The BBC Trust has published details of the proposed Project Canvas to bring broadband and broadcast services together in hybrid receivers. On the face of it seems like a promising plan, but many in the industry have expressed serious concerns about the lack of transparency in the proposals, as informitv can exclusively reveal.

The BBC Executive has asked the BBC Trust for permission to develop a joint venture to promote broadband connected television receivers. This would allow viewers to watch on-demand services, such as the BBC iPlayer and other internet content on their television, which the BBC describes as internet protocol television. The Trust is now inviting views on the public value and market impact of the proposals.

This follows another joint venture initiative known as Project Kangaroo to provide video on demand over broadband. That was blocked by the Competition Commission because it was deemed to limit competition. The two matters are not entirely unconnected.

The concerns over Kangaroo were that the broadcasters involved would effectively limit competition in the provision of their programming to video on demand services.

The concerns over Canvas are that the broadcasters involved will effectively limit competition in the provision of devices designed to view such services on television displays.

Since the proposal was first discussed, informitv has been contacted by a number of companies that have expressed their concerns about Canvas. They range from small independent middleware developers of software for receivers through to major multinational consumer electronics companies.

There are already any number of devices on the market that can connect the television to broadband video services, from media centres to hybrid set-top boxes.

The Canvas project seeks to strengthen the Freeview and Freesat proposition. The expectation is that compatible receivers will be HD Ready and that some will include some form of local storage, such as a digital video recorder.

As with the Kangaroo initiative, the proposed vehicle for this is a joint venture made up of interested public service broadcasters. Specifically, this appears to be intended to exclude Sky, which is currently a joint shareholder in Freeview.

Sections relating to the venture structure have been redacted in the proposals published by the BBC Trust as they are considered commercially sensitive. They appear to indicate that for some commercial reason this initiative is not possible as an extension of the existing Freeview or Freesat proposition and therefore requires a new venture.

Whatever the rationale for this, one can safely assume that it is not a question of technology. It seems more likely to be an attempt to create a successor to Freeview in which the existing public service broadcasters would be the sole shareholders.

Absent from the published proposals is any real mention of the incumbent telecommunications provider BT. Last December, the BBC announced a partnership with ITV and BT “to work as partners to promote a common industry approach and consumer offer to deliver on-demand TV over broadband.”

In the same announcement, Michael Grade, the executive chairman of ITV said “We are delighted to be working with the BBC, BT and other ISPs to bring this idea to fruition for viewers.”

Ian Livingstone, the chief executive of BT also said “We are looking forward to working with the BBC, ITV and other internet service providers to support an open standard for the free to air market in the UK.”

This was seen as part of a strategy that would include Kangaroo, a joint venture video-on-demand initiative between the BBC, ITV and Channel 4.

“Canvas is the platform we need for Kangaroo to realise its bigger ambition,” said a Kangaroo representative quoted in the Guardian at the time. “It is how we get the content from Kangaroo into 14 million homes across the UK. Canvas ties all this together in one bundle.”

The Kangaroo project was killed by the Competition Commission for being anticompetitive. The question in many minds will be whether Canvas is simply a route to the same ends by other means.

Strangely, the proposal from the BBC executive also makes no specific mention of the involvement of ITV, although it talks about including material from ITV, Channel 4 and Five. ITV is, however, a shareholder in Freeview and Freesat.

The BBC envisages the need to have a controlling stake in the venture in order to maintain editorial standards. The proposals promise “Choice to the consumer through open access to all content providers who adhere to technical, editorial and user experience standards”. Examples given include The Royal Opera House and the National Health Service.

The BBC suggests that simply syndicating its programmes is insufficient, although it fails to provide a convincing argument. There is no real reason why its programmes could not simply be made available in a convenient format for any platform or service provider to distribute within the appropriate territory, subject to suitable licensing terms.

All that is really required to be able to access services from broadcasters such as the BBC over broadband is a basic level of standardisation around the provision of programming in terms of media formats and descriptions.

This would not require a joint venture vehicle or regulatory approval and would not run the risk of further concerns about completion law or state subsidy.

As it is, the Canvas project could fall foul of the same competition concerns that ultimately killed the Kangaroo initiative. It can expect vigorous and vociferous complaints not just from competing platform operators but from the entire ecosystem of software and hardware providers that support display devices.

The net result could be further delays. Meanwhile, devices which bring together broadband and broadcast services will become widely available, leading to a proliferation of approaches that will not ultimately benefit the consumer.

If anything, it will accelerate the development of competing initiatives by Sky and Virgin, leading to the perpetuation of platform incompatibility, where there is an opportunity to create convergence and harmonisation through the adoption of open standards.

Ironically, while the BBC says that it needs to maintain a direct relationship with its audience, in pursuing a separate approach for Freeview and Freesat it is only addressing the half of the market that has not elected to subscribe to other television services.

This is not simply a matter for the BBC Trust but is clearly a concern for the communications regulator Ofcom, which has been taking an increasing interest in matters of technical standards.

There is clearly a role for the BBC is demonstrating strong technical leadership and helping to shape the market, as it has done with the iPlayer. The justification for effectively employing public subsidy to establish a separate structural vehicle to create and manage a new platform will only attract attention from the relevant regulators.

While the ambition of bringing together broadband and broadcast services in a way that will ultimately benefit consumers is entirely laudable, the approach adopted is likely to raise many questions.

In reality, all that is required is the publication of a specification of the means by which the BBC and other broadcasters will make their programming available to third-party platforms, services and devices.

Further details of the proposals and an invitation for comments are published on the BBC Trust section of the BBC web site. The initial consultation closes on 17 April, with a second consultation closing on 22 June. The Trust is expected to publish its decision by late July 2009.