Hodge claims digital auction is not about funding the Treasury

Margaret Hodge, the Trade and Industry minister, has denied that an auction for spectrum triggered by digital switchover is being “driven” by the Treasury.

She hit back at industry speculation that Chancellor Gordon Brown was seeking to maximise revenues from the auction by not setting aside capacity for high-definition television (HDTV) on Freeview.

The analogue switch-off in 2012 will create new available digital spectrum, which the TV industry is keen to use for broadcasting high definition TV.

Hodge was speaking at the annual summit of industry body Digital Television Group. She said the government was mindful of the public policy implications of spectrum allocation after digital switchover. “This spectrum is not about maximising money for the Treasury,” she said.

She added that predicting customer demand was extremely difficult in a “very fast changing space”. “We don’t really know that HDTV is going to be top of consumers’ shopping lists, or mobile TV.”

Her speech follows comments from John Claire, chief exectutive of electrical retailer DSG International, which slammed the Government for “profiteering”.

He believes the new spectrum will be sold to mobile phone operators, effectively killing the chance of free HDTV services. Clare, who oversees the Currys, PC World and Dixons retail brands, says 4 million customers would buy HD-ready TVs this year, with many expecting free HD programmes.

Ofcom, the broadcast regulator, has recommended that all spectrum freed up by analogue switch-off should be auctioned in 2008. It is currently consulting with the industry on the proposals.

But Channel 4 chief executive Andy Duncan believes that while Ofcom is consulting, the “direction of travel is already clear”. He believes the consultation should include other options, such as setting aside a third of the new spectrum by digital switchover for HD services and selling the rest.

Last week, David Patton, senior vice-president of marketing communications for Sony Europe called on the TV industry and Ofcom to “sort out” HDTV, saying the UK risked being left behind (MW March 1).

The HD for All campaign, which DSG, Channel 4 and Sony are backing, aims to convince the public that the switch to digital television could lead to a division of the HD “haves” and “have nots”. The alliance formed last month (MW February 8).

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