IAB blog

Nick Stringer

The Government – pioneered by the departing Communications Minister, Lord Carter – today unveiled its final Digital Britain report.

There is welcome acknowledgement of the contribution digital advertising – in particular targeted advertising - will make in helping to monetise online content.  The Government also attaches significant importance to self-regulation and education in promoting transparency and protecting internet users’ online privacy, supporting the IAB’s Good Practice Principles for behavioural advertising, as well as www.youronlinechoices.co.uk, the new portal to help educate users.  There is also encouraging news in the appointment of Martha Lane-Fox, one of the pioneers of digital commerce, as the Government’s digital inclusion champion.

But all eyes are on two specific proposals contained in the 238 page report which will alter the digital landscape in the years to come:

1. A 50 pence per month levy on all fixed copper and cable lines (but not mobile infrastructure) from 2010 to fund the rollout of next generation broadband.  According to Lord Carter that’s £6 per year per household, although low income households would be exempt.  The fund would raise between £150-175m a year, allowing next generation rollout to be complete by 2017, a timescale specifically criticised by the Conservative Culture Spokesperson, Jeremy Hunt.

2. Ring-fencing the BBC’s underspend for the so-called Digital Switchover Help Scheme (ie money the BBC receives to help vulnerable people switch to digital TV services - over and above its existing licence fee settlement) to help finance the delivery of regional news, other than that provided by the BBC.  This ‘Contained Contestable Element of the Licence Fee’ idea is not the so-called ‘top-slicing (to you and me that’s ‘sharing out’) of the BBC’s licence fee, as has been widely reported in the media.

Significantly, this second proposal fires the starting gun of the licence fee review (due in 2013) and the beginning of a wider discussion about how the BBC’s licence fee should apply (and in what form) in a digital age (eg we don’t pay the licence fee to access the BBC’s website or the iPlayer).  The report moots maintaining a ‘Contained Contestable Element’ of the licence fee after 2013 and, in his briefing to industry this afternoon, Carter did not rule out this money being used for (non-BBC) children’s content and programming. 

If there is to be a lasting legacy of this report then this is it.  The Government has effectively sounded the death knell on the BBC’s licence fee as we know it today and kicked-off the debate about how we fund public service content in a digital age.

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