Here's why Whittingdale kicked a subscription BBC into the future

Analysis A subscription-access BBC isn’t a new idea, and for its advocates, it’s a natural evolution that ensures the survival of the Corporation in the modern world. Yet Minister for Fun John Whittingdale kicked the idea down the road yesterday.

Whittingdale explained that for "conditional access" to work, non-subscribers would have to be excluded. Technology allows a service to cut off non-payers painlessly, rather than dragging them through the court system, but the minister thinks “the technology isn’t there yet” to make the jump from a household fee based (in practice) on possession of a device, to a conditional fee based on access.

Is Whittingdale right that we lack the technology? Yes, pretty much.

The irony is that conditional access technology is not only widely common, but it's actually been an EU-mandated standard for TVs since 1997 and is known as EN 50221-1997. You can see the DVB standards for the CI or Common Interface slot here (pdf).

This is the most recent set of extensions in the TV industry's reference bible, the "D Book”, here (PDF). In theory every TV should have a CI slot, which is a PCMCIA connector, allowing the use of encrypted pay-TV services.

And most across Europe do. Most TV makers don't want to make a UK only model and so leave it in. But in reality, the installed based is much more messy. Some TVs have a CI slot, but they’re not always mechanically accessible. Other access devices don’t have anything CI, including the BBC’s YouView box. Why would it? The designers conveniently (for the BBC) assumed everything terrestrial would always be unencrypted.

“He’s right in saying that,” a source familiar with TV tech standards told us. “Some can do conditional access, and some can’t. There’s nothing you can rely on.”

In the UK public service multiplexes can’t scramble their signal – it’s a cornerstone of “universality”. Yet this requirement would be dropped if a hybrid universal/conditional model was adopted.

Whittingdale seemed sympathetic to this in the debate on BBC Charter renewal yesterday. he announced the Green Paper yesterday.

"The technology is not yet in every home to control access. Therefore, the three options for change that are viable in the shorter term are a reformed licence fee, a household levy, or a hybrid funding model. In the longer term, we should consider whether there is a case for moving to a full subscription model. All have advantages and disadvantages,” he told MPs.

The hybrid model would see a (probably) lower universal fee retained for certain universal services: BBC News and CeeBeebies, for example. But if viewers wanted extras, they’d need to pay. Accompanying the new BBC Charter would be a requirement that TVs sold in the UK conform to the latest conditional access technical standards.

The government has also floated the idea that it reflects the user’s ability to pay. Finland is one of seven European countries to abolish its “poll tax” flat rate fee; the country now has a TV tax based on income.

Any conditional access proposal is likely to hit two obstacles. The government will be reluctant to increase the cost of the BBC for the middle classes who most use it, but who are currently subsidised by low income license fee payers. No matter how much people say they back “fairness” or “social justice”, they tend not to vote for governments that hit them in the wallet. Secondly, the BBC’s rivals like Sky don’t want a cash-rich BBC outbidding them for sports rights.

If the BBC is as widely-loved as its supporters say it is, then it would be richer under subscriptions than it is under the license fee today because discretionary TV consumer spending is potentially much higher than the license fee. Today all that OTT spending goes to the BBC’s rivals, not the BBC itself. So sometimes maintaining the status quo suits all the vested interests just nicely.

Meanwhile other countries are bounding ahead.

The UK market has lagged behind other countries. Although we are using DVB-T for standard definition FreeView broadcasts, the rest of Europe is implementing DVB-T2/MPEG-4. Within two years, Germany will be switching over to DVB-T2 using HEVC, which makes much more efficient use of spectrum for 4K transmissions. As we explained here, mandating HEVC would make our Freeview HD boxes obsolete.

Perhaps the government could fix that while it’s at it? Issuing a firm roadmap so British TV can catch up with modern standards would allow it to address 4K and conditional access at the same time. ®