Who'll pay twice for Auntie?

The digital age has dawned, and television viewing in the UK is poised for its most radical change since the birth of satellite TV in the Eighties and the introduction of colour in the Sixties. Indeed, this stage in the electronic revolution promises to be even more dramatic. Within two years, we will be offered as many as 200 channels, ranging from all-news services to Hollywood films and sporting events, often at times dictated by the viewer. Digital also promises home shopping, effortless Internet connections ... even online video games. Within 10 years, we may even see a convergence of what are now separate technologies: computers and television. A single "PCTV" could provide broadcasts, video-on-demand, spreadsheets and Internet connections.

But how do we get there from here? The first change for most consumers will be in the way we consume television. The BBC's announcement this past week that it would embrace the multi-channel revolution with the launch of brand-new digital services was only the latest indication of a seismic shift in mainstream broadcasting.

Even before the BBC's planned digital service is up and running, satellite subscribers to BSkyB, Rupert Murdoch's wildly profitable pay-TV service, could be offered up to 200 channels of sport, films, news and entertainment, probably by autumn 1997, when digital satellite is launched in the UK.

By the turn of the century, cable operators will be able to supply perhaps 150 channels over their fibre-optic networks. Even the telephone companies, led by BT, are preparing to offer broadcast services over telephone wires, starting in 2000.

That dwarfs the current television regime, where 80 per cent of us have only four channels to choose from. The rest, one in five households, have subscribed to pay-TV services, obtaining another 30 channels or so from BSkyB or local cable operators.

The digital revolution is the result of two complementary forces: technology and public policy. The technology is simple, if breathtakingly radical. The current "analogue" system allows us to view "broadcast-standard" transmissions but makes heavy use of a very limited frequency spectrum. By digitising TV signals - converting the transmissions into a series of ones and noughts - far more information can be transmitted. That provides scope for more channels, as well as specialised, interactive services such as home banking and shopping.

The Government has been eager to encourage the development of digital services, acutely aware of the constraints of the current analogue system. The Broadcasting Bill, now making its way through committee in the Commons, provides a regulatory framework for the introduction of digital terrestrial television - perhaps the form of digital TV that will prove most accessible to the majority of Britons. Under the proposals, viewers will not need a satellite dish or a cable link. A special set-top box, or "decoder," would unscramble digital signals transmitted conventionally.

If the huge range of digital delivery systems - digital terrestrial, satellite, cable, phone line - is confusing, don't worry. In one important sense, it doesn't really matter how the new digital services are delivered. As the BBC pointed out last week, "no single delivery system will reach all households". As a result, the Beeb says it will seek to distribute its new services - which include a widescreen, high-quality sound format for BBC1 and BBC2, a 24-hour news channel and a range of so-called "extended" services - on all available delivery platforms.

So will most broadcasters. Indeed, there is growing support in the television industry for a common digital standard - a single "black box" capable of receiving digital signals from any network. But there is a danger that the industry will not co-operate. BSkyB, which will probably be the first company in Britain to offer digital broadcast services, could conceivably dominate the market, emerging as a "gatekeeper" through which all digital broadcasters would have to pass. That would mirror its existing near-monopoly over pay-TV in analogue.

Once Sky launches its own 200-channel system, why would consumers bother to pay again to get only 30 digital terrestrial channels? The BBC is hedging its bets, seeking to be carried on digital satellite as well as digital terrestrial. "The BBC will ensure that its programmes are available on all the main distribution outlets," the corporation promised last week.

The BBC's digital plans are impressive. In addition to widescreen transmissions and CD-quality sound, it is introducing a 24-hour news channel and promises"extended" strands of programming to complement its mainstream services. For example, if BBC2 broadcasts a rock concert by Sting, viewers might wish to follow that up with an exclusive interview with the singer, available by pressing a button on the remote control. You mightchoose to call up a menu of services during EastEnders, giving you the latest plot developments or short biographies of the stars.

The BBC also plans to market new, subscription-only channels. These are to be developed in league with private-sector partners, and will be broadcast separately from the mainstream digital versions of BBC1 and BBC2.

This is just a small taste of what digital broadcasting can bring. But it won't be cheap, and the BBC doesn't have the deep pockets of a Rupert Murdoch. Indeed, the switch to digital - inevitable as it is - represents very real risks to the public service broadcaster.

The financial strains are perhaps the most pressing. The BBC puts the cost of going digital at pounds 200m and swears it will not use the licence fee to fund the transition. The corporation is thus poised to push through further punishing budget cuts, and will add to the savings with the proceeds from the planned privatisation of its transmission services later this year.

But there are political problems ahead, too. The subscription channels - arts, old favourites, education and learning - will be branded as BBC services but will only be available to those who pay. It will be difficult in the eyes of some for the Beeb to market commercial services to licence payers. Haven't we already paid once?