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The BBC's Use of Spectrum

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The BBC's Use of Spectrum The BBC’s Efficient and Effective use of Spectrum Review by Deloitte & Touche LLP commissioned by the BBC Trust’s Finance and Strategy Committee BBC’s Trust Response to the Deloitte & Touche LLPValue for Money study It is the responsibility of the BBC Trust,under the As the report acknowledges the BBC’s focus since Royal Charter,to ensure that Value for Money is the launch of Freeview on maximising the reach achieved by the BBC through its spending of the of the service, the robustness of the signal and licence fee. the picture quality has supported the development In order to fulfil this responsibility,the Trust and success of the digital terrestrial television commissions and publishes a series of independent (DTT) platform. Freeview is now established as the Value for Money reviews each year after discussing most popular digital TV platform. its programme with the Comptroller and Auditor This has led to increased demand for capacity General – the head of the National Audit Office as the BBC and other broadcasters develop (NAO).The reviews are undertaken by the NAO aspirations for new services such as high definition or other external agencies. television. Since capacity on the platform is finite, This study,commissioned by the Trust’s Finance the opportunity costs of spectrum use are high. and Strategy Committee on behalf of the Trust and The BBC must now change its focus from building undertaken by Deloitte & Touche LLP (“Deloitte”), the DTT platform to ensuring that it uses its looks at how efficiently and effectively the BBC spectrum capacity as efficiently as possible and uses the spectrum available to it, and provides provides maximum Value for Money to licence insight into the future challenges and opportunities payers.The BBC Executive affirms this position facing the BBC in the use of the spectrum. and outlines the action it will take in its response to the Deloitte report. The Trust thanks Deloitte for undertaking The attached response from the BBC Executive this review.The report covers a wide range of issues that will help the Trust to make informed outlines what action is being taken to address the decisions regarding the use of the BBC’s spectrum full set of recommendations made by Deloitte. in the future. It has been considered and approved by the Trust’s Finance and Strategy Committee on behalf The Trust has discussed Deloitte’s findings and of the Trust. recommendations with the BBC Executive and considered its response, which is published in this document.The Trust is content that the Executive’s BBC Trust actions are an appropriate response to Deloitte’s December 2007 findings overall. BBC Executive Response to the Deloitte & Touche LLPValue for Money study The BBC Executive welcomes this study which At switchover the BBC will move to a new high undertakes an independent assessment into power transmission network which will enable it how efficiently and effectively the BBC uses the to change modulation from 16QAM to 64QAM, spectrum it has available to it. Radio spectrum is a releasing capacity in its two DTT multiplexes. scarce resource and the Executive recognises the This will commence on 6 November 2008 at importance of ensuring that it makes effective and switchover of the Selkirk transmitter and will efficient use of it in order to deliver the BBC’s continue throughout the switchover programme public purposes. until the end of 2012. Deloitte’s study shows that the BBC does make A new coding and multiplexing facility for the good use of the radio spectrum available to it: BBC’s DTT and satellite services will employ “In our examination of the use of the FM band, the latest generation equipment enabling more we concluded that the frequencies are all heavily efficient coding and multiplexing in both DTT used and that there are no obvious gaps where multiplexes.This facility is currently under the BBC is keeping unused spectrum.” “The least construction and will come into service in used part of the band is the 99.9 – 103.4 MHz advance of switchover at Selkirk.The full segment, which contains no BBC stations.” facility is expected to be deployed by the end of August 2009. “Multiplex B is already benefiting from maximum coding and multiplexing technology gains and In addition, with the introduction of this new therefore is broadly as technically efficient as facility, the BBC will employ some of the other DTT multiplexes.” techniques identified in this study to maximise capacity efficiency.These techniques will In respect of DTT, Deloitte acknowledge that be introduced from 2009 following the the decisions the BBC made in trading off capacity implementation of the new coding and to achieve a robust broadcast signal for a wider multiplexing facility. population over the last five years have “arguably, The BBC supports the adoption of new supported Freeview to a point of critical mass and technologies that maximise spectrum efficiency, the commercial success it enjoys today”.The BBC such as MPEG-4 and DVB-T2, and is currently Executive recognises that the success of Freeview actively engaged with Ofcom on their proposal has increased demand for DTT capacity, and that for re-organising the DTT platform in order to is why it is committed to making further efficiency accommodate HD television services within improvements.These improvements from digital existing multiplex capacity. switchover will be possible because of the significant financial investment the BBC is making to upgrade its infrastructure: Responding to the recommendations The BBC’s use of the DTT spectrum The BBC’s use of the radio spectrum The BBC Executive will undertake consumer The BBC is currently undertaking a trial of the research on the picture quality of BBC services Digital Radio Mondiale technology in Plymouth on DTT. It will conduct this research on multiplex with National Grid Wireless.The trial is due to configurations assembled by technical experts end in April 2008 at which point we expect to share enabling the varying parameters that may affect the research findings within the industry picture quality to be properly technically managed. in order to help inform the future strategy of AM. This research will be used to judge picture quality output against different multiplex configurations and against the picture quality The planning process for spectrum use of other multiplex operators. The BBC Executive notes the recommendations The BBC Executive is developing a framework for the planning process of spectrum use and will for the allocation and management of DTT capacity build those into the framework for DTT capacity based on the BBC’s performance measurement previously referred to. framework of reach, quality,impact and value for The BBC Executive will continue to ensure that the money (RQIV). This will be presented to the content and editorial teams are properly engaged in BBC Trust in February 2008. proposals regarding what services to offer. Value for Money of different television platforms The BBC makes its services available on a range of platforms in order to ensure universal availability of its services.The BBC Executive actively considers the potential of platform functionality in order to effectively deliver services to licence fee payers. For example, it is currently working with the Digital Television Group on open IPTV solutions, which in the future may offer a means of providing interactive services to hybrid set-top-boxes. BBC Trust The BBC’s Efficient and Effective use of Spectrum Deloitte & Touche LLP December 2007 Contents Preface 1 1. Executive Summary 3 2. Introduction 7 3. Spectrum planning and use 9 4. The BBC’s current use of the DTT spectrum and 15 options for improving spectrum efficiency 5. The BBC’s allocation of the DTT spectrum to services 27 6. Analogue and digital radio – Value for Money in 35 the BBC’s use of spectrum 7. Value for Money of different platforms 38 8. The planning of spectrum use by the BBC 41 9. Conclusions and recommendations 44 Appendix 1 48 BBC Trust The BBC’s Efficient and Effective use of Spectrum Preface This report is one of a series of studies that review Value for Money at the British Broadcasting Corporation (“BBC”). This report was prepared by Deloitte & Touche LLP (“Deloitte”) for the BBC Trust. In the report we review Value for Money of the BBC’s use of spectrum. This report has been prepared for and only for the BBC Trust in accordance with the terms of our engagement letter dated 10th August 2007 and for no other purpose.We do not accept or assume any liability or duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come, save where expressly agreed by our prior consent in writing. While we have consented to allow this report to be made public, we have not in so doing agreed to extend any liability or duty of care that we may have beyond that referred to above. We have not carried out an audit of management information provided by the BBC or the BBC’s financial statements. Our work has been based primarily on internal management information, collated during July to September 2007, which we have not verified or corroborated, and interviews with key BBC staff. We have followed an approach to assessing efficiency, effectiveness and Value for Money that we think is appropriate to this situation. However, we recognise that there might be other methodologies that might also produce valid results. 1 BBC Trust The BBC’s Efficient and Effective use of Spectrum Glossary AAC Advanced Audio Coding HF High Frequency
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