DTN takes on BDB Goliath in the battle to run digital television

Torin Douglas is BBC Radio’s media correspondent

The Independent Television Commission may have been forgiven for thinking that this was going to be one of its easier decisions. On the day the bids to run Digital Terrestrial Television (DTT) went in, the consensus in the media was that it was a one-horse race.

The combination of Carlton, Granada and BSkyB – trading as British Digital Broadcasting (BDB) – was seen not just as the clear favourite. It was deemed to have breathed life into a venture that many in the industry had written off as a dead duck.

BDB is still the favourite. But it now has a fight on its hands, thanks to a remarkably effective lobbying campaign by Digital Television Network, its only rival for the three main multiplexes on offer. DTN can no longer be dismissed out of hand, as it was by many when its bid was first submitted.

DTN, backed by the cable company International CableTel, which owns the transmission company NTL, was perceived as offering a far less attractive programme line-up than BDB’s combination of Sky’s movies and sport, and “Best of…” channels from Granada, Carlton and the BBC. It has managed to prompt a reappraisal of that assessment.

The ultimate target of its campaign, masterminded by Hill & Knowlton, is the members and senior staff of the ITC, who will take the decision. But it is being channelled through those ubiquitous “opinion-formers” – Parliament, journalists, the industry and the informed public. Wherever two or three media folk are gathered together, you will find DTN relating the deficiencies of its rivals’ bid and the merits of its own.

The Commons Select Committee on National Heritage? There was DTN, explaining to MPs that, if its bid succeeded, it would carry more BBC channels than BDB, the group to which the Corporation had given “first option support”.

The Guardian Media section? First Liz Forgan (a DTN non-executive director) then David Elstein (the arch-sceptic of DTT) wrote columns challenging the supremacy of the BDB bid (punctuated by one from Carlton’s Michael Green no less, disputing the Forgan claims).

The Financial Times New Media and Broadcasting Conference? Up popped DTN to sponsor the post-session drinks, and give its chairman James Gatward the chance to say just a few words reinforcing its place among the movers and shakers of the digital age.

DTN has rattled BDB’s cage and it is ready to retaliate.

James Gatward? Wasn’t he the founder of TVS, one of the shorter-lived ITV companies, outbid last time by Lord Hollick’s Meridian, now part of United News & Media? The BDB consortium has remembered something else: it was Gatward’s TVS that gave us the famous Italian stripping housewife – or rather, the warning that this was the best we could hope for if we allowed multichannel TV to our shores.

Watch out for this nugget to appear in the public prints shortly, for BDB is fighting fire with fire, as demonstrated by the speed with which its rebuttal unit got Green into The Guardian. In that article, he identified, and sought to shoot down, the DTN’s main arguments.

Some of these relate to the content of the two bids. DTN says it will carry six BBC services (in addition to BBC1 and 2) if it wins. In The Guardian, Green claimed the BBC channels were exclusive to BDB. Yet if DTN did win, does he believe the Corporation would withhold its channels from the DTT platform?

DTN says it is offering new channels not available on cable, satellite or ITV, including “Metro TV” city stations, The Money Channel, The British Sports Channel and The Knowledge Network, and up to 20 data and interactive services. Green replied that BDB would also include new channels, “lots” of original production and, “over time… a myriad of additional services, including text and data”.

DTN claims BDB doesn’t yet have the rights to show Sky Sport and Sky Movies on DTT: it says it can secure these if it wins the licence.

But DTN’s most fundamental argument is about competition and monopoly. It told the Heritage Committee: “The BDB bid will effectively prevent DTT from developing as a major platform for pay-TV in competition with BSkyB’s services – bad news for consumers and for many sports and programme rights owners.”

It claimed that would also be bad news for the BBC: “It will benefit the BBC for DTT to be controlled by interests which are separate from digital satellite television so that a competitive market – and a fair price – can be created between the delivery platforms for the BBC’s channels.”

Price is seen as important by DTN. CableTel’s chief executive Steve Wagner believes multichannel TV in the UK is too expensive for most viewers. In one of his own cable areas he has pushed TV penetration to an impressive 45 per cent, by offering a small number of channels at a lower price. DTN says its services would be offered at half the price BSkyB customers currently pay, and in that way it would help expand the pay-TV market.

DTN has marshalled its arguments well. It maintains the way to sell DTT to the public is not as a halfway house to digital satellite, but as a fully-fledged medium, offering not just programmes but online information and data too – and at a price viewers can afford.

Its problem is that DTT remains an extremely difficult sell. Even with three dominant British TV companies combining to tackle the task, it will not be easy. The idea that a US cable TV company will have a better chance, particularly competing head on against 200 digital satellite services, is not easy to sustain.

Competition may be a luxury DTT cannot afford.

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