Digital TV means a massive extension of choice for viewers in a whole range of interactive services. It will present the existing terrestrial broadcasters with fresh threats to their dominant position; but also with fresh opportunities to become involved in areas such as subscription TV, pay-per-view and even video-on-demand.
According to present plans, however, they are no more than opportunities. The evidence suggests that the established broadcasters have neither the inclination nor the inspiration to take advantage of them. Indeed, there is every chance that the digital revolution will be dominated by BSkyB and its leading shareholder, News Corporation, which controls the essential encryption system.
Sky plans to introduce digital services next summer. It has secured a dominant position on the new digital Astra satellites, giving it something like 150 to 200 digitally compressed video channels, together with massive data capacity. Sky is heading for prime position on the information superhighway.
All digital services will require a decoder unit, which will eventually be incorporated inside every television. The market is currently stacked in Sky's favour. The terrestrial broadcasters will have an estimated 30 channels of digital capacity available for over-the-air transmission - far less than digital satellite can offer, but a huge increase on current terrestrial capacity.
But the terrestrial broadcasters have few firm plans about what to do with this extra capacity, and the Government has been slow to allocate it. The cable companies are even less sure what to do with their digital capacity.
Such dithering is potentially fatal. Sky's digital decoders will be satellite- specific: they will not decode the digital signals of the terrestrial broadcasters or the cable companies when they come on-stream. So consumers will have to choose between a decoder unit for digital terrestrial, digital satellite or digital cable - or buy three separate TV-top units.
Since Sky will be the first to get its product to market, it is the Sky box consumers are likely to choose. When terrestrial broadcasters eventually get round to offering their digital programming, they are likely to find few takers if it means that consumers have to buy another box. They will have to abandon the digital revolution - or join it on Sky's terms.
That alone would be dangerous enough for democratic diversity. But digital technology does much more than broadcast television pictures. It is the "platform" on which the convergence of broadcasting, publishing, telecoms and computers will take place. Rupert Murdoch's News Corporation, with its formidable array of media assets, will be perfectly placed to control access to this platform and, as would be only human, to give its own services top positions. The risks for other broadcasters are clear: they could be marginalised in the digital revolution, or squeezed out altogether.
It is clearly not in their interests that this should happen. Nor is it in the public interest, which demands the widest diversity of choice and ease of access, with no single company, institution or individual in a dominant position. It must therefore be a public policy priority now to devise rules to regulate the dominant gatekeepers of the future.
Such rules would include the right to open access to conditional systems on fair terms; published tariffs applicable to all on the same basis; a full and public explanation when access is denied; a legal requirement not to discriminate in favour or against any services, and independent and binding arbitration where there is a dispute.
But regulation is always second best. There is a far more attractive alternative, if Britain's media companies have the courage and imagination to take it. The terrestrial broadcasters should join together with all of Britain's major media players, including cable and interested satellite companies and those print companies with television ambitions, to announce their support for a common platform for digital television: a single decoder capable of receiving and unscrambling all manner of digital services, a one-stop common digital platform to guarantee access to all. Consumers would be able to buy or rent one unit knowing they could receive (and subscribe to) signals from any number of competing digital broadcasters and services.
There is not much time to lose, and much depends on it. The terrestrial broadcasters and other interested parties need to announce immediately that they intend jointly to fund the development of a common digital platform. They need to start acquiring the film, sport and other rights for digital broadcast that will allow them to compete with Sky's formidable offerings.
And government, opinion-formers and the public will have to be convinced of the value of a single digital platform - and of the dangers of dominance if nothing is done.
The emergence of a common digital platform would also make it easier to ensure media diversity in the overall market. It is now right to treat the media market as a whole, to calculate each major player's "share of voice" and to set limits on that share. No group - public, private or a mixture - should have more than 15 per cent share of total voice.
But regulating the share of voice will not be enough. We must strive to keep each major media market diverse as well. The Government has suggested a 20 per cent ceiling on each segment, which I would ease to 25 per cent.
To cope with the regulatory challenges of the future and to help build the structures that will encourage and preserve diversity and competition, we need to create a British Media Commission. The BMC would set the regulatory framework for all media, including the allocation of frequencies where necessary, and oversee the digital revolution. It would have powers to enforce share-of-voice ceilings, to sanction or forbid takeovers and mergers, to force disposals as a last resort.
But regulations can only do so much. The real future of Britain's media is in the hands of those who own and control it. In a recent BBC Money Programme, Mr Murdoch told British broadcasters to stop moaning and whingeing and start competing.
I have outlined a framework and strategy which would allow British media to do just that. It remains to be seen if the folk who run Britain's media have the flair, imagination and guts for entrepreneurial risk-taking to take up the Murdoch challenge, or whether they will settle for comfortable complacency in their existing cosy cartels, while the future passes them by.
This is an edited extract from a lecture given last night to the Royal Television Society.Reuse content