Digital Switchover: Communications Committee Report
Lord Fowler
That this House takes note of the Report of the Communications Committee on Digital switchover of television and radio in the United Kingdom (2nd Report, Session 2009–10, HL Paper 100).
Lord Fowler
My Lords, this is the last report of the Communications Select Committee which was under my chairmanship until the election. I take the opportunity to thank all the members of that committee for the support which they consistently gave me and for the wide experience that they put at the service of the House. I rode on the shoulders of a range of broadcasting professionals and other media professionals, including religious broadcasting professionals and irrepressible experts on the new media.
Given all the adventures we had setting up this committee —the noble Baroness, Lady Howe, will remember that—I am also extremely glad that it is continuing in this Parliament as it is an important committee and has a great role to play. My only sadness is that my successor as chairman—my noble friend Lord Onslow—is unwell. We all wish him a speedy return to the House.
The case for digital switchover in television and radio is basically the following. Digital broadcast uses less space in the spectrum than the equivalent analogue broadcast, more services are possible and the space freed up on the spectrum by switching from analogue to digital television broadcasting is in demand for other services. The same does not apply as far as radio is concerned. There are many new services. That is why television switchover has gone so smoothly in this country—the public can see the benefit. New programmes are open to them. They may still sit there of an evening wondering what exactly is worth watching, but the choice is there and the process has been managed so far, I think, without substantial hitch, bar one issue: that is, the help scheme for the elderly.
The predecessor of the Communications Committee, the Select Committee on the Royal Charter—one or two members of that committee are present—was in no doubt about how the help scheme should be financed. We said that it should come out of general taxation like other social security payments such as free television licences for the elderly. The then Government rejected that advice and insisted instead that it should be financed by the licence fee—a regressive tax. Our report shows the result. Rather than a 65 per cent take-up, which was the Government’s estimate, there has been a 20 per cent take-up. This has resulted in a likely underspend of between £250 million and £300 million. In other words, licence fee payers were charged too much, the BBC was deprived of income which could have gone to other programme making, and the previous Government slightly flaffed about trying to find something else to spend the money on. I hope that if there is a help scheme for radio switchover, at least we will learn the lessons of television and not raise the money in that way.
The main problems on switchover obviously concern radio. It remains a powerful medium in this country. It has defeated all predictions of its demise. Ninety per cent of the population listen regularly to the radio and it boasts some of the best programmes. On radio, the “Today” programme each morning is politically more important than any of its television rivals. Drama on BBC radio goes much wider than anything on television. Classic radio successfully challenged the view of the old controllers of Radio 3, who seemed to believe in the wide appeal of 15th century Mongolian chants. And—how do I put this?—some of us prefer the noble Lord, Lord Bragg, on radio on Thursday mornings to the noble Lord, Lord Sugar, on television on Wednesday evenings on BBC1.
Of course, the popularity of radio and FM radio is much of the problem as far as switchover is concerned. The public are well satisfied and they ask, not unreasonably, what the advantage will be of making the change. They know that they will get some new services—Radio 7 and 4 Plus come to mind—but, with the best will in the world, this is not on the scale of television. However, what they are also beginning to understand is that there will be a substantial cost to them for switchover—a financial cost and a cost in inconvenience. Of course they are absolutely right. The best estimates suggest that there are more than 100 million analogue radios in this country, all of which will become substantially useless in the new digital world. The public will get community radio, but precious little else. Thereby, families up and down the land will find that their ordinary FM radios have become redundant. Certainly, judging from my post bag and my experience, we are often talking about three or four radios in a household becoming redundant. If you have a hi-fi receiver and you want to continue listening to music on the radio—the Proms, for example—the cost of replacement is likely to be substantial.
That is not the end of the matter. There are about 33 million cars on the road. Virtually all have analogue radios and will require converters at an additional cost. As a broad rule of thumb, the position is as follows: by the time of the switchover, it should be possible for cars of less than five years old to have garage-fitted converters behind the dashboard and an external aerial. The cost to the motorist is likely to be between £75 and £100. For cars which are more than five years old, the prospect is that the converter would go into the glove compartment and, if you fit it yourself, the cost will be about £40 or £50. I emphasise that this is in addition to the costs of replacements in the home.
Therefore, there is no question that there is a substantial cost to switchover and a substantial cost to the ordinary person. That has never been made sufficiently clear to the public in the lead-up to this process. The inevitable question that arises is: should we go ahead? Is it worth it? To be honest, there are formidable disadvantages to digital switchover for the consumer. If there had been a referendum—we were debating referendums in the previous debate—I very much doubt whether we would have gone ahead. However, the previous Government decided that we should go ahead, for a variety of reasons—particularly the views of the radio industry. That is where we are and that is the position that the new Government have inherited.
The Government announced their policy on 8 July in a digital radio action plan. If I may carp to the Minister about just one point of that announcement, it was made not in Parliament and certainly not in reply to the Select Committee which had received a reply from the Government only a few weeks before. Anyone who looks at that government response will find it full of happy and pretty meaningless generalisations. It could have been written by our old friend, the noble Lord, Lord Davies. It probably was written by him and was inherited by the new Government.
The action plan was launched at an outside conference and not before the inevitable trailer in the morning, which allowed the Guardian to write that the Minister,
“will declare the government’s support for digital radio today”,
and that, in a speech in London, he “will say…”. In a previous report, the Select Committee said that it wanted to restore the influence of Parliament and that statements should be made here first, without trailers. It would be a vast pity if the policy of spin was to continue now that the noble Lord, Lord Mandelson, and Mr Campbell have left the scene. It would be a particular pity in this case, because the Government have had some very powerful arguments on digital switchover for continuing with the policies.
I pay tribute to the Government because they clearly took note of our report—particularly our strong advice that the public had to be taken with the process. The Minister, Mr Vaizey, said that 2015 remained the target date. However, he added:
“We will not switch over until the vast majority of listeners have voluntarily adopted digital radio over analogue. We will not switch over to digital until digital coverage matches FM”.
He believed that there would be benefit to the public in multichannel national radio in the same way as in television. To be frank, whether that is right or wrong there is one further and conclusive reason why we need to proceed. Many people have relied on the promise of the previous Government and bought new sets. More than 11 million digital receivers have already been sold, about a quarter of radio listening is already digital and, of course, the radio industry is preparing for the change. The motor industry is preparing to make digital radio standard in all cars by 2013. A U-turn in policy would run the risk of turning public confusion into an utter shambles.
Therefore, the committee agrees with the Government that we should proceed—but subject to a number of steps to help the process. Of these, by far the most important is public information—telling the public what is happening and sharing the knowledge that at present is too often confined to the radio industry and the Government. It is a matter for concern that the public are still buying analogue radio sets, not all of them necessarily cheap, when in a few years’ time the plan is to make those sets redundant. The retailers need to explain the position to their customers. It is also a matter for concern that the motor industry has not proceeded faster than it has. The standard fitting of converters by 2013 is perilously close to the 2015 target for introduction. Most new cars can have a digital radio as a fitted extra, and the advantage of that should be spelt out.
More and better information is very much of the essence, as is the development of a scrappage scheme, given that manufacturers and retailers are likely to have something of a bonanza as the switchover date comes nearer. I do not pretend that even with these steps the outlook for the future is perfect—and some will put it rather more strongly than that—but it will certainly be an improvement on what has happened up to now.
My last point is that in this area—again I pay tribute—the Government have not only listened to, but acted on, some of the recommendations in our report. That stands in contrast to what sometimes happened in the past. Earlier, I mentioned the help scheme for television. The previous Government drowned us in words of appreciation for our hard work and skill, and did precisely the opposite of what we recommended, with dire results. I will give another example. We opposed the setting up of the BBC Trust. Again, the previous Government thanked us fulsomely for our report—again, the thanks went on and on—and again they went ahead with a plan that is now almost universally condemned.
My point, as I leave this Select Committee, is that there is a great deal of practical experience on a committee such as the Select Committee on Communications. A wise Government will listen to that advice. I hope that this Government will continue on the path that they have begun, and I hope that they will give the advice the proper consideration that it deserves. I beg to move.
Lord Maxton
My Lords, I thank the noble Lord, Lord Fowler, for initiating the debate on our report. Perhaps more importantly, I also pay a sincere tribute to his chairmanship of the Select Committee for Communications in the last Parliament. He brought a great deal of expertise to the job and was always fair and tolerant in his handling of the members of the committee, even when they were the irrepressible advocates of the new media. I am sure that there were times when I tested his patience and good will, and there were times when we disagreed on issues. However, he always treated me with both tolerance and respect and I thank him for that. Lastly, I thank him for the fact that because of this debate I will be unable to watch Scotland playing Spain on television. That is something for which I owe him serious thanks.
This is a very thorough and thoughtful report, and already many of its proposals, as the noble Lord said, have been either recognised or implemented by the Government or Ofcom. The part of the report dealing with the switchover from analogue to digital television by 2012 is basically non-controversial—with the exception of the one issue that he raised—and it rightly praises those who are dealing with it. In passing, I note that the technology, even in this area of television, is changing rapidly. Sky is now showing some 3D programmes, which one can watch if one has a 3D television, and this may become the norm, particularly if it becomes possible to watch 3D without wearing awful dark glasses. If this happens, consumers yet again will be required to purchase new television sets. More importantly, internet televisions are now on the market, allowing viewers the ability to read e-mails and surf the web on their televisions from their armchairs using a remote control very similar to their present one. This will mean that access to a range of video sites will be available, which will allow viewers to watch programmes from around the world as well as catching up on all the channels broadcast in this country.
I am in some difficulty speaking second because—as I am sure those who served on the committee might expect—I am not going to follow completely the committee line on the major part of the report. Rightly, with the switchover from analogue to digital going smoothly, it is the much more controversial switch from the FM radios to digital sets using DAB that is the major concern of the report, on which I will concentrate the rest of my remarks.
As the noble Lord, Lord Fowler, said, the advantages of this switch are not as obvious as those for television. The lack of digital signals in parts of the country, the quality of the sound in some areas, the large cost to the consumer of replacing existing FM radio sets that, unlike TV sets, are redundant, and the cost to smaller community radio stations of obtaining access to the DAB spectrum, even if it is available, are all reasons why the switchover will be difficult. DAB is probably already out of date. DAB+ is being introduced in other countries in Europe, making DAB sets unusable when travelling abroad. As the noble Lord said, DAB radios are not at present being installed in cars, and it may be some years before they are standard. Lastly, the cost of changing the radio transmitters to digital for the last 15 per cent of the population, mainly in rural and remote areas, who at present get FM signals, may prove prohibitive.
Is this debate relevant? Is the only choice between FM radio or digital, whether through DAB or DAB+; or is there an alternative that will be more reliable, give greater choice and in the long run be cheaper? I believe that internet radio is that alternative. I use the term internet radio as shorthand for the ability to listen to thousands of radio stations and other sound streams from around the world using whatever device, mobile or stationary, is available to the listener. After putting this suggestion at a Question Time before the Recess, I received a letter from the noble Lord, Lord Shutt of Greetland. It would be easy to attack him for the ignorance shown in his letter were it not for the fact that the arguments he put were the same as those put by my noble friends who were Ministers in the previous Government.
The first point made in the letter by the noble Lord, Lord Shutt, is that internet radio listening is a one-to-one delivery system and, as the number of users increases, so does the cost to the broadcaster. I do not even begin to understand that point. I have put it to several people and nobody else understands it, either. Radio stations around the world stream their programmes on the internet, and they are available to anyone who wishes to listen to them and has the correct equipment. I cannot believe that the BBC would stream all its stations, both national and local, radio and television, on the internet if every time someone listened to them—and Ofcom research indicates that that could be up to 17 million people in this country daily—it incurred more costs. It would not do it, and nor would any other radio station.
The second argument in the letter is that broadband networks do not have the capacity for everyone who listens to radio to switch from FM or DAB to listening on the internet. Certainly, if everyone who now has a radio at home went out tomorrow and bought an internet radio, threw out all their other radios and listened only to internet radio, the broadband system might not be able to cope. I say “might” because I simply do not know. However, we are not talking about switching from FM to DAB in 2010 or even 2012. The earliest date suggested for even a limited switch is 2015, and many witnesses we interviewed did not think that even that was realistic.
Broadband capacity has increased enormously, while compression technology has also improved dramatically. I remember that in 2001, in the other place, I asked the then Secretary of State for Trade, Patricia Hewitt, how she defined broadband. Eventually—and it was eventually —she suggested that broadband could be defined as anything between 400 kilobytes and 2 megabytes. Now, less than 10 years later, 20 megabytes is the standard offering of nearly all broadband companies.
BT is on target to provide 100-megabyte cable access for 40-plus per cent of households. Virgin Media is already offering its customers 50 megabytes for a small extra charge and is experimenting with 200 megabytes. Other countries, such as South Korea and Japan, provide not just radio but all their television services down cable. Even in rural areas at the moment, 10 megabytes is not unusual. By 2015, it is inconceivable that the capacity of the broadband network will not have grown by more than enough to cope with it being the main provider of domestic radio use. After all, the Government are committed to ensuring that every household has access to broadband by 2012 and that 90 per cent of households will be able to access high-speed broadband by 2017.
So what about car radios, which account for some 20-plus per cent of radio usage? I proved to myself recently that you can get internet radio on your car radio probably easier than you can get DAB radio. As the noble Lord said, DAB requires the purchase of a specific, relatively expensive device to transform, not very successfully, your car radio from FM. Getting internet radio can be done with a cable and a smart phone with 3G capacity. I have an iPad, which will surprise no one. On it I have a radio app which accesses radio stations from around the world. I plugged my AV lead into the iPad and was able to listen to Minnesota Public Radio as my wife drove me along a motorway in Scotland. Okay, who wants to listen to Minnesota Public Radio? But the point was made. I was also able to listen to BBC Radio Scotland on my iPad while on holiday in Lanzarote.
What other advantages will internet radio provide? It will provide a massive choice of stations of course, a quality of sound at least the equal of DAB—and there are those who argue that it is actually better than DAB—and, once everyone has access to broadband even in the remotest rural areas, using the internet to provide high-quality radio may be both easier and cheaper than changing all the transmitters to provide DAB radio. I am no technology expert but surely providing radio, and indeed television, down a wire—either cable or telephone—uses less radio spectrum than listening to radio or watching television by terrestrial means. Nearly all households have a telephone at the moment and the Government are committed to ensuring that they all have access to broadband by 2012.
I believe that the Government need to look again at this issue before they embark on an expensive and possibly useless programme of introducing DAB radio.
Baroness Bonham-Carter of Yarnbury
Oh dear, my Lords, how does one follow that? I think that I shall just return to the words that I wrote earlier and not try to address the technological forest that the noble Lord, Lord Maxton, has sketched out.
I rise as someone who was a member of the Communications Committee when this report was published and when it was so ably chaired by a man whom I can now publicly call my noble friend—Lord Fowler. No more secrets and no more subterfuge about our relationship—there are good things about the coalition. On a serious note, I am proud to have been a member of the committee, and proud of the many other reports that we published under his expert leadership—a hard act to follow. I also thank our clerk, Ralph Publicover, Rita Logan, the committee assistant, and Papiya Chatterjee, who was our committee specialist. I thank, too, fellow members of the committee, many of whom are here. It was a very convivial group and I hope that the right reverend Prelate the Bishop of Manchester has not taken personally the exodus of the Liberal Democrats from the Benches around him.
The report that we are debating today is about the digital switchover of television and radio. Like, I suspect, most people this evening, I shall concentrate on radio.
In 1922 when the British Broadcasting Company was set up, it transmitted only radio of course and it had a staff of four people. That admirable series “A History of Modern Britain” had wonderful footage of those pioneering days, when the only choice for listeners appears to have been in the sole gift of a Captain Eckersley, who would, using the words of the presenter Andrew Marr,
“trundle his piano from his local pub to an equally local army hut from which he would perform to the nation”.
Those days when choice for listeners was confined to one man’s piano repertoire are long, long gone, and the advent of digital television and radio means change as fundamental as when Lord Reith got rid of Captain Eckersley.
The digital switchover of television is under way, running, it appears, without major problems and to time. Of course London—by far the biggest challenge in terms of numbers—does not switch until 2012, the crucial year of the Olympics. However, one of the factors to have helped with the TV switchover has been the large number of people who, one way or another, already have digital television services, and that number will no doubt be even higher by 2012.
Therefore, where television is concerned, the technology, and the expansion of choice that it has given, has been embraced by viewers. I believe—here I think that I probably differ from my noble friend Lord Fowler—that the same benefits of increased choice and new, innovative ways to enjoy content can and will be equally popular with radio listeners, and that is what the switchover to digital radio will supply.
Our report warned of the potential danger of a very different reaction to radio switchover. My noble friend Lord Fowler went so far as to say that he thought it might cause a “major row”. I do not think it is necessary for it to cause a major row. The most important thing to come out of our inquiry was the need to allay the confusion that surrounds digital radio switchover among the public and the sense of uncertainty within the industry. Witness after witness appealed for clarity of both purpose and information, and called for the Government to make the case for switchover.
In July, on launching the government/industry Digital Radio Action Plan, the Communications Minister, Ed Vaizey, made a firm commitment that the future of radio was digital and that the Government would indeed lead in the drive to overcome the remaining barriers to switchover. The Minister believes that it should be radio listeners,
“who will determine when [digital switchover] can happen through their listening habits and purchasing decisions”.
This was welcomed—not surprisingly, exuberantly—by consumer groups, and indeed the opportunity provided for consumer representatives to be actively involved in the process is absolutely right. I think more thought should be given to setting a date and I am sure there will be as we proceed. Talk about a target but not a commitment worries me. Perhaps we are trying to be all things to all pressure groups when in the action plan we say:
“the timetable for the delivery of the Action Plan supports a target switchover date of 2015 as a target which all parts of the industry can work towards ... However, there should be no conflict between the timetable and the switchover criteria. When the decision is made to set a firm date for digital switchover, it will be the criteria, not the timetable, which take precedence”.
I am not sure what that means and it is the kind of paragraph that should not be included in an action plan.
My concern is that there may be a horse and cart problem. Retailers have to be convinced that we are genuinely moving toward switchover before they will stop selling, and indeed marketing, analogue radios to people who need to be convinced before they stop doing what they are doing now, which is still buying them in their droves. Car manufacturers are still fitting analogue radios in new cars which, it is said, will stop by 2013, but will it if 2015 remains a target caught between timetable and criteria?
It is greatly to be welcomed that the BBC is increasing digital coverage from 85 per cent to 92 per cent by 2011, through the installation of 61 new national DAB transmitters. However, the fact is that uncertainty is not an incentive for investment in new technology, or for that matter in content which is so much part of the bonus that digital radio will bring.
Another big concern we encountered was about FM, and I am sure we all welcome the decision to retain FM as a platform for small, local and community radio stations. Also a precondition of switchover is the extension of digital radio multiplexes to match that of FM, which means that all existing stations that want a digital future will be able to have one. But there is no point in being able to get digital radio if most of us find it impossible to access and use. Here I agree with the Consumer Expert Group that,
“the emphasis should be placed on improving basic usability, rather that the advanced functionality of digital radio to encourage take-up”.
In other words, digital radio needs its own version of the electronic programme guide which allows the viewer to navigate their way easily among the myriad choices on offer through digital television. For the blind and partially sighted—this is not the case for television—that needs to incorporate voice recognition. Returning to the matter of FM, fears about local stations being sidelined can be allayed if the technology that allows seamless switching between analogue and digital continues to be developed.
Finally, I turn to the help scheme. Radio, perhaps even more than television, is of huge importance to the old and the vulnerable. For 91 per cent of the blind and partially sighted, listening to the radio is their favourite pastime. I think we need assurance from the Minister that the Government will implement a help scheme similar to that in place for television switchover. Although the take-up, as my noble friend Lord Fowler mentioned, for the television help scheme was much lower than anticipated, it has been crucial to those it did help.
The evidence about the implementation of the TV switchover help scheme was that it has been largely successful, but inevitably problems have been encountered, things have been learned and there are improvements that can be made. It is axiomatic that the experience of the TV switchover help scheme should be the foundation of the radio switchover help scheme.
I wish to mention a couple of specific points that emerged from evidence we took. The help scheme should be advertised nationally from the beginning, alongside the information campaign for switchover, rather than regionally as it is rolled out. In general, there is a need for greater co-ordination between the help scheme and the digital outreach programme— the latter is run by a partnership of voluntary organisations—particularly in regard to post-installation support, which it is felt needs to go on for longer than under the television scheme. Under the previous Government, the transition to digital for radio was characterised by drift and more drift, but under this Government and their Minister Ed Vaizey, I believe that there is recognition of the need for clarity and for certainty.
Baroness Howe of Idlicote
My Lords, despite the late hour, I am glad that your Lordships’ House has had this opportunity to review the progress made towards digital switchover, both for television and radio, since our committee’s report was published in March and in light of this Government’s or the previous Government’s reaction, which was produced in June.
Today the noble Baroness, Lady Rawlings, has already heaped paeans of praise on the noble Lord, Lord Fowler. The terms of office of the noble Baroness, Lady Bonham-Carter, and I as members of that Select Committee ran out at the same time as that of the noble Lord, Lord Fowler, although I claim the right to say just how privileged and lucky we were to have him as our excellent chairman from the time we fought—and we did fight, as the noble Lord, Lord Fowler, has already mentioned—to have such a Select Committee established in your Lordships’ House. Without any doubt, the background of the noble Lord, Lord Fowler, steeped as it has been in the media world, was of immense value to us all in the work of the reports that we have undertaken. I stress that that will be sadly missed in the work that the committee will be undertaking in future.
Today, I want to spend my time on two issues—probably the same issues as the noble Lord, although my views may be slightly different. The first is the progress that has been and continues to be made as we move towards the final phase of TV switchover in 2012 and, secondly, on the longer timescale envisaged before radio digital switchover takes place. The first thing to say on television is that progress has clearly been made since our report was published and has speeded up since the Digital Economy Bill became law. One illustration of that is that our report estimated that by the end of March, about one-fifth of television viewers would have switched over, whereas Digital UK tells us that, by Christmas this year, it will be one-quarter of all UK homes, which is 7.1 million homes. It is fair to say that most TV viewers have more than accepted the added value that digital will bring to their TV watching. When buying new sets—and that is still happening a lot—and other equipment, they are certainly alert to the technical as well as the other benefits that the industry continues to place in the marketplace.
The outreach programme, albeit within the limitations outlined by the noble Lord, Lord Fowler, is, I would have thought, doing pretty well. Digital UK has now commissioned DOL with a total of £6.7 million to complete the cost of its work until the last switchover action is complete. What has been achieved in those regions which have already switched over is, I would argue, value for money. Its approach, as switchover reaches the region, is to brief and embed necessary switchover messages into the routine work of well known and trusted local, voluntary and community-sector organisations. I understand that the new culture Minister, Ed Vaizey, remarked at Digital UK's AGM, when congratulating the voluntary sector on the vital role that they were playing within the DOL scheme, on how well that reflected the Government's big society approach and that this could be a model for other major public change projects. I think it fair also to say that the outreach programme has proved effective in helping large numbers of people, including potentially vulnerable consumers and citizens.
On the digital radio front, it is generally agreed that the point of national switchover to digital will take longer to achieve and, above all, must reflect the consumer/citizen belief that digital radio has reached the stage when it would produce a greater quality as well as a greater variety of radio programmes. As we have heard, our report recommended the 2015 date, if those aims were achieved, and that continues to reflect the majority view of the organisations that have written in. However, although more action is and will be needed, we should not forget, as the Government’s Digital Radio Action Plan reminds us, that the UK is nevertheless the current world leader in take-up of digital radio. About 11 million sets have been sold to 35 per cent of UK households, with digital listening accounting for 24 per cent of total listening in the UK. Surely we do not want to lose that initiative of being a world leader.
Equally, as Ed Vaizey has said, certainty for the sector and consumers is key to unlocking potential and building confidence in a digital future for radio. Thus, we already know that switchover can be made only once 50 per cent of listening is to digital, national DAB is comparable to FM, and local DAB reaches 90 per cent of the population and all major roads. It is indeed good news that the Society of Motor Manufacturers and Traders expects its members to put digital radios in all new cars by 2013, and quite a number of them are doing it already. Clearly 2013 will be crucial as the target year for those—Ofcom, broadcasters, manufacturers, retailers and consumer groups—working together with Government to meet the conditions necessary if it is to be agreed that switchover will happen two years later in 2015.
I hope that the Minister will be able to give us some up-to-date information on how all this is progressing, what remaining funding gaps—which have been pointed out—need to be financed and, in particular, whether the funds needed for the remaining required build-out of the national, regional and local digital infrastructure have been agreed and, if so, who will provide them and pay for it. I believe there are ongoing government discussions with the BBC about funding local digital coverage. If so, can the Minister tell the House when the Government expect to be able to make an announcement on this?
One other recommendation our report made was that a help scheme with special focus on disadvantaged and special-needs groups should be set up through general taxation, as has already been noted, and that it should not be financed out of the licence fee as happened with digital TV. The potential importance of such a scheme for radio switchover must clearly remain on the agenda. We have already heard that the blind, the partially sighted and others will be disadvantaged if they are not helped with these added methods of accessing the digital future on radio in the way that they will need to be helped. Perhaps the Minister will be happy to give us some up-to-date insight on the strategy on this.
The Lord Bishop of Manchester
My Lords, it has been an enormous privilege to have served on the two Select Committees that have been so graciously and knowledgeably chaired by the noble Lord, Lord Fowler. His ability to enable amicable agreement on a range of matters between atheist, humanist and church members has been remarkable. Without exception, the reports that he has overseen have always been enhanced by his experience and expertise and have been of a very high standard. I agree with the noble Baroness, Lady Bonham-Carter, about the conviviality of our meetings, although all I can say about her reference to these Benches is that tonight they are a lonely place. I join noble Lords in wishing the new Select Committee well under the noble Earl, Lord Onslow. I am very glad that my friend the right reverend Prelate the Bishop of Liverpool, who cannot be in his place tonight, is a member.
As the noble Lord, Lord Fowler, said, the switchover to digital television has, on the whole, been successful. By contrast, the issues facing the radio industry, as the Select Committee report indicates, are much more complex. While the Government’s digital radio action plan and last month’s consumer expert group’s recommendations are welcome steps forward, the case for digital radio switchover still needs to be more compelling if listeners are to be persuaded. The BBC’s Trust’s July appeal in its strategic review for greater clarity from government in terms of overall policy and the active involvement of the BBC and the commercial sector has clearly been heard. Indeed, many of the Select Committee’s carefully argued recommendations have been reflected in the action plan, but there are still areas that require robust perseverance if all this is to be the way forward.
Even though much has been said and written about DAB, a far clearer articulation is needed to communicate effectively and widely that, as part of a multi-platform radio ecology for the future, the UK is now committed to DAB as the digital standard. I hear what the noble Lord, Lord Maxton, said about DAB+ and there is a real need for clarity to help people to understand why it is, if it is to be so, we remain with DAB. I also noted with interest his points about the internet. I recall that when we first sat together on a Select Committee he told me that it would not be long before I would be listening to radio and watching television on my computer. I did not believe him. Scarcely a day goes by now when I am not doing those very things.
Another key part of the mixed ecology is, as other noble Lords have said, the continuance of FM. I welcomed the assurances by the Government on the future of FM when the action plan was launched. In the Committee stage leading to the Digital Economy Act, I made a number of interventions to stress the fact that smaller, local stations, many of which serve their communities extremely well and for which it would be economically unviable to go digital, need to have the security of knowing that the FM band will be open to them for the long term. I very much hope that the assessment, to which the plan makes a commitment by the end of 2012, of the role and character of the small, local and community stations remaining on FM will bear in mind that the FM band could continue to provide a critical platform for small stations, which not only serve geographically defined areas but identity-defined and interest-defined groups as well.
I am glad that the tripartite report from the BBC, Digital Radio UK and RadioCentre recognises that. Although some of those stations may decide to move to digital and expand their coverage, others for very good reasons will need to remain on FM. Those stations are vital to forging the togetherness of local communities, promoting local social action and encouraging democracy. They need to know that their platform is secure.
The radio sector has arguably suffered from some past political ambivalence over the best way to proceed with switchover. The action plan’s emphasis on a consumer-led process and a range of criteria, placing the onus on the sector to provide world-class digital radio programmes and woo the listener, is surely a sensible way forward. It is certainly preferable to the rigidity of the former 2015 timetable. The noble Lord, Lord Fowler, quoted the Minister on this. Saying that we will support switching off analogue, but only when the vast majority of listeners have already switched over to digital, strikes me as the right approach for the Government. Therefore, the important thing would be for the radio industry to recognise that and to act on it.
If broadcasters deliver great radio content on the digital platform and let listeners know that it is there, people will buy the receivers and tune in. Making the case for switchover compelling for consumers will reduce considerably the amount of resourcing required for public information and the switchover help schemes, although not of course completely. As the noble Baroness, Lady Howe, said, there are and always will be vulnerable listeners, including the elderly and disabled, who require help and who must not be overlooked. On that, I stress the importance of the switchover help scheme and the points made by the noble Baroness, Lady Bonham-Carter. It was also interesting to hear the warnings given by the noble Lord, Lord Fowler, in relation to the TV help scheme experience.
However, none of this emphasis on a consumer-led transition should be an excuse for delay in the Government, the BBC and commercial radio partners exploring together further arrangements for significant investment in the transmission infrastructure for national and local DAB radio. People will not tune in if there is nothing to tune into. And even with the BBC’s plans for 61 new national DAB transmitters by the middle of next year that will take coverage to just over 90 per cent of the population—almost 100 per cent within the M25—it would still require several hundred new transmitters to reach the final small percentage of the population. Radio, in particular, provides a very important sense of connection for those in the remote and isolated rural areas, and the truth is that we still do not know when some of the more inaccessible parts will be reached with a reliable digital signal. So there remains much to do on the pathway to a digital upgrade, and the matter of car radios has also been mentioned by several noble Lords as a good example of some continuing confusion.
I welcome the fact that the Government are adopting a detailed, determined and far more pragmatic approach. The noble Lord, Lord Fowler, was absolutely right to emphasise that better communication about the benefits of going digital is required. Perhaps the Government will produce an action plan plus that seeks genuinely to provide incentives towards and enable digitalisation without bankrolling the industry. The plus would involve investment, perhaps through long-term state loans or even—and I was present during the short debate on the licence fee at Question Time—a licence fee settlement that reflects the cost of building up the network to extend coverage at least to match that of the current FM map.
Whatever the solutions, none of the problems around the digital switchover for radio is insurmountable. Continuing contributions from the new Select Committee, concerted efforts by the broadcasters—BBC and commercial—creative responses from radio manufacturers and a convincing lead from the Government which remains sensitive to the human issues may, if properly co-ordinated, lead to a mixed radio ecology of which this nation could continue to be rightly proud.
Lord Inglewood
My Lords, I should declare that I was a member of the Communications Committee in the last Parliament and that I am chairman of the Cumbrian Newspaper Group, which has some radio stations. I cannot speak for other members of the committee, but when I left for my summer break I put the affairs of the media as far as work in this House is concerned entirely out of my mind, so that when I came back and turned my attention to writing a speech for this evening, I forgot entirely about television. The reason for that, as noble Lords will have gathered from my earlier comments, is that I live in Cumbria, which is part of the Border TV region. We have already had digital switchover up there and, as far as we are concerned, it is all history. I think it is true to say, speaking as an individual, for my neighbours and from the evidence we have received from the experts, that it has been a great success. It has happened and it has worked. What is more, it seems to have worked considerably below budget.
In 1996 and 1997 when I was Minister for Broadcasting, I recall asking one of the officials, “How are we going to do this? We have said that we are going to turn off, so what will happen?”. Everyone was rather lost, so I said, “Oh well, we will have to fill their mouths with gold”. We have done it, and it has worked even by not giving them very much gold, so it has been a considerable success.
As has been said by others, the important point for radio is that the experiences of television provide a good basic template for a similar process for radio, even though they are not entirely the same. We are right to go ahead with digital radio, even at its lowest level. The world moves on—and it is moving on into the digital era. I see the noble Lord, Lord Maxton, shaking his head and I shall come to his point in but a moment.
The question then is: how do you take it forward? We are at a point where decisions have to be made about whether or not to go ahead with digital audio broadcasting—DAB. I believe that it is right that we should go ahead with it. Some of the debate about whether it should be DAB or DAB+ was coloured by commercial considerations. However, the important thing as far as that is concerned is that the multi-standard chip becomes compulsory. This would allow the simple DAB to evolve into the DAB+ system if that is appropriate.
A number of noble Lords asked about FM and it is right that we should deal with it. There is a whole range of different radio stations—smallish and medium-sized commercial stations and community stations—which will not be able to find a place on digital as it is currently conceived. Exactly what the future for them is I do not know. I have a suspicion that the noble Lord, Lord Maxton, is right and that the moment will come when the existing FM transmitters need replacement and it is likely that these stations will move directly to broadcasting on the internet.
A number of your Lordships mentioned the importance of the timetable for taking forward this process. I can corroborate that because once the television industry was given fixed timetables it then came forward with sets, and when it was done on a large scale the unit costs declined substantially.
However, unlike television, the radio industry has had a series of problems thrown up by car radios. It is right that emphasis is being placed both on ensuring that conversion kits are available at a sensible price and that services such as traffic reports, which are important to motorists, can be received via the digital systems. However, we should remember that if you can afford a car, you can afford a radio to put in it. To put the question of costs into proportion, a digital radio does not cost much more—indeed, it will shortly cost less—than a tank of petrol.
As to the role of consumer groups, one of the great developments since the end of the Second World War has been the rise of the consumer lobby. This has been to the advantage of everyone. On the other hand, one of the lessons of the TV digital switchover is that people are much more adept in the use of changing technology than the prophets of gloom might suggest. Almost by definition, one of the characteristics of the consumer lobby is that it looks for every possible difficulty because that is where it sees it should be coming from. The lesson learnt from the rollout of digital TV and, more generally, from the way in which the electronics industry has developed, is that the industry has been extremely revolutionary. It has introduced systems of controlling these magical devices—they are magical to me—which enable relatively simple people like me to deal with them. I believe that giving the manufacturers confidence will lead them, from their own perspective of self-interest, to find ways of enabling people both to afford and to use the means of locking into the new technology.
As a number of noble Lords have already said, this is the final debate on the previous Parliament’s Communications Committee. I add my thanks to the noble Lord, Lord Fowler, for the way in which he led us, respected our views and enabled us to have a convivial time. I am not sure whether anyone else has said this, but I suspect that he did so in such a way that he got his own way most of the time—and that is the highest accolade you can give a chairman.
Lord Gordon of Strathblane
My Lords, simply because the evidence has been bound into the volume with our report, it looks a more daunting read than it really is. I hope that that does not put off some of our colleagues in the House, because we are all listeners and viewers and digital switchover will affect us all. It is very important that this House at least is well informed as to the effects of digital upgrade, particularly on the radio sector, which I shall concentrate on.
It has already been pointed out that in television everything seems to be going well. In a way, it is not surprising. The digital offer in television is a distinct improvement on radio; there are more services; and the public wanted more than five digital services. The cost of conversion is about 10 per cent of the cost of a set, which is buttons. More than that, the Government made money by selling off the surplus spectrum, so everyone was happy. That should not, however, stop us from acknowledging the very good work done by Digital UK in ensuring that it has all gone quite as smoothly as it has so far. I hope that continues.
By contrast, there is absolutely no evidence that the public wanted any more radio stations—indeed, as I shall shortly indicate, we have far too many at the moment. The Government get no money from selling off the spectrum, and the cost of converting an analogue radio set—as has already been pointed out, there could be as many as 100 million of them in this country—is pretty well the same as buying a new digital radio set.
So let us examine how we got into this position, for I concede that the case for digital switchover in radio is not nearly as strong as it is in television. Let us go back to the Broadcasting Act 1990, which introduced the great concept of licences being auctioned off. Smart operators such as my noble friend Lord Macdonald, who is sitting along from me, very sensibly bid about £2,000 for STV’s licence. Other people chipped out many millions of pounds and have been feeling the pinch ever since.
There was however a public outcry at the idea of auctioning off television without a criterion of quality threshold. So a quality threshold was introduced for television but not for independent national radio. This meant that independent national radio licences went to the highest bidder. The reason that it was not a pop station was because the House, on the recommendation of the then IBA, said that it would not be. When asked how he defined “pop”, the noble Earl, Lord Ferrers, who was then the Minister, said, “Thump, thump, thump”. It was a very apt description. Showtime won the licence, bidding over £1 million more than Classic FM. It was awarded the licence provided that it could raise the money by 16 August 1991. It failed to do so, however, so the licence went by default to Classic FM.
It is fair to say that the IBA, and subsequently the Radio Authority, was quite proud to be allowed to regulate Classic FM. It was the sort of thing you could talk to your friends about. Their wives might admit that they listened to commercial radio as distinct from saying, “I think my cleaner sometimes listens to it”. The authority was very anxious to ensure that that Classic FM would survive. Given that its licence would be up for auction in a few years, all that somebody had to do was come in with £5 more than Classic FM’s bid, whatever rubbish they were going to broadcast, and they would get the licence. So the authority came up with the wheeze of suggesting to the Government that the 1996 Act include provision for digital radio and extend the licence of any broadcaster who agreed to broadcast on digital.
I was one of those operators at the time—I regret that it is no longer an interest since my company was acquired in 2005—who, like everyone else, said, “Yes, extend our licences for 12 years and, of course, we’ll run a second digital transmission system”. We regarded it simply as a tax worth paying for the security of having one’s licence, and nobody did very much about it. It is easy to blame politicians, but the honest truth is that the radio industry did not do much about it.
If we fast forward to 2008, a report came out—a report that was unpublished until ours came along—stating that the actual benefit from digital switchover would not appear until 2023. By 2008, the situation for commercial radio had changed out of all recognition. Audience levels were down, advertising revenue was down and commercial radio’s share of listening was down. With about 130 stations, commercial radio used to enjoy a majority of listening. It had 51 per cent and the BBC was privately prepared to lose share down to 30 per cent. The Radio Authority and subsequently Ofcom licensed more and more radio stations so with three times the number of radio stations—390—commercial radio’s share dropped as it now is to 41 per cent.
A real problem faces commercial radio but at this hour I will not indicate the remedy. It involves a change in the ownership rules. The Government are signed up to that, as were the previous Government, and that will make a difference. Without that, frankly, the future is fairly bleak. We are in a difficult situation and one thing that can be said with absolute certainty is that the independent sector cannot afford two transmission systems. We heard evidence. For example, Michael Betton from Lincs FM said that supporting two transmission systems would literally be the difference between staying in business and going out of business. What do we do? Do we say that we will abandon the digital experiment and say “We’re very sorry all you people who bought digital sets when we told you it would be a good idea. We’ll just forget about it”? The general feeling in the radio industry is that radio cannot remain an analogue island in a digital world. Although the benefits are not huge, we must go ahead with switchover and make the best of it.
The noble Lord, Lord Carter, was right to set a target date and say that we were pressing ahead. More has happened in the 10 months since Digital Radio UK was set up in response to the target date of 2015 than happened in the previous 10 years. At last, the radio industry has geared up and things are happening. Motor car manufacturers are guaranteeing that they will have digital sets by 2013. That would not have happened if the Government had not given a firm date. As various speakers have said, we all need certainty, particularly those who have been asked to invest large amounts in retooling plant and equipment to install digital radios.
Although I fully endorse the decision to press ahead with digital, like other members of the committee, I believe that it should be done provided certain other things happen. The first thing that I would agree on is a big expansion in coverage. I do not like phrases like 90 per cent simply because I usually end up being part of the 10 per cent. Even 92 per cent sounds great, but I will guarantee that the remaining 8 per cent of the population covers large parts of Britain geographically. Rural areas tend to do that.
Universality of provision is a key ingredient in public service broadcasting. Let us remember that we extended terrestrial television coverage at huge uneconomic expense because we thought that it was something that every citizen should have. We must have the same attitude to digital radio and, I say in deference to my noble friend Lord Maxton, with regard to broadband provision throughout the country. I am very worried about all the high talk of 20 megabytes and 100 megabytes in the city and, frankly, 2 megabytes, if you are very lucky, in rural areas. That would increase the digital divide and it will rule out living in a rural area in a few years’ time unless we really motor on this and start to provide wide broadband coverage throughout the country.
The next point we insisted on was that something was done about cars. It has already been pointed out that there will be 20 million old cars without digital radios. Having talked to the digital people yesterday evening, they think that the cost of re-equipping a car when it goes in for an MOT will be around £70 or £80. That is not cheap, but perhaps it is bearable.
The other thing is to have a sensible disposal programme for the useless analogue radio sets. To be honest, I think that we are all right on the DAB versus DAB+ argument. If the Government’s ruling is that all sets must incorporate the multichip that will adapt to all services, I think that we are covered on that.
This was my first full report on the committee. I joined part the way through the previous report on the film industry. I thoroughly enjoyed my time on the committee under the chairmanship of the noble Lord, Lord Fowler. I greatly valued the assistance that we had from our Clerk and his assistant, Ralph Publicover. The noble Lord, Lord Fowler, was an outstanding chairman. He not only guided us through the meetings, but his contribution to the writings of the report went far beyond the call of duty and the House is greatly in his debt.
Lord Clement-Jones
My Lords, congratulations are due to the noble Lord, Lord Fowler, on two counts. First, I congratulate him on the production of a very impressive report by the committee that he chaired—and I can say that not having been a member at that time of the committee. Secondly, he is going out tonight with something of a bang, with his introductory speech. Certainly, when his report was published it caused quite a stir. The key quotation was:
“The Communications Committee of the House of Lords says there is ‘public confusion and industry uncertainty’”.
That was widely picked up. Then the noble Lord, Lord Fowler, was quoted by the Minister at the very beginning of his speech when he launched the digital radio action plan this July. He said,
“to quote Lord Fowler from earlier this week digital radio switchover could cause a ‘major row’”.
This report has certainly made quite an impression, not only in public but also in ministerial minds. We have had a very interesting debate tonight. I took the criticisms in the report as being largely of the process, not of the concept of switchover. I was extremely interested to listen to what the noble Lord, Lord Fowler, had to say. Although a lot of scepticism and doubt was expressed, at the end of the day his and the committee’s view seemed to be that we should nevertheless go ahead with radio digital switchover. Clearly the criticisms have been taken into account by the new Minister responsible and by Digital Radio UK. I did not have the benefit of listening to the evidence that the committee took in its deliberations last year and earlier this year, but I am an unashamed enthusiast for digital radio. By that I mean that I see the problems, in the words of the right reverend Prelate, as being surmountable. Essentially, the glass is half full.
I shall not enter the lists with the noble Lord, Lord Maxton, but although I listened with great attention to his extremely interesting speech I do not believe that internet radio is necessarily the means by which we shall listen to the radio. It is an extremely valuable alternative, particularly for travellers with their iPhones and iPads—and I am the proud owner of an iPad, like the noble Lord—but I believe that digital radio has many advantages beyond those of internet radio. I understand the industry technological and cost arguments, but above all I believe that quality and convenience for the consumer must be the key factors in switchover—and I think they are there, with the sound quality, the ease of switching stations, the ability to time-shift and record and with the sheer variety of stations. Here I disagree with some noble Lords, who seem to believe that we have quite enough stations already. The fact that some of our very popular regional stations can go national is a major plus for digital radio.
Consumers are becoming much more engaged in the process. Let us take the rescue of BBC 6 Music, for example. I do not know how many listeners it had before the campaign started—probably about half a million—but the campaign actually raised the number of listeners to 1 million over a period of time. I am pleased to have taken a small part in the campaign to rescue 6 Music, which shows that digital radio stations are building real loyalty among the public.
The committee, however, was right to point out some of the key flaws in the process and to seek assurance on them. Let us take a few of the major criticisms: the question of information for and communication with the consumer and the lack of public understanding; the need for help schemes to be in place by the beginning of 2012 at the latest; and the fact that the Government should make it clear that DAB should be the standard. Much of this has been met by Ed Vaizey in his announcement and by the digital radio action plan launched in July. He confirmed that the target switchover date will be before 2015; that digital will need to cover the equivalent of FM—that is, at least 90 per cent; and that more than 50 per cent of households will need to have access to digital radio. Those are crucial conditions and, as many noble Lords mentioned today, that consumer-led process is vital.
I disagree with some noble Lords—I believe that this actually builds on the policies set out in the Digital Britain White Paper. I think it was the noble Lord, Lord Gordon, who mentioned the noble Lord, Lord Carter, but he needs to take some credit for having set the ground rules and for the way in which we are proceeding. I believe that this is not a discontinuity of approach but very much the continuity of it. I hope that the noble Lord, Lord Evans, will espouse the same continuity when he responds from the opposition Benches.
We now know that under the digital radio action plan there will be a strategic marketing and communications plan which meets some of the criticism about public communication, and that a study will take place on the merits of putting a help scheme into place. That is rather more mealy-mouthed than many of us would want to see. As we have heard, however, proper assurance is being given that new cars will be fitted with digital radios from 2013 and there will be affordable conversion kits. Once they are available in bulk the price of those conversion kits might even fall to £65 rather than the higher figures that some noble Lords have mentioned.
It is also now clearer how better coverage of over 90 per cent, up from the current 85 per cent, will be achieved by the installation of new transmitters. As for DAB+, it is also much clearer that DAB will remain the standard. We heard about the necessity of multistandard chips from the noble Lord, Lord Inglewood. Crucially—this was an important issue when we debated the Digital Economy Act—there is also a much clearer future for FM radio and a much better understanding of its role. For the foreseeable future, FM will remain as a delivery channel of choice for local and community radio. The Minister could not have been clearer when he launched the action plan and said,
“we will not switch off FM. FM will remain a platform for small local and community radio … as long as these services want it”.
Now, that was pretty unequivocal and extremely welcome.
I am very glad that UTV—which lobbied very heavily on the issues covered in the Digital Economy Act, and was sceptical about the whole principle of digital switchover—is now essentially on board with the digital switchover strategy. I believe that the commercial radio industry is very much on board with it as set out in the action plan. It is also clear that progress is being made on the single receiver and platform-neutral tuning, as the committee wanted. In summary, I am strongly supportive of the new—or perhaps I should say restated—strategy.
However, some questions remain, and they derive mainly from the consumer expert group report published in September. I very much hope the Minister can give a response to some of the ideas in that report, which suggested that a firm digital switchover date should be set only when 70 per cent of listening is done on digital. That is quite a high hurdle and I will be interested to hear what the Minister says about it. Is an independent body required as the key information provider on digital radio, as it states? Then, there was the issue that my noble friend Lady Bonham-Carter raised. There must be accessibility in the development of usability features on equipment for the disadvantaged. Then, crucially, and many noble Lords have mentioned this in the course of the debate, there is the need for consumer support through a help scheme for vulnerable listeners, not an optional extra but a vital element of the whole process. Will the Government go ahead with a help scheme? Will they then commit to funding it to fairly modest levels—I think that the quotes for this have been £5 million or £6 million—and will it be provided through general taxation? Those are key issues.
Lastly, will we build on the positive experience with the voluntary sector on digital outreach, with the help scheme for digital television switchover which has proved such a great success? I very much hope that digital radio will build on the success of that. We have momentum for digital radio switchover, but there are still some important issues to resolve. I look forward to the Minister’s reply.
Lord Donoughue
My Lords, in welcoming this excellent report on a highly complex subject, I wish to focus briefly on the aspect of digital radio, which has exercised others today, and on which the noble Lord, Lord Fowler, spoke so well. I also thank him for the fine work that he did as the chairman of the committee.
Here I should declare a passionate interest—a lifetime of listening to music of all kinds. As with millions of other music lovers, I listen often on the radio, and the quality of the sound matters enormously. The Proms are best heard on a good-quality FM tuner radio like my lovely old Revox tuner. Sadly, the plans of the previous Government, which I generally supported but not in this area, were hostile to the interests of myself and many others who listen to music on the radio—hostile because they proposed to abolish rapidly the existing analogue FM system, which provides excellent music reproduction, and replace it with the technologically redundant DAB system, already abandoned in most of the rest of Europe, except, I think, by Norway and Ireland. I will be corrected if noble Lords can find another country—maybe Estonia. DAB has poor music sound, and almost all music lovers and listeners will confirm that.
The plans were hostile because the Government steamrollered ahead with this perhaps ill thought-out scheme without consulting sufficiently the consumer interest of the listening public. There was, and still is, little evidence of consumer demand for digital radio broadcasting. Television is a wholly different issue; the digital switchover works, and I am very pleased about that.
This question of radio broadcasting matters, as the noble Lord, Lord Fowler, stated. Some 90 per cent of the population over five years old listen to the radio for an average of, as the report said, 22 hours per week. That was in 2009. Despite the massive advertising campaign for DAB, still only 21 per cent or 22 per cent of listening was on digital in 2009, and only 16 per cent is on DAB even today. I cannot understand why noble Lords say that the consumer is supporting it; the figures are contrary.
As has been said, more than 30 million cars are currently driving without DAB. Despite the well advertised threat of scrapping FM in 2015, only roughly a quarter of new radio sales were digital in 2009. Virtually all car listening is currently on FM. I often go to hi-fi shops, and the staff there say that the majority of customers are still not interested in digital; instead, they are willing to invest their money in FM tuner radio equipment, despite the threat of rapid abolition.
So, why has the propaganda campaign to impose DAB on the British listening public failed? And it has. Most of the British public do not like DAB sound and most are content with analogue FM. That is the reason. It is not a failure of communication. That is what Stalin said whenever people complained that they were starving in the Russian countryside: “It must be a failure of communication and propaganda”. No, that was a failure of food production and this is a failure of technological production.
There is not the faintest prospect of reaching the target of 50 per cent coverage by digital—in 2013, remember—which is the prelude to the 2015 switchover. Yet still some in Whitehall, the BBC and the radio industry—from which we have heard distinguished representatives this evening, not that they wish to do this—wish to impose digital sound broadcasting on British listeners, effectively by abolishing the superior FM competition. This is how the East German communist regime boosted sales of its notorious Trabant car; it excluded superior competition. DAB, though not DAB+, is in my view the Trabbie of broadcast sound. The propaganda campaign for DAB often referred to the proposed digital radio switchover as “upgrading”. I noticed that my noble friend Lord Gordon used that word, though I know he was referring to television and not radio. Perhaps in the propaganda this was a misspelling of “degrading” as far as broadcast sound is concerned. I congratulate the Communications Committee on explicitly refusing to accept that spin.
There are of course advantages to digital broadcasting that were widely canvassed and have been mentioned tonight. The main benefits are extra functions, the possibility of interaction, wider station choice and ease of tuning. Those are true, yet as the Ofcom research has shown, there is no evidence that radio listeners want these facilities. All the evidence is that radio—especially music—listeners are content with the present FM. Ofcom’s published research shows 91 per cent public satisfaction with FM. Only 3 per cent want access to the extra radio stations that DAB gives them.
Digital campaigners also argue that the existing FM infrastructure needs costly renewal, while the report says it will cost £10 million per annum for 20 years. That is peanuts compared to the cost of switching to digital. There is the cost of expensively extending the digital multiplexes and of wantonly forcing listeners to dispose of some 100 million analogue radios, costing consumers an estimated £6 billion. I say to my noble friend that these sets would resent being called useless. My Revox does not think it is useless; it is excellent but threatened with redundancy and resents that. There is the cost of abandoning the excellent FM transmission equipment, including that at Wrotham, which serves London; of spending all the money on hundreds of new digital transmitters, many in dense urban locations; and of abandoning the FM spectrum, which cannot be sold. In sum, this venture offers more stations, which the public do not want, with poor audio quality, at huge cost to the consumer, who was never consulted. Better communications and advertising for DAB will not change that.
This venture for DAB radio was launched partly at the wish of the radio industry, which saw benefits in switching off bigger FM stations. To the radio industry it offers probable savings of around £30 million. To the BBC it offers a possible way of coping with the advance of internet radio, which has been so well spoken of, though I doubt whether it will succeed. I greatly sympathise with what my noble friend said about that. To the previous Labour Government it no doubt had the image attraction of appearing modern. Nowhere was the interest of the listening consumer taken into account.
This good report and the government response seek commendably—though late in the day—to address that consumer factor, but nowhere is the mediocre quality of DAB sound addressed. The committee rightly rebukes the previous Government for not having done—or certainly not published—any cost-benefit analysis on this project. We can understand why they did not produce any analysis of the balance of costs and benefits as the costs are high and the benefits are few, at least to the public radio consumer. Certainly, there will be few benefits for some decades to come.
So what do we do now, finding ourselves in this mess on digital radio but not TV? The report is impressively coy on this basic problem. It hints correctly that, like the Irishman at the crossroads—he may have been a relative of mine—it would not start from here. But we are here and the committee gives some excellent pointers to the Government on how to clarify the future. However, to me it seems too defeatist in accepting that FM radio has no future and in accepting the unrealistic dates of 2013 and 2015 for switchover.
I believe that the new coalition Government, and their promising Minister, Ed Vaizey, should be more radical and brave. For a start, they should read and accept the recent report of their own advisory body, the Consumer Expert Group, entitled Digital Radio Switchover: What is in it for Consumers?. As I said, there is a short answer to that. It contains an attack on the digital plans and accuses the radio industry of attempting to “bully” the public into adopting DAB. It states that the only consumer benefit in the switchover would be the ultra-small stations, to which few would listen.
For the future, in addition to studying carefully what my noble friend Lord Maxton said, I suggest three conclusions which might have been in the report. First, the Government should maintain indefinitely the national—not just local—FM radio platform, which a large proportion of the public enjoy and prefer. The Consumer Expert Group states categorically that,
“there are no economic or technical barriers to FM continuing as a broadcast platform”.
Secondly, since we are down the digital radio path, the UK should switch to using the superior DAB+ technology in radio receivers as soon as possible. Finally, the switchover date for transmissions should be delayed until, say, at least three-quarters of all radio listening is by DAB+. I see no virtue in meeting a bad target date. I am encouraged by what the Government have already said in that area. Such a delay would allow a steady and measured transition to a more realistic date without steamrolling the poor consumer into rapidly throwing away his excellent FM equipment. We should allow him or her to enjoy their existing superior sound for much longer.
Lord St John of Bletso
My Lords, it was a great privilege and pleasure to be part of this extremely topical inquiry by the Communications Committee chaired by the noble Lord, Lord Fowler. Coming in as the 10th Member in the batting order, I fear that many of the points that I shall make have already been made.
However, I share the concerns of the noble Lord, Lord Donoughue, because while there is a very compelling case for digital television switchover which has progressed on time and on budget—in fact under budget, according to the noble Lord, Lord Inglewood—with minimal teething problems, I have struggled to comprehend the urgency for digital radio switchover and particularly the need for it to be implemented by 2015. I want briefly in my remarks to comment on the SWOT analysis of the implementation of the plan by 2015.
Clearly, with radio playing such an important part in many households throughout the United Kingdom, it is vital that the needs and concerns of radio listeners are fully addressed. For consumers voluntarily to adopt digital radio there needs to be an independent report as well as a cost-benefit analysis giving a balanced view on the advantages and disadvantages of the switchover.
It is difficult to find a single authoritative source that explains what to look for when buying a digital radio and how to compare different products. I agree with the recommendation of Consumer Focus that there should be an easy-to-read checklist that would prompt consumers about what digital products can deliver, explain the different features and help them to make more informed decisions. However, I also believe that there should be better staff training at retail outlets and that there should be more consistent training whereby retail staff are encouraged to become “accredited digital advisers”, as have I heard them referred to.
As the noble Lord, Lord Gordon of Strathblane, mentioned, the commercial radio industry is clearly under considerable pressure. Advertising revenues in 2000 were in excess of £750 million and have reduced to currently around £560 million. Broadcasters which have invested in digital services have had to pay dual transmission costs. I was surprised to hear that more than two-thirds of commercial radio stations are loss-making or making less than £100,000 per annum. I appreciate that the FM spectrum is almost full at the moment and, therefore, the release of digital spectrum would give the industry more opportunity to grow and offer more services to listeners, but I would argue that consumers are more interested in the quality of content and signal, rather than an additional choice of programmes. As the chief executive of RadioCentre, Andrew Harrison, pointed out,
“with the current structural economies of the sector, it is very difficult to both maintain an analogue distribution network and invest in digital content”.
One of the catalysts to greater take-up of digital radio will be the improvement of DAB coverage. I quote from paragraph 105 of our report, which states:
“Improved coverage will encourage more digital listening, more purchases of digital receivers, greater advertising revenues generated by digital stations, and more investment in digital content”.
That is crucial. It is also essential to ensure that consumers have access to digital services and that no groups are left disfranchised should analogue services be switched off in 2015.
While Digital UK has managed the communications campaign for TV switchover in an exemplary and efficient manner, I question the effectiveness of the communications campaign for radio switchover. This is the responsibility not just of Digital Radio UK, but also of manufacturers and retail outlets.
In preparation for a digital radio switchover, I strongly support specific measures being put in place to protect vulnerable listeners such as blind and partially sighted people, who rely on their radios even more than do other listeners. The recent excellent DCMS Consumer Expert Group Report, published in mid-September, stated:
“Research shows that vulnerable listeners are the slowest to convert to new technology and as such are unlikely to be among those who voluntarily adopt digital radio before a switchover is announced”.
One of our key recommendations was that all digital radios contain a multistandard chip, giving us the option of a subsequent move to a different standard. I understand that some but not all DAB radios can be upgraded to work with DAB+. With technology advancing at such a rapid rate, it is inevitable that we will have a future of DAB+. I was tempted to speak about internet radio, but I will resist. My concern is that some cheaper DAB radios may not be upgradeable and may become obsolete. It is important that there should be an industry standard label indicating if a DAB radio is upgradeable to work with other digital radio formats.
One major concern about the digital radio switchover raised by the inquiry related to the use of in-car radios. This was the hobby-horse of the noble Lord, Lord Maxton, and I will not repeat the concerns that he and others raised. I hope that the noble Lord, Lord Fowler, is correct in saying that all vehicle manufacturers will install digital radios by 2013, and that there will be a reliable solution to in-vehicle conversions.
We have heard a plethora of statistics. The noble Lord, Lord Donoughue, mentioned that there are at least 120 million analogue radios in circulation, and I understand that at least 90 million are in regular use. It is important that clear guidelines are given to consumers and retailers to ensure that regulations on the disposal of obsolete devices are appropriately applied and followed.
In conclusion, while I am a firm supporter of the digital age and all its benefits of choice and quality, there is not yet a compelling argument that the target date of 2015 for digital radio switchover is realistic or practical. Any target date set should be looked upon as secondary to the important consumer issues.
Lord Macdonald of Tradeston
My Lords, I declare my interest as an adviser to Macquarie Group, whose infrastructure funds have investments in the transmission business Arqiva and in the security communications service Airwave.
Like other colleagues on the Select Committee on Communications, I compliment the chairman, the noble Lord, Lord Fowler, on his foresight and his leadership, which produced such a timely and well received report on digital switchover. The government response in June was the most positive response to any Select Committee report to which I have been party. Of course, it came from the new coalition Government, but it tracked pretty closely the policy put in train by their Labour predecessors—such as the noble Lord, Lord Carter, who has been mentioned—in the Department for Culture, Media and Sport.
Those Labour Ministers were far-sighted in setting up a shadow Digital UK group in 2002, and wise to ensure that when Digital UK formally came into existence in 2005, it was not a quango but an industry group made up of major players in the broadcasting and communications sector. The funding model was also generous and has underpinned the success to date of digital television switchover for 7 million homes. Although the remaining 75 per cent of UK homes are still to be switched over in 2011 and 2012, I think that there is among us tonight a growing confidence that the digital television switchover programme will continue to come in on time and, even better, well under budget.
As anticipated, there have been problems: with retuning, with regional overlaps in transmission, and with a small proportion—about 1 per cent—of elderly Freeview set-top boxes. The fact that we hear so little about all this in the newspapers, which are usually keen on stories about television, suggests that these problems are being sorted—in many cases, very effectively with the help of the voluntary sector, particularly charities looking after the elderly and those with various disabilities. Like the noble Baroness, Lady Howe, I am impressed by the outreach programme. As she said, it was good to hear the Culture Minister, Ed Vaizey, pay tribute to those charities when he launched Digital UK’s annual report in July, and it was certainly politically astute of him to praise it as a model for other community initiatives which would at last bring to life the Prime Minister’s vision of the big society.
The growing confidence in the successful completion of the ambitious programme for digital switchover is all the more remarkable when we recall some of the dire predictions that it would be a major political catastrophe for the Labour Government. Consumer rebellion was predicted at the prospect of scrapping all those tens of millions of redundant analogue TVs. In fact, consumers’ enthusiasm for digital sets and flat screens ran far ahead of all our expectations. However, our thanks should also go to Digital UK, to its chairman since 2002, Barry Cox, and his chief executive, David Scott, who is now overseeing this huge transition. I trust that we will still be praising their professionalism on completion of the television switchover programme at the end of 2012.
Your Lordships may also be reassured to know that the CEO of Digital UK in its formative years, Ford Ennals, is now the chief executive of DRUK—Digital Radio UK. Mr Ennals’s experience is particularly to be welcomed, as our Select Committee discovered, somewhat to its surprise I think, that the previously low-profile switchover of radio from analogue to digital ran a far higher risk of consumer discontent than did television.
Our report highlighted very real concerns about public confusion and industry uncertainty over radio switchover, which the noble Lord, Lord Fowler, described very persuasively and comprehensively. However, again I am pleased to note that the response of government has been positive in addressing our concerns and sensible in maintaining the trajectory of progress mapped out by the previous Government. Surely it is better now to look forward and work for positive change. As my noble friend Lord Gordon said, the commercial sector should not have to carry on with the cost of dual transmission.
The two criteria to be met before a date can be set for the switchover to digital radio are that 50 per cent of listening must be on digital and that for national radio stations digital coverage should be equivalent to existing FM coverage. On that basis, the earliest anticipated switchover date is 2015. It is a timescale that should certainly calm the nerves, and it may well allow all these issues to be properly addressed.
Like its television twin Digital UK, the radio body DRUK is an industry body, made up of broadcasters, retailers and, of course, motor manufacturers, the latter being particularly important. I share the robust view of the noble Lord, Lord Inglewood, that the cost of conversion in cars might not be quite as daunting as people assume. Obviously there is enthusiasm for in-car listening, with 20 per cent of radio listening being done while driving, and it is essential that digital kit is built in quickly to new models and that cheap and convenient converters can be fitted to older cars.
There are other issues, as noble Lords have outlined, but I think that the Government’s digital radio action plan, published in July, answers most of the major concerns raised by our Communications Committee. I hope that coalition Ministers can now persuade the Treasury to release the £6 million of funding required for a two-year public information campaign. The Minister has been asked to comment on that.
The previous Government got the message over for television and the challenge for the coalition Government is to ensure that radio switchover goes just as smoothly. I underline the point made by the right reverend Prelate the Bishop of Manchester. The challenge for broadcasters is to talk up the attractions of digital radio, to get them over to the public and to accelerate consumer uptake. We are promised many more stations, catering for many more interests.
As ever, the BBC must lead the way. It already broadcasts services of which the wider audience is barely aware—witness the rapid rise in listeners to BBC 6 Music’s edgy programming only after a public row over its proposed closure. Tuning in to digital stations will also be easier and there will be clever features, allowing us to rewind and to record programmes. However, echoing my noble friend Lord Donoughue, for me the unique selling point would surely be better quality sound. In big, built-up markets like London, we need stronger signals and better coverage to ensure that there are no infuriating weak spots. As my noble friend argued, the sound quality must at least match that of analogue radio. You do not have to be an audiophile to expect even better quality from digital signals.
Last month, Ministers received the report of the Consumer Expert Group on digital radio switchover and, like the noble Baroness, Lady Bonham-Carter, I believe that its findings should be taken very seriously. In particular, I draw your Lordships’ attention to its concerns about sound quality. It fears that cramming more stations onto a digital multiplex will lead to poorer sound quality. Even the classical music station, BBC Radio 3, is said to deteriorate when Radio 5 Live Sports Extra joins it in the current digital output. Another complaint is that services broadcast with lower bit-rate levels, are more difficult to hear, according to the Consumer Expert Group.
Broadcasting engineers are often dismissive of such criticisms as audiophile crankery. However, I recall that after many years as a programme executive in ITV, I would repeatedly ask about viewer complaints that sound levels rose when the adverts came on and I would be told, in baffling technical detail by the staff, that it was all in the mind. Belatedly, a senior engineer admitted that although the decibel level might not go up for the adverts, the dynamic of the sound might be tweaked to make it more intense. I did not understand the technicalities, but I concluded that the viewers were right and that I had been misled. I suspect that listeners are right too on sound quality. To ensure that listeners are not misled again I support the call by consumer groups for more research into the impact of low bit-rate levels in digital signals.
If high-definition television has been a driver in the success of digital television, it seems a bit cloth-eared of broadcasters not to take seriously what some consumers are saying about better sound quality. As I recall, it was digital radio’s initial USP—unique selling proposition, as the marketers say. So I hope that the radio industry goes back to basics and gives us better digital quality. I also hope that the encouraging progress being made with the switchover to digital television can be replicated with radio and that the report of the Select Committee on Communications has made that success more likely.
Lord Evans of Temple Guiting
My Lords, I take this opportunity to congratulate the committee on, and thank it for, its sterling work under the chair of the noble Lord, Lord Fowler. In the few short years since its inception, the committee has chosen strong and important issues to investigate and to report on. Its work has been widely reported in the media and it has helped to raise the profile of this House and its scrutinising role.
I have listened to this debate with a great sense of personal regret. I spent my life in the media and I never had an opportunity or the privilege of joining the committee, which, from everyone’s description, has been brilliantly run in every way by the noble Lord, Lord Fowler. Given that we are talking about content, clearly the content of this committee has been absolutely brilliant.
The report looks at the process of digital switchover as it affects both television and radio in the UK. TV switchover from analogue to digital began in 2008, and is planned to be completed in 2012. Proposals for the delivery of digital radio upgrade were outlined by our party when in government in the White Paper, Digital Britain, published by my noble friend Lord Carter. A range of the proposals in that report form the basis of the Digital Economy Act 2009.
I will not say too much about the digital television switchover because, as the noble Lord, Lord Inglewood, and a number of other Peers have said, it is working well. Of course, there are problems. One of the major problems, as identified by the noble Lords, Lord Fowler and Lord Maxton, is in the help scheme, which is intended for those aged over 75, registered blind or partially sighted, and those who are entitled to disability living allowances. The take-up has been lower than expected and, as we heard from the noble Lord, Lord Fowler, there has been a £250 million underspend. I understand that the current Government are consulting the BBC Trust on how the underspend can be redeployed. Will the Government take up the committee's recommendation that any help scheme associated with radio switchover be funded from general taxation and be better publicised?
I turn to the thornier issue of digital radio, which rightly takes up the bulk of the committee report and has been widely discussed in our debate tonight. Labour, in government, made the case in the report, Digital Britain, that if radio is to compete with other media, it must have greater flexibility to grow, innovate and engage with its audience. In addition, the report stated that it needed to show advantage over analogue radio through the delivery of new content and functionality. While the FM spectrum was essentially full, it was our view that radio would gradually use its relevance in the digital age as people turned to other digital services that had more local content or interactivity. We have all seen how successful TV programmes—whether you like them or not—such as “The X Factor” have been in their use of interactivity, with millions of votes being cast every week. Already, there are about 10 million DAB radios in use in the UK, but the rate of take-up needs to be accelerated if we are to succeed in fulfilling digital radio’s promise for a medium that the Digital Britain report described as “portable, intimate and ambient”, and to ensure that radio competes with other formats. In our approach, we had the support of the vast majority of the radio sector.
What is the Government's approach to digital radio upgrade—a point made by several noble Lords—particularly given that the mechanisms and powers for digital radio upgrade are now in place? Do they plan to scrap it altogether, leaving those who paid good money for radios to throw them on the scrapheap? There is growing disquiet in some parts of the radio industry, with concern that switchover will result in a two-tier system—again, a worry that has been articulated tonight. Will the Government leave DAB in limbo, so that broadcasters will be left with the additional costs of broadcasting on both digital and analogue platforms?
The committee recognises that if digital radio is to be a success soon, a number of actions need to be taken by the Government, and we on these Benches are very keen to know where the new Government intend to take us. While in government, our plans had two criteria that had to be met before the next stage could be preceded with. These were, first, when 50 per cent of radio listening was to digital sources—Ofcom are monitoring that—and, secondly, when national DAB coverage was comparable to FM coverage and local DAB coverage reached 90 per cent of the population and all major roads. Is it the Government’s intention to keep these criteria or do they plan to change them? What effect will the cuts in the budgets of DCMS and BIS have on the programme of change?
When in government, our intention was that these criteria would be met by the end of 2013, paving the way for the delivery of digital radio upgrade by the end of 2015. Upgrade was not intended to mean a complete switch-off of an analogue radio service. Instead, all national and large local services were to be carried on DAB only and would no longer be broadcast on analogue, leaving ultra-local radio services to be broadcast on FM. Do the Government intend to stick with the original timetable or will they allow it to slip?
The noble Lord, Lord Fowler, and many other noble Lords talked about the problem of radios in cars. As we have heard, the number of DAB radios in new cars remains very small. What plans do the Government have to try to ensure that DAB radio take-up by the public is greater? Are they talking to manufacturers about fitting DAB-compatible radios as standard? What discussions are they having about retrofitting DAB radios in cars?
I shall briefly pick up some of the most important questions in the committee’s report. The committee argued that, given the importance for the plans for digital switchover of universal reception of the BBC’s national stations, it is essential that a firm and unambiguous plan and funding for the completion of the BBC’s national multiplex be put in place as soon as possible. In their response, the Government revealed that they asked Ofcom to form a coverage and spectrum planning group to cover these concerns. It will report in the spring of 2011. Can the Minister tell us whether the planned timetable for Ofcom’s report to the Government is still on track? Do the Government expect to receive any interim conclusions? The committee highlights a cost-benefit analysis of digital radio migration carried out by PricewaterhouseCoopers in 2009 that suggested that the balance of benefit would be achieved only after 2026. The committee recommended that a full impact assessment and fresh cost-benefit analysis be carried out. In their response to the committee’s report, the Government agreed and said that work would begin shortly. Can the Minister tell us whether the work on this cost-benefit analysis has begun? When do the Government expect the report?
The Committee recommended that the Government should encourage the industry to devise a sensible scrappage scheme for the disposal of analogue radios. Can the Minister outline the Government’s plan in this area? How do the Government intend to ensure that scrappage is completed in a way that does not negatively impact on the environment? How will they ensure that those on the lowest income—particularly the elderly, who depend most of all on radio—are able to get subsidised radios? Will the Government look at using some of the unspent surplus from digital TV switchover to support digital radio switchover?
Finally, can the Minister say anything about how compatible our system of digital radio will be? As one of the earliest adopters of digital radio technology and the world leader in terms of take-up, our DAB standard is now relatively out of date—a point made by my noble friend Lord Maxton. Other standards such as DAB+ and DMB—digital multimedia broadcasting—are more efficient, have additional capacities and are used in Europe. What discussions have the Government had with broadcasters and manufacturers on this issue? Do they have any plans for future transition to a higher digital standard?
I conclude by saying how fascinating I have found this debate. I look forward to the Minister’s reply.
Baroness Rawlings
My Lords, I thank and pay tribute to all members of the Communications Select Committee for their time and work in producing this report on the digital switchover of radio and television. In particular, I acknowledge the contribution of my noble friend Lord Fowler, who during his time as chairman expertly steered the committee through a period of significant change in the communications industry and has kept the subject in debate. He was obviously an inspired chairman, as we have heard from the eight members of his committee. I am pleased to say that the Government, building on the detailed work of the noble Lord, Lord Carter, and the previous Government, have already sought to address many of the recommendations made in the committee’s report through the digital radio action plan.
Digital TV switchover has made huge progress so far. By the end of August this year more than 25 per cent—around 6.7 million—of UK homes had completed the digital TV switchover. A further 10.5 million homes will switch in 2011. We recognise that it is too early to be complacent as we are only a quarter of the way through the programme. There are many challenges to come. Next year there will be 21 regional switchovers and in 2012 the major conurbations of London and the north-east of England will switch. The TV switchover programme is, however, on track for near completion in 2012, is well under budget and will be in time for Her Majesty the Queen’s Jubilee and the Olympics.
So far, relatively few problems have been identified. They are mainly to do with difficulties over retuning and issues of regional overlap. However, the numbers reported are small. So far more than 360,000 people have been helped by the digital help scheme, while local community engagement through regional Digital UK teams, Digital Outreach Ltd and the voluntary sector has helped to provide information to an estimated 350,000 people.
On digital TV underspend, Ministers have made it clear that the ring-fenced money not needed for digital switchover should be made a priority to support broadband in the UK. In answer to my noble friend Lord Fowler, the help scheme underspend will be used for purposes consistent with the BBC’s public purposes. This money has not been diverted from programme-making. It was additional funding which was ring-fenced for this purpose.
There are lessons to be learnt from the TV switchover when considering the case for radio. However, as the Communications Committee noted, it is essential to communicate clearly the differences between the two issues. Let me clarify the Government’s position on digital radio switchover. They have not yet set a date for radio switchover. They are, however, fully committed to securing a digital future for radio and believe that a switchover is the right way to deliver a co-ordinated transition. The Government have agreed 2015 as a target date which all parts of the industry can work towards. To be clear, 2015 is only a target date, albeit one which we and the industry are supporting.
My noble friend Lord Fowler commented at the publication of the digital radio action plan and has reiterated today that,
“the public have got to be taken with the process”.
As the Minister for Communications has pointed out:
“Consumers, not government, through their listening habits and purchasing decisions will ultimately determine whether a switchover to digital can happen”,
and, in the same vein, when a switchover to digital could begin. I hope that this answers my noble friend Lady Bonham-Carter’s concern.
Radio listeners are often passionate about the radio and the stations they listen to. The radio is a lifeline for many, especially the elderly and the blind. I personally feel that it would be a grave error if those who rely most heavily on the radio are left behind in any future switchover. We and the radio industry do not underestimate the scale of the task ahead of us. However, the complexity of the issue should not in itself be a barrier to change, nor does it undermine the necessity for it. I can assure the noble Lord, Lord Evans, that the Government have set out their commitment to the listening and coverage criteria to be met before a date is set for radio switchover.
Digital radio offers a greater choice of programmes for listeners as well as business opportunities for broadcasters. It is already well established and over 11 million DAB sets have been sold. It offers listeners a wide range of content and possibilities, and has proved itself to have found a passionate although at times vocal audience. On the comments of the noble Lord, Lord Donoughue, I doubt whether anything I say is going to address his concerns. However, if he is right, which I do not believe he is, then the listening criteria will never be met. All listeners, not the vocal few, will drive the market’s direction.
I turn now to the specific recommendations made in the committee’s report. One is on energy and waste. In July, we published independent research into the energy efficiency of digital radio which disproves the argument that digital radios consume vastly more energy than their analogue equivalents. The research shows that the difference in energy consumption between digital and analogue sets is now minimal and continues to improve. We are all aware of the need to reduce energy consumption, and I can reassure the noble Lord, Lord St John, that we are also considering the environmental factors, specifically on the sensitive issue of the disposal and recycling of analogue radios through the waste electrical and electronic equipment directive. In answer to the question of the noble Lord, Lord Evans, on the scrappage scheme, we have no such plans but will look closely at the recent scheme run by the BBC and Digital Radio UK.
Turning specifically to the committee report, I welcome the recommendation that a full impact assessment, including a cost-benefit analysis, should be commissioned as a matter of urgency, and I understand that work has already begun. In response to the question of the noble Lord, Lord Evans, I can say that the first report will be completed by the end of 2011. Of course, the cost-benefit analysis will also be essential in identifying which, if any, listeners would be disproportionately disadvantaged by the switchover, and consequently if a help scheme is necessary and what its scope might be. If there is a case, we will take steps to introduce a scheme to support the most disadvantaged listeners. In response to the question of my noble friend Lord Fowler on funding the help scheme through general taxation, I can tell him that no decisions have been taken on how a scheme, if it is required, would be funded. I also agree with my noble friend Lady Bonham-Carter on the importance of a help scheme for the disabled.
In respect of in-car conversion, we welcome the agreement of car manufacturers to fit DAB radios as standard in new cars by 2013 and note that in many cases this has already begun. But that is only half the story. Many people to whom I have spoken are worried rightly about their older cars with analogue radios. Devices already exist on the market which can convert these radios. We expect there will be a growing market for affordable and easy to fit converters.
I welcome, too, the importance that the committee has given to DAB coverage; it is a linchpin in this process. The Government have been clear in their view that broadcasters—particularly the BBC—need to do more to improve coverage over the next two years. To this end, we welcome the BBC’s recent commitment to increased coverage of its digital services. In answer to the question of the noble Lord, Lord Evans, we believe Ofcom expects to produce its report on coverage and planning early next year. In answer to the noble Baroness, Lady Howe, negotiations with the BBC and commercial radio sectors on DAB coverage funding are ongoing. Unfortunately, it is too early to predict when an agreement will be reached, although we understand the urgency of the issue. As to who will pay, it will be a mixed ecology of commercial and BBC funding.
I agree with the right reverend Prelate the Bishop of Manchester that it is important that FM should continue until a decision on switchover is made. Even after switchover, FM will continue for small local services, community, hospital and student radio.
One theme that came through strongly in the committee’s report was the need for a public information campaign. We agree. The digital radio action plan sets out the process for this. In answer to the noble Lords, Lord Evans and Lord Gordon, the action plan sets out plans for minimum receiver specifications. We expect the multi-standard chip to be part of this.
I agree with the noble Lord, Lord Maxton, about the importance of internet radio. He has demonstrated, yet again, that he is truly one of the true technological pioneers in the House. However, internet radio will not meet the needs of all listeners. Online network coverage is not universal, nor can it easily support large volumes of simultaneous radio. In addition, it is not free at the point of access and it is a very costly delivery platform for broadcasters.
In drawing the debate to a conclusion, I repeat my thanks to the committee and to those noble Lords who have spoken today, and especially to the driving force of my noble friend Lord Fowler. The debate has been built on the importance of the report and I hope that I have answered the majority of the questions raised. At this late hour, I apologise that I have not been able to answer all noble Lords’ questions; I shall write to them. Finally, we will of course give due consideration to all the points raised today as we continue with both the digital TV and digital radio switchover programmes.
Lord Fowler
My Lords, I am grateful to the Minister for her helpful response to the debate. The noble Lord, Lord Maxton, is purring with content after the unaccustomed praise he has received. It has been a serious and thoughtful debate which has raised a series of important questions, such as the one raised by my noble friend—I am pleased to call her my noble friend—Lady Bonham-Carter about the dilemma of the 2015 date and whether it is a commitment or a target. The importance of making the case for switchover compelling for the consumer was raised by the right reverend Prelate the Bishop of Manchester. Quality of reproduction and of DAB sound was raised by the noble Lord, Lord Donoughue, in a wonderfully aggressive speech, and by the noble Lord, Lord Macdonald. These are all important questions which the Government would do well to study, because it is quite clear that the case is not entirely made as far as this House and—I have no doubt—the public are concerned.
I again thank all the members of the old committee, the Clerks and their staff. I am delighted that the Select Committee is to continue. There are important questions in communications for any democracy. Present events demonstrate some of the clashes that there can be. These issues deserve careful and objective analysis, which is what the Select Committee on Communications is all about.
I hope that the noble Baroness, Lady Howe, who did so much to get the committee formed, is satisfied with the developments that have taken place, and happy that it is continuing. Above all, therefore, I wish the new committee all good fortune in its work.
Motion agreed.