high-speed broadband to areas of the country where private investment is not viable. The move is expected to raise between £150m and £175m a year and is likely to act as a stimulus to help telco BT or cable operator Virgin Media to fund the required infrastructure. Both companies are already developing high-speed broadband services but it is not economically viable for them to extend it to remote areas.

Bradshaw also announced that when the TV licence fee settlement is next up for review in 2013, the government will launch a consultation into using a proportion of the proceeds to fund “contestable” projects, likely to include independently financed regional and local news production for commercial broadcaster ITV and homegrown children’s programming. The proportion is likely to be £130m per year, the amount leftover from funds intended for digital switchover help schemes.

On the issue of Channel 4’s future, the Digital Britain report proposed that the broadcaster will receive financial support to help it to create a joint-venture with BBC Worldwide, the corporation’s commercial unit. However, it also admitted that both parties had some way to go before they could agree on the terms of the deal. Channel 4 will not be forced to merge with commercial broadcaster Five but the report proposed that it should make changes in its remit, including a commitment to children’s programming. Channel 4’s board has been asked to present proposals to update its remit by the end of July. However, commentators have suggested that this is not enough to solve the broadcaster’s yearly funding gap £30m a year Ofcom’s own research suggested needed filling.

The report also highlighted the piracy issues threatening the internet. It proposed that communications regulator Ofcom should be given powers to ensure that ISPs cut illegal file sharing by 70%. Persistent offenders could have their details passed onto rights holders, including film studios, music labels and games companies. They could also have access to certain sites restricted and their broadband speeds reduced. These proposals are subject to consultation.