BBC: No Freeview HD could cost consumers £15.6billion

Britain could lose out to the tune of £15billion if Ofcom doesn’t set aside spectrum for high definition TV on Freeview. The stark warning comes in the BBC’s official response to the Digital Dividend Review, in which Ofcom proposed auctioning off the former analogue TV frequencies when Digital Switch is complete in 2012.
The BBC, ITV, Channel 4, Five, TV manufacturers and many thousands of viewers would prefer a portion of the analogue spectrum to be reserved for a new Freeview multiplex, broadcasting free hi-def TV channels.

Mark Thompson, the BBC’s director general, said: “High Definition is already a consumer reality, and it’s one that really adds value for audiences. “It’s a technological advance that we think can and should be available as far as possible to all viewers of digital television – whether they watch through cable, satellite or an aerial, and whether they choose pay or free-to-air services. “If pure market mechanisms are applied to the whole Digital Dividend, our fear is that it will jeopardise the success of universal access to high quality public service broadcasting, free-to-air on all main platforms and also lead to an erosion of the digital terrestrial platform and its ability to compete.”
The £15billion figure was calculated up by independent consultants Independen, to compare to Ofcom’s estimate that an open auction could net £5-10billion for the Treasury.

It includes the cost of upgrading to another platform such as Sky or cable to get HD for around 6million Freeview homes, and the loss in audiences, advertising revenue, quality and social value to the Freeview platform if it doesn’t have HD. Independen estimated the loss to consumers and society could range from £4.1-£15.6billion.
The BBC’s response also critiques Ofcom’s research into viewers’ desire for HD, the technical assumptions underlying the DDR, and estimates of Freeview channels’ ability to compete in an open auction.
It also suggests that Ofcom should use the DDR as an opportunity to draw up a long term plan for Freeview beyond 2012, including a long-term migration to MPEG-4 for a greater range of SD channels as well as HD.