Predictably attention has focused on the Digital Britain report’s proposal, not simply to extend existing broadband at 2Mb per second to everyone in the country by 2012 (at present 2 3/4 million homes, 11% 0f UK households, lack access to a connection at this speed), but also more controversially to levy a £6 a year broadband tax on every home and business with a phone line to raise £1.5 bn over 10 years to deliver by 2017 ‘final third’ next generation broadband, i.e. allowing consumers to download music in seconds and films in a minute. But this would mean the taxpayer is subsidisng private companies to extend their market access, but gets no return in the form of equity (unlike in the case of the banks). Nor is the content pumped down these broadband channels easily regulated. It amounts to an unrewarded transfer from citizens, including the poorest, to the big technology firms. That isn’t justified.

There are other questionable proposals too, notably using part of the BBC licence fee, sourced from the digital switchover element, to fund ITV regional news services as well as universal broadband access. This would open up the licence fee to help fund whatever might in future be viewed as the pressing political or commercial needs of the time. It endorses the idea which has been around for at least 5 years of a contestable fund to fill the ITV public service gaps after 2012. The justification of this top-slicing is that the country needs more than a single provider of public service content, though whether the funding should be extracted from the BBC is quite another matter. The licence fee supports the one institution in Britain that commands global respect and admiration, and top-slicing reporting and values that are gold standard all over the world is surely short-sighted and curmudgeonly. Some may even see it as the thin end of the wedge that ultimately whittles away one of the crown jewels of British life.
The fundamental problem with the report however is that it’s trying to grapple simultaneously with a whole series of deeply grounded issues – digital switchover, the flight of advertising to the internet, the recession, the future of the BBC, and and the growth of multi-channel television – without clarity about future funding. The report assumes, supported by the National Audit Office, that the BBC could have a £250m surplus from the digital switchover fund, and wants this to be reserved for local news and possibly in future for some children’s programmes. That does of course raise questions about whether ITV’s regional news is efficiently run or whether much cheaper production methods might be necessary.
Equally, Channel 4, the other component of public service broadcasting and one which has suffered badly in the advertising fall-off, is widely regarded to have over-spent on many commercial ventures with poor results, and its core public service content gets less than a third (£153m) of its annual programme budget. Moreover as C4 switches more to its non-public service channels such as More4, its core public service content falls even further. How far then should public cash protect C4 from its own deficiencies? Alternatively, Carter proposes spatchcocking C4 into a joint venture with the BBC, but how that would create incremental value or enhance plurality is not made clear. Perhaps it’s a good idea that consultation, on which this report is strongest, should continue further.

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