Regulators fight over digital TV

ITC blasts government plan to give Oftel lead role

THE Independent Television Commission this weekend publicly blasted the Government over its proposal to give its rival, the telephone regulator Oftel, more power over pay-per-view and digital TV.

Peter Rogers, the ITC's deputy chief executive, said it would make more sense for his organisation to control "conditional access" - the decoding system for signals on the 18 new terrestrial digital channels announced last Thursday.

"The Government has accepted that conditional access should be licensable but wants to give it to Oftel," he said. "We think that's a mistake." The TV regulator's opposition has already been expressed to the Government, which has not yet made a final decision on which body will oversee the new technology.

But it is clearly leaning in the direction of Oftel, with the ITC seen as consultant. In its proposals for setting up the 18 new digital terrestrial channels, the Government said that "broadcasters should be licensed under the Telecommunications Act; after consultation on the licence conditions with the ITC and other interested parties, and subsequently regulated by Oftel, working closely with the ITC."

The TV watchdog's unusual attack is the first serious battle in what is shaping up to be a bitter turf war between the two regulators, and the Government departments behind them - Trade and Industry for Oftel and National Heritage for the ITC.

At stake are not just the handful of Earthbound channels, but hundreds more that could soon be available via satellite. Conditional access devices - called set-top boxes because they are designed to sit on televisions sets - could also become the gateway for other services, such as video conferencing, home shopping and the Internet, as computer, television and telephone technologies converge.

Victory in the fight will decide not just which bureaucrats keep their jobs. The regulators have sharply different styles and priorities. While the ITC is expressly forbidden from regulating the BBC, the dominant player in television, Oftel makes a point of limiting the power of BT in order to foster competition.

Don Cruickshank, Oftel's director-general, believes rapid convergence will make it necesssary for Britain to set up a unitary regulator similar to the US Federal Communication Commission. "Both Labour and the Government have sort of indicated they favour a merging of the ITC and Oftel," said a spokesman for his office.

Last Monday, Mr Cruickshank released a 70-page discussion document which staked out his claim to some of the most important areas in dispute. One of its main conclusions was that "the traditional regulatory distinctions between broadcasting and telecommunications will be difficult to sustain".

The ITC argues that convergence will happen more slowly, with only some of the possible new technologies being commercially viable. It insists that it has no desire to empire-build, and wants to negotiate a cease- fire line with Oftel.

But it is clearly prepared to fight over set-top boxes. It announced last month that it was preparing a code of practice on the technology to cover terrestrial, satellite and cable broadcasts. It is expected to suggest that it be given the power to impose fines on operators who break the code.

The only existing conditional access system in the UK is owned by Rupert Murdoch's BSkyB and used for his pay-per-view services. In addition to decoding scrambled television signals, it administers the list of subscribers and bills them for the services they use. Unless other television companies go to the expense of developing their own system, it is likely to remain the monopoly supplier. As such, both Oftel and the ITC agree, it would require regulation to ensure that other companies supplying content get fair access.

The ITC claims existing European and UK legislation give it control over signals beamed up from the UK to satellites by licensed television companies. Its main demand until now has been that all providers of information, not just television companies, be licensed. The Government seems willing to oblige.

But the ITC also argues that the authority it already has should be extended to cover the system that receives satellite signals in the home. As the same system is likely to be used for terrestrial digital broadcasts as well, it would seem to make sense to put them under the same control.