Digital Britain: What to expect sector by sector from Lord Carter's report
What will the Digital Britain report bring to various sections of the media – and will they get what they're looking for?
Lord Carter's Digital Britain review has been the most comprehensive examination of the media and telecoms landscape in the UK in recent memory. Its impact will reverberate across the industry for some time – regardless of how long the communications minister himself remains in government.
January's interim report set out five objectives: upgrading and modernising the UK's digital networks; encouraging investment in the digital economy; ensuring "UK content for UK users"; providing access for all to new digital technologies; and developing the skills needed to enable widespread take-up of public services online.
It also had 22 so-called action points; Carter's final report tomorrow will have twice that number, spanning everything from digital literacy and protecting children on the internet, to solving Channel 4's funding crisis and combating online piracy. Here are some of the main areas …
Broadband
Carter called for a new universal broadband commitment in his interim report: by 2012 he wants everyone in the UK to have internet access at the speed necessary for watching live TV. Currently almost 4m homes cannot get broadband at the 2Mb/sec speed he envisaged.
Who wants what:
Carter focused on the possibility of using the UK's five mobile phone networks to provide broadband in more remote parts of the UK, assuming that upgrading BT's existing lines would be too expensive. The mobile operators want him to free-up part of the so-called digital dividend – the part of the airwaves released when the analogue TV signal is switched off in 2012 – so it can be used for mobile broadband. Two of them – O2 and Vodafone – want to be able to use the spectrum that was were granted by Margaret Thatcher back in the 1980s for mobile broadband as soon as possible. Their rivals, however, see this as giving them an unfair advantage.
BT has been lobbying hard for government money to improve the nation's millions of miles of copper wire, arguing that the fixed-line network is the best long-term option for broadband. The company wants to use the digital switchover surplus from the BBC licence fee – the cash currently used by the corporation to help people migrate to digital television, which will be no longer needed when the analogue signal is switched off – to be freed up to pay for a universal broadband service commitment.
Getting either mobile or fixed-line broadband to every UK household, including the final 1-2% of homes in very remote areas, would cost billions, however. The satellite broadband industry thinks it could plug the gap but needs the government to underwrite funding for the launch of new satellites such as the planned Hercules satellite – which is due to go into orbit in 2011, at a cost of £500m. The actual kit may also have to be subsidised to bring it within the reach of consumers.
Likely result:
Carter is expected to use the digital switchover surplus to bring universal broadband access. However Kip Meek, the Digital Britain consultant charged with doing a deal with the five mobile phone networks in order to push 3G mobile broadband services beyond the 80% of the population already reached, has not yet managed to get a consensus. There are still sticking points about which operator can use which part of the airwaves and when Vodafone and O2 can launch their service – but a deal is expected within weeks.
Part of the digital dividend – the spectrum left over when the analogue TV signal is switched off – will be freed-up for the mobile phone companies. It will be sliced into three blocks with the mobile companies expected to gang together to buy up the spare capacity. Regional coverage targets will ensure that particular areas get a signal for the first time, allowing Carter to proclaim that he is bringing mobile phone services to every part of the UK.
With regard to universal broadband, BT is expected to be given the go-ahead to improve customer lines and will get the majority of the digital switchover money to push its fixed-line network into more remote areas. The universal broadband service, however, will only reach about 98% of the population – Carter is expected to say that satellite broadband can be used to reach 100% coverage, with the government and regional development agencies working in partnership to try and reduce the cost of such services. It is unlikely, however, that he will call for direct government funding of satellite broadband.
Carter's final report will also address the issue of so-called next-generation broadband networks. Virgin Media is already offering services at 50Mb/sec, while BT will next month start trials of its 40Mb/sec fibre-optic network with its ISP customers in North London. A range of technical changes is expected to be introduced that make it easier and cheaper to build next-generation networks, including opening up public infrastructure such as tunnels and ducts – and Carter will also clarify the complex rules that govern how fibre-optic networks are taxed under the business rates regime. There is not expected to be any massive injection of public funds in the creation of next-generation access networks, not least because BT recently announced it is speeding up the roll-out of its new network so it will reach a million homes by next year. But changes to the way that Ofcom operates – so that its remit includes encouraging investment – will be used to ensure heavy-handed regulation does not hinder the market's ability to develop next-generation networks.
Online piracy
Protecting the UK's creative industries from piracy was a main aim of the interim report – although Carter admitted at the time that this area of his thinking was the least well-formed. Since January he has been locked in talks with ISPs and the content industry, and has released a further consultation document which set out the possible role for a "rights agency" that would bring the two warring factions together.
Who wants what:
Put bluntly, the content industry, and especially the music companies, wanted blood. They were deeply heartened by France's introduction of the Hadopi law – a so-called three strikes system of warning letters before disconnection from the internet for up to a year – and wanted a similar system in the UK.
That law, however, has since fallen foul of the French legal system and more recently the content industry, particularly film and television companies, has been calling for "technical measures". Consumers believed to be illegally sharing copyrighted material would receive warning letters, but then would have their connection speeds slowed, rather than facing outright disconnection.
Several of the ISPs, however, do not want to have to police the internet. They believe that responsibility lies with the owners of copyrighted material, who should defend their own property rather than turn ISPs into collection agencies for big business. If internet companies are forced into policing the web, they have argued, then the content industry needs to pick up the tab through some form of levy.
The ISPs would prefer to see the creation of compelling legitimate downloading and streaming services backed by major content companies, providing consumers with an easy – and, most importantly, cheap – alternative to piracy.
The videogames industry, meanwhile, just wants Lord Carter to acknowledge that it exists – something he failed to do in the interim report. It has been lobbying for the government to introduce a more favourable tax regime to help counter a brain drain which has seen developers quit the UK for countries such as Canada. The games industry thinks piracy can be defeated through the introduction of online services and games that can only be played when connected to a central server which checks the authenticity of the product.
Likely result:
The government sees nothing to be gained this close to an election from making criminals, with no trial, of the estimated six to seven million people who have downloaded illegally copied material. Carter will not introduce a so-called "three strikes" system which results in people being summarily disconnected – instead he is expected to codify in legislation last year's memorandum of understanding (MoU) between several ISPs and the content industry, which resulted in warning letters being sent out to persistent illegal file-sharers.
All ISPs will have to sign-up to a new warning letter regime which will be backed up by "technical measures" that will see the worst offenders have their connection speeds reduced sharply. Exactly how those measures will work and what standard of proof and appeals procedure will be needed, will be the job of the ISPs and content players to work out through the auspices of the "rights agency" – although that will not, however, be its name.
Funding for the new body and regime will come from industry, although Carter is not understood to be in favour of industry levies on computer or internet equipment. But it will still be the responsibility of content owners – either individually or through their own trade bodies – to take any legal action against persistent offenders on whom "technical measures" fail to make any impression. The new regime, however, should deal with all but the most hardened file-sharer.
In parallel, Carter will also make another plea for content companies to create compelling legitimate online services. This summer will see, for instance, the introduction of subscription-based streaming music services from Sky and Virgin Media – and Channel 4 recently announced plans to put much more content on its 4oD platform.
As for the videogames industry, the government is looking at changes to the tax regime in the UK to prevent the brain drain of developers out of the country. Lord Carter's report is expected to say that the Treasury will introduce tax changes later this year. "We do recognise the importance of the videogames industry to the British economy. Research and development tax credits are available for the industry, and we are looking at introducing further tax breaks," the new culture secretary Ben Bradshaw said in the House of Commons last week. The report will also look at the way that videogames are classified and how effectively age ratings are enforced by retailers.
Media Ownership:
The local and regional media industry is in turmoil. Newspapers are being shut, jobs are being lost and the provision of local news is in a dire state as advertising migrates to the internet and the recession bites. In January, Carter announced plans to discuss potential changes to the rules governing the merger of local and regional media companies with the Office of Fair Trading, Ofcom and media companies in order to see whether the industry can be saved by a spate of mergers and consolidation.
Who wants what:
Local and regional newspaper groups believe scale is the only way to survive the recession – and they want to be able to swap assets as well as merge their businesses. Deals being considered include merging DMGT's Northcliffe with some of Trinity Mirror's titles in the Midlands, while Johnston Press could pick up some of its Yorkshire titles. Guardian Media Group, owner of MediaGuardian, is seen as an obvious ultimate home for other Trinity titles such as the Liverpool Echo. Newspaper groups are also expected to move daily publications onto a weekly print run to save costs. In fact tomorrow morning, Christopher Thomson, chief executive of DC Thomson & Co, Johnston Press chief executive John Fry, Carolyn McCall, head of Guardian Media Group and Trinity Mirror's Sly Bailey will appear before the culture, media and sport select committee to discuss "the future for local and regional media".
MPs want reassurance that consolidation will not lead to a reduction in local news provision, with newspaper proprietors aggregating their teams into central locations and ignoring outlying regions. Investment bankers in the City, meanwhile, are licking their lips at the prospect of the advisory fees that can be garnered from knocking the UK's four key regional news players into just two.
Likely result:
The Digital Economy Bill, which will be set before parliament later this year in order to implement Carter's proposals, will include a relaxation of the rules governing local and regional newspaper ownership. Some newspaper owners, however, will be disappointed by the final Digital Britain report. They had hoped that Carter would look at the issue of online aggregators, such as Google news, who do not always give them the opportunity to monetise the traffic around their content.
Channel 4/BBC Worldwide
January's interim report threw its weight behind a tie-up between Channel 4 and BBC Worldwide, instead of a merger with Channel Five, and the creation of a "new entity" with public service broadcasting at its heart. C4 had argued that its long-term survival was in serious doubt and that it faced an annual funding gap of £150m from 2012. The door was, however, left ajar for a potential Five deal.
Who wants what?
The idea of a complete merger between BBC Worldwide and C4 was raised early but the plan was considered wholly unacceptable to the BBC. The focus then moved to thrashing out a blueprint for some form of joint venture tie-up of assets. Five, which has experienced a 30% drop in advertising revenues year-on-year, is desperate not to be left out of the latest round of consolidation; Dawn Airey, the chairman and chief executive of Five, has vigorously promoted a tie-up with C4, an idea that failed to gain traction several years ago. Five's argument is that, with adequate protections around public service broadcasting, a merged entity could fit the requirements of Digital Britain.
John Smith, the chief executive of BBC Worldwide, told the House of Lords communications committee earlier this month that the partnership would include his business's UK assets, including its 50% stake in the UKTV pay-TV channels business, that includes Gold and Dave, and its 60% stake in the DVD business 2Entertain. The venture could also include the remaining 50% in UKTV held by Virgin Media, which BBC Worldwide is keen to acquire, and the 40% of 2Entertain owned by Woolworths.
The venture has focused primarily around leveraging "TV/screen-based assets", which might mean that assets such as the BBC's magazine operations are out of bounds. The door has been left open to include areas that fall under the nebulous category of "special interest", however. Ofcom, in its report on the future of public service broadcasting which fed into Digital Britain, also said that C4 could potentially benefit from a "one-off allocation" from the BBC's so-called switchover surplus to help shore up its finances to do deals.
Likely result?
Carter and the former culture secretary, Andy Burnham, have already begun managing expectations around tomorrow's report. Burnham has said not to expect a "tablet of stone" but "powerful seeds and ideas" from which the future of public service broadcasting might be shaped. It is understood that BBC Worldwide and C4 do not have a done deal on the structure of the new entity, and observers do not believe Carter will unveil a final blueprint. Carter is stuck between a rock and hard place, with any BBC asset-sharing that resembles state aid likely to lead to official complaints. This makes it likely that Carter will, again, give the go ahead to a C4/BBC Worldwide tie-up with a potential focus on how governance and ownership issues will be tackled.
Provision of regional news
ITV intends to pull out of providing the programming for a regional news service from 2012. What happens next could depend on what Carter's report says about the use – or not – of the £130m-a-year "digital switchover surplus" from the licence fee.
Who wants what?
The idea that regional news could be run by various independent news consortia was raised in Ofcom's public service broadcasting report. The consortia, which could see media companies such as STV, Reuters, ITN, PA or the Guardian Media Group deliver regional news, would be funded by between £40m to £60m annually from the licence-fee switchover surplus. There has been a tug-of-war of sorts over how this potential sum, which could be £250m-plus, might be used. Carter has indicated that it could help fund plans to achieve universal broadband targets.
The BBC has aggressively defended attempts to "top slice" the licence fee. Michael Lyons, chairman of the BBC Trust, has said that using these funds for projects beyond the BBC's public purpose would be an "act of bad faith" and "tantamount to breaking a contract".
Likely result?
The debate over what the switchover surplus should, or shouldn't, be used for is arguably less thorny than discussions over how it can be used. It has been argued in some quarters that for the switchover surplus to be used, Carter would need to look at somehow formalising a new governance and funding structure to allow it to be tapped.
In terms of where the money might be used, if it is freed up, lobbying for funding for the independent consortia plan has made headway against proposals to use the cash solely for broadband. Early indications suggested that the switchover funding could be split between the two plans, although some more recent estimates of the cost of a regional news service cast doubt over the ability to do this.
Richard Wray and Mark Sweney
Monday 15 June 2009 00.05 BST
guardian.co.uk © Guardian News and Media Limited 2009
What will the Digital Britain report bring to various sections of the media – and will they get what they're looking for?
Lord Carter's Digital Britain review has been the most comprehensive examination of the media and telecoms landscape in the UK in recent memory. Its impact will reverberate across the industry for some time – regardless of how long the communications minister himself remains in government.
January's interim report set out five objectives: upgrading and modernising the UK's digital networks; encouraging investment in the digital economy; ensuring "UK content for UK users"; providing access for all to new digital technologies; and developing the skills needed to enable widespread take-up of public services online.
It also had 22 so-called action points; Carter's final report tomorrow will have twice that number, spanning everything from digital literacy and protecting children on the internet, to solving Channel 4's funding crisis and combating online piracy. Here are some of the main areas …
Broadband
Carter called for a new universal broadband commitment in his interim report: by 2012 he wants everyone in the UK to have internet access at the speed necessary for watching live TV. Currently almost 4m homes cannot get broadband at the 2Mb/sec speed he envisaged.
Who wants what:
Carter focused on the possibility of using the UK's five mobile phone networks to provide broadband in more remote parts of the UK, assuming that upgrading BT's existing lines would be too expensive. The mobile operators want him to free-up part of the so-called digital dividend – the part of the airwaves released when the analogue TV signal is switched off in 2012 – so it can be used for mobile broadband. Two of them – O2 and Vodafone – want to be able to use the spectrum that was were granted by Margaret Thatcher back in the 1980s for mobile broadband as soon as possible. Their rivals, however, see this as giving them an unfair advantage.
BT has been lobbying hard for government money to improve the nation's millions of miles of copper wire, arguing that the fixed-line network is the best long-term option for broadband. The company wants to use the digital switchover surplus from the BBC licence fee – the cash currently used by the corporation to help people migrate to digital television, which will be no longer needed when the analogue signal is switched off – to be freed up to pay for a universal broadband service commitment.
Getting either mobile or fixed-line broadband to every UK household, including the final 1-2% of homes in very remote areas, would cost billions, however. The satellite broadband industry thinks it could plug the gap but needs the government to underwrite funding for the launch of new satellites such as the planned Hercules satellite – which is due to go into orbit in 2011, at a cost of £500m. The actual kit may also have to be subsidised to bring it within the reach of consumers.
Likely result:
Carter is expected to use the digital switchover surplus to bring universal broadband access. However Kip Meek, the Digital Britain consultant charged with doing a deal with the five mobile phone networks in order to push 3G mobile broadband services beyond the 80% of the population already reached, has not yet managed to get a consensus. There are still sticking points about which operator can use which part of the airwaves and when Vodafone and O2 can launch their service – but a deal is expected within weeks.
Part of the digital dividend – the spectrum left over when the analogue TV signal is switched off – will be freed-up for the mobile phone companies. It will be sliced into three blocks with the mobile companies expected to gang together to buy up the spare capacity. Regional coverage targets will ensure that particular areas get a signal for the first time, allowing Carter to proclaim that he is bringing mobile phone services to every part of the UK.
With regard to universal broadband, BT is expected to be given the go-ahead to improve customer lines and will get the majority of the digital switchover money to push its fixed-line network into more remote areas. The universal broadband service, however, will only reach about 98% of the population – Carter is expected to say that satellite broadband can be used to reach 100% coverage, with the government and regional development agencies working in partnership to try and reduce the cost of such services. It is unlikely, however, that he will call for direct government funding of satellite broadband.
Carter's final report will also address the issue of so-called next-generation broadband networks. Virgin Media is already offering services at 50Mb/sec, while BT will next month start trials of its 40Mb/sec fibre-optic network with its ISP customers in North London. A range of technical changes is expected to be introduced that make it easier and cheaper to build next-generation networks, including opening up public infrastructure such as tunnels and ducts – and Carter will also clarify the complex rules that govern how fibre-optic networks are taxed under the business rates regime. There is not expected to be any massive injection of public funds in the creation of next-generation access networks, not least because BT recently announced it is speeding up the roll-out of its new network so it will reach a million homes by next year. But changes to the way that Ofcom operates – so that its remit includes encouraging investment – will be used to ensure heavy-handed regulation does not hinder the market's ability to develop next-generation networks.
Online piracy
Protecting the UK's creative industries from piracy was a main aim of the interim report – although Carter admitted at the time that this area of his thinking was the least well-formed. Since January he has been locked in talks with ISPs and the content industry, and has released a further consultation document which set out the possible role for a "rights agency" that would bring the two warring factions together.
Who wants what:
Put bluntly, the content industry, and especially the music companies, wanted blood. They were deeply heartened by France's introduction of the Hadopi law – a so-called three strikes system of warning letters before disconnection from the internet for up to a year – and wanted a similar system in the UK.
That law, however, has since fallen foul of the French legal system and more recently the content industry, particularly film and television companies, has been calling for "technical measures". Consumers believed to be illegally sharing copyrighted material would receive warning letters, but then would have their connection speeds slowed, rather than facing outright disconnection.
Several of the ISPs, however, do not want to have to police the internet. They believe that responsibility lies with the owners of copyrighted material, who should defend their own property rather than turn ISPs into collection agencies for big business. If internet companies are forced into policing the web, they have argued, then the content industry needs to pick up the tab through some form of levy.
The ISPs would prefer to see the creation of compelling legitimate downloading and streaming services backed by major content companies, providing consumers with an easy – and, most importantly, cheap – alternative to piracy.
The videogames industry, meanwhile, just wants Lord Carter to acknowledge that it exists – something he failed to do in the interim report. It has been lobbying for the government to introduce a more favourable tax regime to help counter a brain drain which has seen developers quit the UK for countries such as Canada. The games industry thinks piracy can be defeated through the introduction of online services and games that can only be played when connected to a central server which checks the authenticity of the product.
Likely result:
The government sees nothing to be gained this close to an election from making criminals, with no trial, of the estimated six to seven million people who have downloaded illegally copied material. Carter will not introduce a so-called "three strikes" system which results in people being summarily disconnected – instead he is expected to codify in legislation last year's memorandum of understanding (MoU) between several ISPs and the content industry, which resulted in warning letters being sent out to persistent illegal file-sharers.
All ISPs will have to sign-up to a new warning letter regime which will be backed up by "technical measures" that will see the worst offenders have their connection speeds reduced sharply. Exactly how those measures will work and what standard of proof and appeals procedure will be needed, will be the job of the ISPs and content players to work out through the auspices of the "rights agency" – although that will not, however, be its name.
Funding for the new body and regime will come from industry, although Carter is not understood to be in favour of industry levies on computer or internet equipment. But it will still be the responsibility of content owners – either individually or through their own trade bodies – to take any legal action against persistent offenders on whom "technical measures" fail to make any impression. The new regime, however, should deal with all but the most hardened file-sharer.
In parallel, Carter will also make another plea for content companies to create compelling legitimate online services. This summer will see, for instance, the introduction of subscription-based streaming music services from Sky and Virgin Media – and Channel 4 recently announced plans to put much more content on its 4oD platform.
As for the videogames industry, the government is looking at changes to the tax regime in the UK to prevent the brain drain of developers out of the country. Lord Carter's report is expected to say that the Treasury will introduce tax changes later this year. "We do recognise the importance of the videogames industry to the British economy. Research and development tax credits are available for the industry, and we are looking at introducing further tax breaks," the new culture secretary Ben Bradshaw said in the House of Commons last week. The report will also look at the way that videogames are classified and how effectively age ratings are enforced by retailers.
Media Ownership:
The local and regional media industry is in turmoil. Newspapers are being shut, jobs are being lost and the provision of local news is in a dire state as advertising migrates to the internet and the recession bites. In January, Carter announced plans to discuss potential changes to the rules governing the merger of local and regional media companies with the Office of Fair Trading, Ofcom and media companies in order to see whether the industry can be saved by a spate of mergers and consolidation.
Who wants what:
Local and regional newspaper groups believe scale is the only way to survive the recession – and they want to be able to swap assets as well as merge their businesses. Deals being considered include merging DMGT's Northcliffe with some of Trinity Mirror's titles in the Midlands, while Johnston Press could pick up some of its Yorkshire titles. Guardian Media Group, owner of MediaGuardian, is seen as an obvious ultimate home for other Trinity titles such as the Liverpool Echo. Newspaper groups are also expected to move daily publications onto a weekly print run to save costs. In fact tomorrow morning, Christopher Thomson, chief executive of DC Thomson & Co, Johnston Press chief executive John Fry, Carolyn McCall, head of Guardian Media Group and Trinity Mirror's Sly Bailey will appear before the culture, media and sport select committee to discuss "the future for local and regional media".
MPs want reassurance that consolidation will not lead to a reduction in local news provision, with newspaper proprietors aggregating their teams into central locations and ignoring outlying regions. Investment bankers in the City, meanwhile, are licking their lips at the prospect of the advisory fees that can be garnered from knocking the UK's four key regional news players into just two.
Likely result:
The Digital Economy Bill, which will be set before parliament later this year in order to implement Carter's proposals, will include a relaxation of the rules governing local and regional newspaper ownership. Some newspaper owners, however, will be disappointed by the final Digital Britain report. They had hoped that Carter would look at the issue of online aggregators, such as Google news, who do not always give them the opportunity to monetise the traffic around their content.
Channel 4/BBC Worldwide
January's interim report threw its weight behind a tie-up between Channel 4 and BBC Worldwide, instead of a merger with Channel Five, and the creation of a "new entity" with public service broadcasting at its heart. C4 had argued that its long-term survival was in serious doubt and that it faced an annual funding gap of £150m from 2012. The door was, however, left ajar for a potential Five deal.
Who wants what?
The idea of a complete merger between BBC Worldwide and C4 was raised early but the plan was considered wholly unacceptable to the BBC. The focus then moved to thrashing out a blueprint for some form of joint venture tie-up of assets. Five, which has experienced a 30% drop in advertising revenues year-on-year, is desperate not to be left out of the latest round of consolidation; Dawn Airey, the chairman and chief executive of Five, has vigorously promoted a tie-up with C4, an idea that failed to gain traction several years ago. Five's argument is that, with adequate protections around public service broadcasting, a merged entity could fit the requirements of Digital Britain.
John Smith, the chief executive of BBC Worldwide, told the House of Lords communications committee earlier this month that the partnership would include his business's UK assets, including its 50% stake in the UKTV pay-TV channels business, that includes Gold and Dave, and its 60% stake in the DVD business 2Entertain. The venture could also include the remaining 50% in UKTV held by Virgin Media, which BBC Worldwide is keen to acquire, and the 40% of 2Entertain owned by Woolworths.
The venture has focused primarily around leveraging "TV/screen-based assets", which might mean that assets such as the BBC's magazine operations are out of bounds. The door has been left open to include areas that fall under the nebulous category of "special interest", however. Ofcom, in its report on the future of public service broadcasting which fed into Digital Britain, also said that C4 could potentially benefit from a "one-off allocation" from the BBC's so-called switchover surplus to help shore up its finances to do deals.
Likely result?
Carter and the former culture secretary, Andy Burnham, have already begun managing expectations around tomorrow's report. Burnham has said not to expect a "tablet of stone" but "powerful seeds and ideas" from which the future of public service broadcasting might be shaped. It is understood that BBC Worldwide and C4 do not have a done deal on the structure of the new entity, and observers do not believe Carter will unveil a final blueprint. Carter is stuck between a rock and hard place, with any BBC asset-sharing that resembles state aid likely to lead to official complaints. This makes it likely that Carter will, again, give the go ahead to a C4/BBC Worldwide tie-up with a potential focus on how governance and ownership issues will be tackled.
Provision of regional news
ITV intends to pull out of providing the programming for a regional news service from 2012. What happens next could depend on what Carter's report says about the use – or not – of the £130m-a-year "digital switchover surplus" from the licence fee.
Who wants what?
The idea that regional news could be run by various independent news consortia was raised in Ofcom's public service broadcasting report. The consortia, which could see media companies such as STV, Reuters, ITN, PA or the Guardian Media Group deliver regional news, would be funded by between £40m to £60m annually from the licence-fee switchover surplus. There has been a tug-of-war of sorts over how this potential sum, which could be £250m-plus, might be used. Carter has indicated that it could help fund plans to achieve universal broadband targets.
The BBC has aggressively defended attempts to "top slice" the licence fee. Michael Lyons, chairman of the BBC Trust, has said that using these funds for projects beyond the BBC's public purpose would be an "act of bad faith" and "tantamount to breaking a contract".
Likely result?
The debate over what the switchover surplus should, or shouldn't, be used for is arguably less thorny than discussions over how it can be used. It has been argued in some quarters that for the switchover surplus to be used, Carter would need to look at somehow formalising a new governance and funding structure to allow it to be tapped.
In terms of where the money might be used, if it is freed up, lobbying for funding for the independent consortia plan has made headway against proposals to use the cash solely for broadband. Early indications suggested that the switchover funding could be split between the two plans, although some more recent estimates of the cost of a regional news service cast doubt over the ability to do this.
Richard Wray and Mark Sweney
Monday 15 June 2009 00.05 BST
guardian.co.uk © Guardian News and Media Limited 2009
