BBC TRUST FREESAT CONCLUSION.

AS REPORTED BY THE BBC TRUST IN APRIL 2007.

 particularly for those who are unable to receive the Freeview service and within thatnumber those who do not wish to use “Freesat from Sky” or who do not want, or cannot
afford to use, subscription based services now or in the future. “Freesat” is expected to
offer up to 300 TV and Radio channels (compared with around 75 that are currently
available through Freeview). BSkyB nevertheless comment in their response that the Trust’sview here is subjective. It is appropriate for the Trust to form its own view on the public
value of the proposition and we remain of the view that the positive impact of the proposals
is clear, and consider that the overwhelmingly positive response to our consultation across
all the questions relating to public value validates this view.
(iii) Quality and distinctivenessWe also support the view that the proposition will be high quality and distinctive.
Whilst it is difficult to make a definitive assessment of quality at such an early stage, we are
satisfied that in terms of content the availability of all BBC services and the intention to carry
other public service channels provides sufficient assurance as to content quality. We are
also satisfied that the joint venture structure and the proposed remit for the joint venture
provide sufficient assurance in terms of controls over the set top box specifications, the
electronic programme guide and the marketing arrangements.
Some responses questioned the distinctiveness of the “Freesat” proposition. However, the
Trust recognises that the proposition will introduce competition in the market for free
satellite television services and will therefore offer an alternative choice of provider for
consumers. Furthermore, the “Freesat” service is guaranteed to remain subscription free.
(iv) Cost and value for moneyFinally, we have taken into consideration the cost and value for money to the BBC of
supporting the new proposition. The likely potential cost to the BBC of participation in the
Joint Venture is modest – very substantially below the levels at which we would need to give
our authority to BBC management to invest and comparable with what the BBC contributes
to the Freeview joint venture and associated technical infrastructure. BBC management’s
intention is that these costs should be shared amongst partners to the “Freesat” joint
venture and this would reduce further the call on licence fee funding. We also consider that,
taking into account the modest costs involved compared to the public value of facilitating
and increasing access to subscription-free BBC services, particularly in areas where licence
fee payers cannot currently access Freeview, the proposition represents value for money.
Some respondents felt unable to comment adequately on the Trust’s value for money
assessment because the Trust did not publish any details of the cost to the BBC of itsparticipation. We have revisited the decision not to publish details of the cost and weremain satisfied that this decision was correct. The figures which the Trust has seen for
maximum cost to the BBC of participation cover the scenario where no joint venture
partners participate and the BBC bears the entire cost. Revealing this figure would in effect
reveal the budget for the joint venture, enabling others in the market to determine what
individual commercial parties to the joint venture would contribute. We have had direct