The BBC Trust has given final approval for the BBC to participate in Project Canvas, subject to certain conditions. Project Canvas, or YouView as it may be branded, is a proposed joint venture between the BBC and six other partners to develop a new platform for television devices and displays that can access programming delivered on demand over broadband as well as through traditional broadcasts. One condition is that the specification must be published, but critics of Project Canvas remain unimpressed.

Project Canvas is a proposed partnership between the BBC and the main commercial public service broadcasters in Britain, together with two leading broadband service providers and the national transmission service operator. It has faced considerable criticism from pay-television operators and some consumer electronics manufacturers, particularly for its insistence on imposing a standard user interface and lack of engagement with the broader industry.

Some argued that it was not appropriate for the BBC to be involved, or that the objectives could be achieved without such a joint venture, for instance by supporting open standards and distribution models. Others suggested that the project was replicating and potentially compromising other industry initiatives.

Following an extensive period of consultation, the BBC Trust has by and large dismissed objections from critics of Canvas, including pay-television operators Sky and Virgin Media, but has given approval subject to a number of conditions.

The Trust has stipulated that the completed elements of the Canvas core technical specification must be published within 20 working days. The partners in the proposed platform must engage with industry on these and future elements of the technical definition and publish the final core technical specification on the BBC web site no later than eight months before the launch of the first set-top boxes.

This comes in response to concern about the lack of clarity and transparency about the technical standards. It is now a condition of approval that these will be published in the public domain, although not necessarily free of restrictions. The core technical specification will be made available on a fair, reasonable and non-discriminatory basis, while the licence to use the trade mark will be made available to those entitled to use it on a cost recovery basis.

It also means that the earliest that Canvas could possibly launch would be late February 2011, even if that were feasible. That seems optimistic, given the work still required, particularly if the proposed project is subject to regulatory scrutiny or legal which could delay it further. In practice, it could be at least a year before compliant devices are likely to come on the market, by which time there may be many competing alternatives.

The Trust has made other conditions, largely to protect the interests of the BBC, and has insisted that they are incorporated into any shareholder agreement of the proposed joint venture.

Users must be able to access the platform without charge, although they may have to pay for broadband access and for additional pay services provided by third parties.

Accessibility features should be incorporated into the core technical specification and user interface as soon as possible, but are not mandated as some organisations had requested.

Access to the platform must not be bundled with other products or services, and inclusion in the electronic programme guide must be fair, reasonable and non-discriminatory while any operational costs must only be charged on a cost recovery basis.

The venture must comply with all applicable laws, including competition and state aid law and the cost to the BBC must not deviate from the original budget by more than 20% over a five year period.

While the BBC now has approval to proceed, the proposed joint venture could still face further regulatory or legal challenges. The communications regulator Ofcom may have its own views, although it likely to take into account the level of consultation already undertaken by the BBC Trust.

The Office of Fair Trading has ruled that the proposed joint venture between the BBC, ITV, Channel 4, Five, BT, Talk Talk and Arqiva, does not qualify for investigation as a merger, but it did not preclude the application of other provisions of competition law.

Sky and Virgin Media were characteristically critical of the BBC Trust.

Sky called the approval “a predictable decision from a body that has shown little inclination to think independently or set meaningful boundaries on the BBC’s activities.”

Virgin Media expressed disappointment that the BBC Trust had “ignored the significant concerns raised by the commercial sector about the proposal”. It said “Canvas will severely restrict competition and innovation and ultimately this will harm consumers”.

Beyond the pay-television platform operators, the support of consumer electronics companies and broadband service providers will be central to the success of Project Canvas. A real concern is that rather than taking the opportunity to unify the industry around open standards, the initiative could simply result in a platform that further fragments the market.

While the BBC is uniquely positioned to protect the public interest, it is becoming involved with commercial partners with their own competing agendas, while effectively excluding those that have invested in pay-television, platform operators and subscribers alike.