Communications infrastructure company Arqiva has joined the BBC, ITV, Channel 4, Five, BT and Talk Talk in the Project Canvas consortium. The partners have set a deadline for other parties to express an interest in joining the proposed venture to establish a platform for broadband connected television in the United Kingdom. The consortium has appointed a chief technology officer from the BBC, although its involvement in the joint venture has yet to receive the final approval of the BBC Trust, pending investigations by the Office of Fair Trading.
Arqiva provides transmission services for the broadcasters involved and is a shareholder in Freeview. It also operates SeeSaw, the online video service that was formed from the remains of Project Kangaroo, which preceded Project Canvas and was blocked by the Competition Commission before it launched. The Canvas consortium may benefit from the addition of Arqiva, but the project could yet face a similar fate.
Pay-television operators Sky and Virgin Media remain predictably unequivocal in their criticism, but many consumer electronics companies have also privately expressed their concerns to informitv.
The partners involved have submitted their reasons to the Office of Fair Trading setting out why the proposed joint venture between all the main public service broadcasters, the national telecommunications and the national transmission infrastructure company does not qualify for consideration by the Competition Commission. The OFT is inviting comments from other interested parties.
Under the Enterprise Act, the matter could be referred to the Competition Commission when there is the prospect of a substantial lessening of competition when two or more businesses come under common ownership or control, resulting in an enterprise with a turnover of more than £70 million or supplying at least 25% of relevant goods or services in the United Kingdom.
That raises an interesting issue. If the aim of the proposed venture is to address more than 25% of the market for compatible television receivers it could substantially reduce competition. If it claims to address less than 25% of the market, one might wonder whether it is an appropriate use of shareholder and licence fee funds.
Freeview, the brand under which digital terrestrial television is marketed in the United Kingdom, accounts for around 40% of the market, with about 10 million homes reliant upon it for their main television reception.
However, Freeview does not control the specification or the user interface of compatible devices, as the Canvas consortium proposes, it simply certifies them as compliant to agreed industry standards.
The partners in the proposed Canvas joint venture do not believe that there is a competition issue, although the move by the broadcasters that deliver the majority of programming viewed in the country to establish a new television platform based on proprietary and as yet unpublished specifications with a user interface that they control may represent a legitimate cause for concern and regulatory scrutiny.
Without the participation of pay-television operators Sky and Virgin Media, the Canvas project can only claim to represent the interests of free-to-air broadcasters. The Canvas consortium has given other companies until 23 April to express an interest in joining the proposed joint venture, and sharing the costs, although they say they are only looking for one further partner prior to launch.
Sky and Virgin Media are meanwhile making their own plans. Sky Player will soon be on the Fetch TV box from IP Vision and Sky has announced agreements with 3View and Cello to make it available on their set-top boxes and network connected televisions. Virgin Media is working with TiVo to develop their next-generation service and plans to roll out its own online video proposition by the end of the year.
The communications regulator Ofcom previously wrote to the BBC Trust advising that there may be a case for consideration under relevant merger or competition law. It warned that “commercially-led propositions which seek to compete with Canvas should not be unfairly prevented from accessing BBC content”.
Sky recently warned the Trust that it should obtain further competition law advice on the matter, particularly with respect to the incentive for the partners to syndicate their programming on other on-demand platforms.
The BBC appears to have been reluctant to make its programming available on some online platforms, unless it controls the branding and presentation. ITV has said it has no plans to make its programming available on other online video platforms. Channel 4 and Five have meanwhile pursued an approach of syndicating their scheduled programming across other platforms, such as the Arqiva SeeSaw offering. That could now end up as one of the brands available on the proposed Canvas platform, where it would compete with those of other programming providers, including the broadcasters themselves.
The technical details of Project Canvas, which claims to be an open platform, remain a mystery to many, including some of those cited as partners and potential set-top box providers. The Digital Television Group, the broadly based industry association that includes members of the Canvas consortium among its members, has repeatedly called for more transparency in the initiative.
Richard Halton delivered the opening keynote at the IPTV World Forum in London, a year after first presenting the project at that event, but presented little further information. He simply described it as distinct from Freeview and Freesat but an evolution of both. Richard Young of BT suggested that Canvas would exist alongside its own platform, BT Vision, although some may be sceptical about the longer term prospects for the latter, based on Microsoft Mediaroom.
The Project Canvas partners have meanwhile announced that appointment of Anthony Rose as chief technology officer. He is currently at the BBC, where he was previously head of digital media technology, leading the launch of the successful BBC iPlayer. Before that he was chief technology officer at Altnet, which was embroiled in copyright infringement litigation with the music recording industry for its connection with the file-sharing software Kazaa. He was cited as a respondent in the case, although proceedings against him personally were subsequently dismissed.
The appointment is currently on an interim basis, as the joint venture does not yet formally exist. The BBC Trust said it will await the findings of the Office of Fair Trading before publishing its final conclusions on Project Canvas later in the spring. In the event that the matter is referred to the Competition Commission, the formal involvement of the BBC could be further delayed.
The proposed joint venture may also require the approval of the communications regulator Ofcom, which has responsibility for the other partners.
The stakes are high. With a general election approaching, the political ramifications extend far beyond the details of technical specifications to the very heart of how television programming will be funded, distributed and regulated in the future.
What is clear is that there are now many suppliers of hybrid broadcast and broadband devices and displays, including some of the largest consumer electronics companies in the world, which brings into question the need for a platform specific to the United Kingdom.
The problem is not a need for new technical standards — if anything there are already too many — but for programming to be made available in a form accessible on these devices and displays on a fair, reasonable and non-discriminatory basis.
The real issue is who will ultimately control the delivery of programming to connected television devices: free-to-air broadcasters, pay-television operators, network infrastructure providers, or consumer electronics companies. Together they represent a complex ecosystem and the reality is that they will all be involved, but if Project Canvas is unable to reconcile their differences it is unlikely to be ultimately successful.