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Cable Authority Annual Reports and Accounts 1988-89

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Cable Authority Annual Reports and Accounts 1988-89 © Cable Authority 1989 British Cable :KeyFads 31 March 31 March 31 March 1989 1988 1987 Number of franchises awarded 32 23 22 Number of franchises operating 10 10 8 Homes to be passed by franchises awarded 4.601.000 2,365,000 2,297 .000 Homes so far passed 470,203 307,453 168,436 Homes connected to franchises 65.874 44.565 21,873 Average franchise penetration rate 14.0% 14.5% 13.0% Average subscription paid per month £17.08 £17.86 £18.50 Licences for upgrade/SMATV systems 144 119 73 Homes passed by all UK cable 1,478.583 1,372,856 1,189.655 Homes connected to all UK cable 283,816 256.527 193.173 Average penetration rate 19.2% 18.7% 16.2% Proportion of viewing of cable channels 36% 39% 30% The Rt Hon Douglas Hurd CBE M P Secretary of State for the Hom e Department Hom e Office 50 Queen Anne's Gate LONDO N SW1H 9AT 10 July 1989 Dear Secretary of State I have pleasure in sending to you, inaccordance w ith section 21 of the Cable and Broadcasting Act 1984, the Annual Report of the Cable Authority, together w ith the statement of accounts, covering the period from April 1988 to March 1989 . Yours sincerely ~ - /' Richard Burton • M r Richard Burton Chairman of the Authority Members oftheAuthority Chairman MR RICHARD H BURTON Deputy Chairman PROFESSOR JAMES RING CBE MRS ANNE BALLARD M RPHILlP DARW IN MR PAUL JOHNSON M RS ELIZA BETH MACDONALD-BROWN M R PETER S PAINE CBE DFC 2 Chairman's Foreword W hen I said in my foreword to last year's report that the prospects for cable w ere better than ever before. I littl e thought that the interest then beg inning w ould explode so rapidly in the year that has followed. On the basis of prop ositi ons accepted by us. we advertised twentysix franchises in the year. compared with only five in the previous year. There is now every sign of that accelerated activity continuing through the coming year. to the point w here most of the urban centres of the country are likely to be inclu ded in the franchising process very soon . How ever. despite the more positive perspect ive on cable w hich th is activity reflects the Authority cannot yet be content with the position of cable. The rising tid e of franchises has not yet resulted in much new cable in the grou nd. Cable needs to be establ ished as a fact in many more areas and to be supplying a range of new and worthwhile programming and services before it will be taken very seriously by the people of this country. It is a matter of regret to the Au tho rity that there is not mo re British investment in cable but there is great current interest based on North American investment. I commented last year on th e harmful effect of uncertainty and delay. w ith special reference to the restrictions on foreign control of cable operations here. It is therefore gratifying that the Governme nt announced in May that it proposes to repeal these restrictions. The polit ical uncertainty engendered by the Broadcasting White Paper caused some hesitation within the industry and undoubtedly slowed down some of the developments which would ot herwise have occurred. At a stage w hen interest in cable had at last become widespread. such uncertainty w as anot her cause of regret to the Authority . Happily. the Government has since accepted that many of the proposed changes should not after all be made. but the fact that they were proposed in the first place has had a damag ing effect in undermining confidence and stabil ity. It is understandable that the Government no long er wishes to grant cable special favours. but it is diffi cult to understand w hy it seems to see a need to reverse the process by imposing adverse restricti ons on an industry already facing strong competitio n. The most recent example is the prop osal that SMATV systems in single buildings should be taken out of the normal licensing arrangement s and therefore out of the automatic territory of the local broadband franchisee. Each such propo sal creates uncertain ty and delay. The Authority nevertheless remains co nvinced that its consis tent ly held belief that cable is a necessary and inevitable part of this country's futu re is we ll on the w ay to vindicatio n. 3 • The Authoritys senior staff Jon Davey _ Director General Tony Currie Controller of Programmes Chris Quinlan Controller of Advertising Anthony Hewitt Secretary to the Authority (from January 1989) (Edward M ercer, who had been Secretary to the Authority, left in December 19881 The role oftheAuthority The Authority came into existence on 1 December 1984 as a result of the Cable and Broadcasting Act 1984. The Authority is charged by Parliament wi th • grant ing franchises for the installation and operation of large-scale broadband cable systems • licensing the provisio n of cable programme services in addition on older systems (upgrades) and new smaller systems (SMATVI • licensing the provision of television for public showing • drawing up codes on programme standards, advertising practice and sponsorship • exercising oversight of cable programm es to make sure that the rules are kept • exercising its licensing functio ns in the w ay that best promotes cable services, especially those on the new generation of broadband syste ms . 4 REVIEW OF THE YEAR 1 Reviewof theYear This year w as distingu ished by the rapid upsurge of interest in cable for w hich th e Authority has been looking since it w as established. This was manifested in the greater accessibi lity of finance for cable investment and in a consequent and dramatic increase in the demand for cable franchises. The Au thority has long believed that percept ions of cab le. w hich have previously denied the industry the fin ance it needed. would inevitably change as the long term advantages of cable became clearer. It is. how ever. w orth seeking to identify the consideratio ns w hic h have led to this speedy turnarou nd in the year und er review . They are of three kinds . The effect of satellite television The first concerns developments in satellite television . The year saw the launch of the Astra satellite and the co mmencement of the first of the new television channels w hic h are using it. Th is has increased and improved the range of prog ramme channels w hich cable operators can relay to their customers. It has therefore given them a bett er product to sell. and the industry is confident that it w ill make it easier for operato rs to attr act new customers and keep them. But the immense publicity given to Astra and Sky Television. w hic h is already transmitt ing four channels via the satellite. means that publ ic aw areness of a new choice of television is now far higher than it wa s previously. Th is agai n is perceived as making the job of cab le operators easier as they seek to sell their services to the publ ic. It also became clear during the year that the onset of these new satellit e television services would be associated with some co mp lexity in individual reception. and the need for a significant amount of receiving equipment if a view er wa s to attempt to take advantage of the full choice coming on offe r. It therefo re became evident that cable's role would be even more important than had previously been realised. overcomi ng the co nside rable confusion betw een diffe rent satellite systems. and th e substantia l expe nse of the individual receiving equ ipment w hich non -cable viewers would need. Although. therefore. the arrival of new satellite television services was perceived in some quarters as reducing the incentive to install cable systems. the attractions of cable remained stro ng. The panel on page 7 co mpares the features of cable. satellite dishes and MVDS as a means of explainin g w hy interest in cable is growing. Telecommunications becomes rea l The second main consideration co ncerns cable's role as a telecommunications medium . The Authority reported last year the commencement of the fi rst cable telephone services by Cable Camde n Ltd and Windsor Television Ltd. Dur ing the year. East London Telecommunications Ltd became the th ird operator to offer a telephone service. and the experience of these develo pments - particu larly in Windsor. where the service wa s most extensive - did much to establish the credibility of cable as an alternative telecommunications med ium. For the first time. the value of being able to derive a second stream of revenue from the infrastructure investment became quantifiable: it was possible to include in a cable operato r's business plan some realistic projections for revenue from telecomm unications services. 5 • ------- - REVIEW OFTHEYEAR North American investment grows The third main consideration w as the motivation and ability of North American companies to invest in cable in thi s country. In the last five years. cable has achieved a new level of maturity and success in the United States. as it has in Canada. There are few oppo rtunities for expansion left in North America. and cable operators there have been looking in ever increasing numbers at the possibility of expansion to the United Kingdom.
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