Digital TV set back by DTI delay

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The long-expected award of contracts for Britain's first digital set- top decoders looks like being delayed until next week at the earliest, industry sources said last night.

The shifting timetable for the multi-billion pound digital revolution, which is being led by Rupert Murdoch's BSkyB, is linked to the delayed publication of the Government's guidelines on the regulation of digital television.

"No manufacturer would want to commit themselves to a particular set- top technology until they have seen the guidelines," a Government source said yesterday. It is understood that BSkyB has now decided to await the guidelines before unveiling its own set-top plans.

BSkyB is expected to name up to four manufacturers to build its set-top box, which will give digital subscribers access to as many as 200 channels of television, data services, home banking and tele-shopping. The new service would pave the way for a commercially viable pay-per-view market in the UK, driven by movies and top football.

Among the likely contenders are large box makers such as Pace Micro Technology, Scientific Atlantic, Philips and Thomson. Pace, the newly quoted company, saw its shares rise 8.5p to 233.5p, on speculation that it would be awarded a key contract.

Meanwhile, it emerged last night that the Department of Trade and Industry, which is producing the guidelines, has been approached by several companies in recent weeks to discuss the Government's approach to the regulation of digital television. These include the BBC and several independent commercial broadcasters, including Michael Green's Carlton Communications.

Rival broadcasters have been pushing for explicit promises from the Government that the digital set-top boxes introduced by BSkyB will be open to all, on a fair and transparent basis. BSkyB, which plans to offer boxes at below cost to consumers in order to kickstart the new market, has argued that it should not be forced to bear the additional costs of making the decoders "multi-operational".

The DTI has so far rejected several radical demands for enforced "common interface," which would oblige BSkyB to make its boxes capable of decoding not only its own digital satellite service but even competing systems such as digital terrestrial television. The DTI argues that Oftel, which would regulate the "conditional access" to digital services, has adequate scope to ensure a competitive market.