BBC, ITV to launch Freesat in 2008

The BBC Trust has given BBC executives the go-ahead to launch Freesat, a guaranteed free-to-view digital satellite proposition.
Freesat will be made available to consumers on the basis of a one-time initial payment with a guarantee of no further or ongoing subscription charges.
It will be future-proofed, by designing in standards for high definition and personal video recorder functions to end-user boxes, and is expected to launch in time to ensure that any licence fee payers not covered by the Freeview digital terrestrial footprint and do not wish to subscribe to pay TV services are still able to receive the BBC’s services subscription-free. Set-top-box distribution will also follow the Freeview model, with third party manufacturers designing boxes to common standards and to be sold in shops.

Freesat will be managed by a not-for-profit joint venture company to provide coherent marketing and technical leadership. The proposition will be open to other broadcasters, with the BBC particularly expressing hopes “that other public service broadcasters will also wish to participate in the venture.” The BBC Trust has said that the BBC should retain “sufficient control over the decisions taken” by the Freesat company “to ensure that the BBC’s public service objectives are not undermined” and furthermore, that the company’s funding arrangements should be such that other broadcasters “are not being subsidised by the licence fee”.

The BBC Trust’s decision not to apply a public value test to Freesat drew criticism from Sky and Virgin Media. Both pay TV companies called for a PVT to be applied due to the designed-in capability of Freesat to carry HD content. In response, the BBC Trust said that it would be “inappropriate” for it to pre-judge the potential market impact of BBC HD, which “will be examined” during BBC HD’s own PVT process starting in May. It added that a number of responses to its consultations had expressed concern about the public becoming reliant on Sky – in particular Sky’s existing “Freesat from Sky” offering, which is made available for a £150 one-off payment. Addressing that point, the BBC Trust said that “BSkyB is under no regulatory obligation to provide subscription-free access and we think it reasonable to conclude that it does so as a commercial choice,” and added: “…there is no guarantee that there would remain a subscription-free route to access BBC services in the future.”

The BBC Trust said that it received an “overwhelmingly” positive response to Freesat during consultations with individuals and the Audience Councils. 86% of responses said the Freesat proposals “were valuable to all licence fee payers”, and 93% “considered the proposals to fit with the BBC’s public purposes.”
The BBC had hoped to start rolling out Freesat by September 2007, when the first digital switchover trial will begin in Whitehaven. However, because approval has been so long coming, the rollout has been pushed back. It is hoped, however, that the service will be available during some portion of the digital switchover process.