£50 BILLION FROM ANALOGUE TV SELL OFF

MILLIONS of householders are to be given free digital set-top boxes under plans by Labour to build up a £50 billion election war chest by privatising the airwaves.
Prime Minister Tony Blair, and Chancellor, Gordon Brown, strongly support plans for an early sell-off of the spectrum used at present to broadcast BBC1, BBC2, ITV, Channel 4 and Channel 5.
The auction could take place as early as 2004 accelerating the introduction of digital television, originally planned for between 2006 and 2010. Viewers would gain potential access to as many as 50 free channels.
A report commissioned by ministers, recommends that the government should bring forward the changeover to digital by subsidising or giving away the equipment to households.
Analysts predict that the sell-off could raise at least twice as much as the £22.5 billion yielded last April by the auction of mobile phone licences.
The auction will force the five television networks to switch from analogue to digital broadcasting, making conventional analogue television sets and videos virtually redundant.
Stephen Byers, the trade secretary, is drawing up plans to avoid a backlash from viewers confronted with blank screens. Those who refuse or cannot afford to pay for digital television will be given free decoders resulting in clearer pictures for the existing five channels as well as a range of other free networks.
Ministers envisage problems over the issue of videos or extra television sets in the kitchen or bedroom, which will also need separate decoders. Free decoders are not planned for such sets.
These will include BBC3 and BBC4, the youth and ‘highbrow’ channels announced last week by Greg Dyke, the corporation's director-general, as well as BBC News 24 and ITV2.
However, viewers will have to pay to receive sports and film services from other digital providers such as ONdigital, BSkyB and NTL. Byers has ordered an industry body, Digital TV Group (DTG), to find suppliers willing to manufacture a decoder box that will cost no more than £25.
The frequencies are hugely valuable for either mobile phone companies or television networks because they provide high-quality band-width capable of reaching most of Britain.
ONdigital said the spectrum available for auction was twice as large as the phone frequencies sold in April and could be used for a wider range of new services. It predicts companies will bid a total of £50 billion.
Other experts believe the windfall for the chancellor could be even greater.
Dermot Nolan, an independent analyst, estimates that the figure could be to as much as £240 billion.