BBC TRUST FREESAT CONCLUSION.

AS REPORTED BY THE BBC TRUST IN APRIL 2007.

promotion of all BBC services. In formulating its codes the Trust is required to have regard
to competition codes issued by Ofcom. The consultation is open until 22 May 2007.
The consultation has reinforced our view that the launch of "Freesat" will not deter
significant levels of investment and innovation or result in the market exit of existing market
participants. Overall, 90% of respondents (and 90% of organisations responding) supported
our assessment.
Finally, 89% overall (and 88% of responses from organisations) said that the proposals went
far enough to minimise the impact of the proposition on the market. Comments included:
“Generally yes although some consideration will need to be given to influencing manufacture
and installation in the interests of consumers.”
“Yes. Many companies existing and future will benefit from the supply of the equipment
necessary.”
“Yes and distances the BBC somewhat which is more suitable for a public body.”
Our view on the competitive impactHaving taken into account all of the material before us we reached the following views.
(a) Effect of strong HD channel line upAs set out above in the section describing the "Freesat" proposal, it is important to bear in
mind the limits to what is being evaluated in considering this proposal. The proposition does
not include approval for a service licence to make available BBC HD output through
“Freesat.” Any such approval would be subject to a PVT which would include consideration
of a MIA prepared by Ofcom. We therefore consider that it is not necessary for the Trust
to give significant weight to the potential market impact with a strong HD channel line up.
However, the Trust has appropriately taken into account, when assessing the proposition's
public value, the future proofing in the proposition by building in the capability to provide
BBC HD output and the fact that this would entail enabling access to HD content if other
broadcasters decide to make unencrypted HD output available.
In the risks section below we have considered Fathom's conclusion that without a strong
HD channel line up the proposition would have limited appeal (0.5m customers) and may
fail.
(b) Competitive restraint on competing servicesWe considered the Fathom Partners' conclusion that the proposition without a strong HD
channel line up could have a negative impact on Sky’s subscription services as well as its freeservices.