BBC gives Freesat service the go ahead

The BBC may launch a dedicated HD channel to take advantage of its Freesat offering

The BBC is going ahead with plans to launch a national free-to-view satellite service following the outcome of a public consultation. 

The Freesat service will include the ability to carry high-definition output, and the BBC may launch a dedicated HD channel to take advantage of this following a Public Value Test.

"We conducted an open consultation between 27 February 2007 and 27 March 2007 and we were delighted with the level of response," said Chitra Bharucha, acting chairman of the BBC Trust. 

"674 responses were received which we have analysed and taken into account as appropriate in reaching our final decision, which is to approve the proposals."

Out of those responses, 93 per cent thought that the BBC should be taking action to improve access to its digital services before the digital switchover.

The same number believed that the proposals fit with the BBC's public purposes, while nine out of 10 thought it unlikely that Freesat would lead to the market exit of existing participants or create a barrier to future innovation.

During the consultation, satellite broadcaster BSkyB had questioned the proposal, specifically asking the BBC Trust to "re-examine whether the proposition is a 'non-service' that does not require a Public Value Test". 

Taking this into account, the Trust ruled that Freesat does not have the nature of a service because it only involves distribution.

However, any BBC service that can be accessed through the free satellite proposition is subject to a service licence and would have to undergo a public evaluation before being approved.

The BBC now plans to establish a joint venture to manage the marketing and technical aspects of Freesat, with the non-commercial venture operating on a not-for-profit basis, said the Trust's report.

The BBC will impose certain conditions on the running of Freesat to ensure that it meets its Public Charter obligations, including monitoring the funding arrangements so that it can be demonstrated that other broadcasters are not being subsidised by the licence fee.

It will also keep its Freeview service separate from its involvement with Freesat to minimise any potential effect on competition.

The BBC said that it had originally intended to have the Freesat service up and running in time for the first digital switchover trial in Whitehaven in September 2007.  

While this will not be possible because of the long consultation period, the BBC is confident that Freesat will be launched before the entire Border TV region is switched over in 2007 or 2008.