Sunday, 23 January 2011

Q: Who is the government commissioning to produce an objective report on the costs & benefits of DAB radio switchover? A: The government

For two decades, the British government has pursued a policy to replace analogue radio broadcasting with DAB digital radio broadcasting. Why? The real reasons might as well be lost in the mists of time (or maybe were never made public). However, this has not stopped the government and its civil servants continuing to pursue the same digital radio switchover policy since the 1980s, despite overwhelming evidence that the surrounding media landscape has changed beyond recognition in the interim.

Because the government policy to replace AM and FM radio with DAB radio had never been decided on the basis of consumer demand, commercial necessity or global standards, it was unnecessary for officials to produce a document that justified it logically. When a government decides that a particular policy is necessary, it can make legislative change happen without recourse to the consumer market outside of Parliament or the Ministries. Politics and the real world do not inhabit the same space.

In the case of DAB radio switchover, the government made no effort to produce a cost/benefit analysis until 2008, when PricewaterhouseCoopers [PWC] was commissioned by Ofcom. However, the resulting 91-page
report did not provide the solid, positive argument for DAB radio switchover that the government had desired. So the PWC report was hidden from the public for a year, eventually to be released and trivialised by civil servants [see blog entry Feb 2010].

In contrast to the government’s unbridled enthusiasm for DAB, the PWC report felt that “the [radio] industry and consumers may fail to see the benefits of digital radio over the longer term.” It concluded that “there are relatively few up-sides to the estimates and several significant downside risks” from its cost/benefit analysis of DAB radio switchover [see
blog entry Jul 2010].

The House of Lords Select Committee on Communications, in a
report on digital radio switchover in March 2010, expressed its dissatisfaction with the government’s attempt to bury the evidence from this PWC report:

“We strongly regret that the cost benefit analysis carried out by PricewaterhouseCoopers was not published at the time it was delivered to Ofcom and the Department for Culture, Media & Sport in February 2009.”

The government
responded that “technical difficulties” had prevented the report’s publication for nearly a year. As excuses go, it would probably have been better for the government not to have responded at all.

After this embarrassing debacle over the PWC report, the government must have wanted to commission a further report that would conclude what PWC had not: that DAB radio switchover is a wonderful thing and that there are sensible economic arguments to justify forcing it upon the British public.

In June 2009, the government’s Digital Britain
report promised: “We will conduct a full Impact Assessment, including a Cost/Benefit Analysis of Digital Radio Upgrade.”

In January 2010, Ofcom’s Peter Davies offered
evidence to the House of Lords Communications Committee that another report would be done:

Baroness McIntosh of Hudnall: “What about your own impact assessment?”

Mr Davies: “We haven’t done an impact assessment yet.”

Baroness McIntosh of Hudnall: “But you have been asked to – correct?”

Mr Davies: “At some point in the future. I think the Digital Britain report said that we would be asked to do one, but we haven’t been asked to do one yet. Obviously we would need to do that and we would need a much fuller cost-benefit analysis before any final decision was taken.”

In June 2010, the government

“We agree that a full impact assessment is an essential part of informing the Government’s decision on whether and when to move from a primarily analogue to a digital radio landscape. Work has already begun to collect the evidence needed to support an impact assessment and analysis should begin shortly.” [emphasis added]

Here we are now, in January 2011, and there remains no sign of the long promised cost/benefit analysis of DAB radio switchover, despite the new government continuing to pursue the digital radio switchover policy of the previous government. However, in December 2010, a document from the Department for Culture Media & Sport [DCMS] (marked “UNCLASSIFIED”) disclosed:

“The Government launched a joint Government and industry Digital Radio Action Plan on 8 July 2010. This Action Plan sets out the process for providing ministers with the information and assurances necessary to make a decision on whether and how to proceed with a Digital Radio Switchover. … Fundamental to the information provided to Government as part of the Action Plan will be a comprehensive Cost Benefit Analysis on the proposals for a digital switchover. … Government is conducting the modelling of the costs and benefits in-house. This research will provide robust evidence of potential costs and benefits to consumers of digital switchover to be incorporated into the Government’s Cost Benefit Analysis.”

So the government has confirmed that the government decision on digital radio switchover will be informed by a government cost/benefit analysis of digital radio switchover that utilises government modelling of the costs and benefits. It appears that, in the case of DAB radio switchover, the government has decided to be judge, jury and executioner too. This smacks more of ‘big brother’ than of the Conservatives’ much touted ‘big society.’

The unclassified DCMS document hinted that the earlier PWC report had not produced the desired results:

“A similar piece of work was carried out by PricewaterhouseCoopers in 2008 to inform the work of the Digital Radio Working Group into the future of digital radio and the potential for switchover. That Cost Benefit Analysis raised a number of caveats, chief among which were the gaps in research into consumer behaviour and willingness to pay. Although the radio ecology has changed since that Cost Benefit Analysis was produced, the document provides useful insights and the recommendations made by PricewaterhouseCoopers on further research remain valid.”

So what will be in the government’s new cost/benefit analysis report? The latest
version of the government’s Digital Radio Action Plan explained:

Carry-out an impact assessment of the options and timings of the Radio Switchover. This will include, but not limited to, the following:
· the costs and benefits of any interventions to enable the switching the migration of all national and large local radio stations to DAB and alternative uses for the analogue spectrum vacated after the Radio Switchover;
· the rural impact of implementing the Digital Radio Switchover;
· Impact on energy consumption of a Switchover; and
· Environmental impact of analogue receiver disposal following Switchover.”

Interesting to see that neither the ‘consumer’ nor the ‘listener’ are mentioned here. For this workstream, the “first report to Ministers” is not scheduled until Q4 2011. It is evident that there is little urgency to execute this new cost/benefit analysis or for it to make a significant contribution at this juncture to any government re-evaluation as to whether to proceed with DAB radio switchover. If a cost/benefit analysis were a genuine priority, why was:
· the PWC report buried in February 2009 for a year
· a new cost/benefit analysis promised by Digital Britain in June 2009 but not prioritised subsequently
· the government saying in June 2010 that “work should begin shortly” on the analysis
· a “first report” of this work now not scheduled to be presented until Q4 2011?

If the government’s DAB radio switchover policy were but a minor issue within the DCMS Ministry, all this deceit, delay and manipulation might be considered trivial. It is not. In December 2010, Minister Ed Vaizey
admitted that he receives more correspondence from angry consumers about DAB radio than about any other issue within his portfolio.

So why are we witnessing such a continued lack of government transparency on the DAB radio switchover issue, despite prime minister David Cameron’s
commitment in November 2010 to make the UK “the most open and transparent government in the world”?

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