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Thursday, 13 September, 2001, 18:26 GMT 19:26 UK
BBC's digital surprise
Media correspondent Nick Higham analyses why the BBC won approval for eight out of nine of its planned digital services - but not the lynchpin, BBC Three.
The government's decision to block the BBC's plans for a new youth TV channel, BBC Three, are a blow to the corporation - but not necessarily a disastrous one.
Crucially, although the BBC has been told by Culture Secretary Tessa Jowell to think again, it has not been told to abandon altogether the idea of a service aimed at 16-34 year olds.
Younger adults are an audience with which the BBC is losing touch - penetration of digital television is highest in households with younger viewers and families with young children, and not surprisingly they spend much of their time watching services other than the BBC's.
BBC Three was an essential part of the corporation's strategy for trying to reconnect with this huge and vital audience.
Just because the culture secretary judges the original £95m plan for the channel not distinctive enough does not mean the BBC will give up the struggle.
With hindsight it is clear the BBC was never going to get government approval for all its plans - five radio networks, two children's TV channels and an "arts and ideas" channel, BBC Four, as well as BBC Three.
The BBC's commercial rivals lobbied too loudly and too vigorously for the government to ignore their complaints.
BBC Three as originally conceived is the sacrificial lamb. Companies already running youth TV channels like Channel 4's E4, BSkyB's Sky One or Rapture protested that it was too similar to what they were providing and threatened to undercut them.
They also poured scorn on the BBC's argument that the channel would help boost take-up of digital television when so many 16-34 year olds have it already.
Tessa Jowell evidently accepted these arguments in the case of BBC Three - but rejected them where the BBC's proposed channels for children were concerned.
Yes, she said, there were many other commercial providers of children's channels - but there were so many that the addition of two others provided by the BBC was unlikely to have much of an effect on the market.
It was more important that the BBC's channels would carry lots of original, UK-made programmes, rather than imported ones, and in an advertising-free environment.
With questionable consistency, she also thought that in the case of children's channels, if not BBC Three, the BBC's presence would help drive the penetration of digital television beyond the present one-third of households.
"Although homes with children are among the least resistant this service will assist take-up in remaining non-digital homes with children," she said.
However the government has imposed conditions.
Eighty per cent of the output on the channel for younger children, 75% on that for older children, must be made in Europe.
Likewise 70% of BBC Four's programmes must be original, and it must not be used as a dumping ground for music and arts programmes currently on BBC One and BBC Two.
The decisions have been largely welcomed by the BBC's commercial rivals.
So have the conditions attached to all the services, and designed to ensure that they really do turn out to be distinctive, as the BBC says, not just "me too" services aping the commercial sector.
Commercial radio, which is investing a lot of money in digital services for precious little return so far (there are only 40,000 digital sets in the country), hopes the BBC's services will boost interest in digital radio generally.
ITV too is pleased that the BBC has been told to conduct "a vigorous campaign" to promote digital - no doubt because it hopes that will benefit its own struggling terrestrial digital platform, ITV Digital (formerly Ondigital).
But just what form that promotion takes could be controversial.
A rival channel like Disney TV will be unhappy if the BBC is given complete freedom to promote its new children's services and their programmes on BBC One - when Disney has to buy airtime on ITV or Channel 4 if it wants to do the same.
The BBC may have largely convinced the government that its new services will, as advertised, boost viewing and listening choice.
But commercial broadcasters will be watching the corporation like hawks to make sure it does not go too far.
And some have raised a question-mark over the whole process.
In a statement Richard Hooper, chairman of the commercial radio watchdog, the Radio Authority, said: "We find it increasingly inappropriate that a government minister should be required to make decisions about what the BBC can and cannot broadcast.
"If interest rate changes and merger decisions are no longer seen by the government as matters for ministers to decide on, then surely BBC broadcasting policy should be treated in the same way."
In the long run Hooper believes - and many in the commercial sector agree with him - the BBC should be subject to the proposed new communications super-regulator Ofcom, like all its rivals, rather than being regulated by its own governors, and it should be Ofcom, not the government, which takes decisions like today's.
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