Media giants keen to take advantage

Leading British media companies gave a broad welcome last night to the Government's proposals.

"This can be nothing but good for us," said David Elstein, director of programming at BSkyB, the cable and satellite broadcaster, 40 per cent owned by Rupert Murdoch's News Corporation. "We see this as an endorsement of multi-channel choice, of pay-TV and digital TV. It opens the door to Sky to play the role of a multi-service provider."

Sky already has plans to introduce digital satellite services, as early as next year. These might bring 200 additional channels into subscribers' homes. Mr Elstein hinted Sky could well bid for digital terrestrial licences as well.

Nigel Walmsley, director of broadcasting at Carlton, holder of the ITV licences for London weekday and Central, said: "The move to digital may allow us to expand our television interests and we look positively at all the opportunities."

Mirror Group, which had criticised the Government's proposals on media cross-ownership earlier this year because of the limits placed on large newspaper publishers, found yesterday's discussion paper more to its liking. Kelvin Mackenzie, head of Mirror Television, said: "We are pleased that we as a TV company now have the level playing field in digital that was denied to us in analogue TV."

Under the proposals, broadcasters and other media companies will be able to bid for licences as "multiplex provi-ders," offering a selection of digital programming.

The existing ITV companies such as Carlton, Yorkshire-Tyne Tees, LWT and Granada, will be offered guaranteed access to the digital future, and will be able to bid for additional capacity up to a maximum of 25 per cent of the total available, subject to a a ceiling of 15 per cent of total television audience. In return, they must "simulcast" at least 80 per cent of the existing ITV analogue schedule.

But industry analysts warned the digital world is still years away, and that preparing the transmission system and convincing viewers to buy set- top boxes to receive the signals will cost "tens of millions of pounds".

The Government's reliance on market forces rather than regulation to drive the transition from analogue to digital was also generally applauded. Jeremy Thorp, director of business strategy at NTL, the privatised transmission network used by ITV and Channel 4, said: "We believe the Government has found a good balance."

Concern remained, however, over the issue of conditional access - the system used to encrypt and decrypt video signals. All viewers will require a set-top box to receive even the standard digital channels available for BBC1, ITV, Channel 4 and eventually Channel 5, the proposed fifth terrestrial service.

Currently, only BSkyB has a functioning conditional access system in place and is viewed as having an edge in the transition to digital services. "The chief concern must be not to allow Murdoch to dominate digital television just as he has dominated analogue pay-TV," said a leading television executive.