UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 305 iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS COMMITTEE

Digital Inclusion in Wales

Tuesday 17 March 2009

MS EMMA WILSON and MR TOM BROOKES

MR ADRIAN POOLE, MR RHODRI TALFAN DAVIES, MR DAVID SCOTT, MS GWENLLIAN CARR and MR WILF WHITE

Evidence heard in Public Questions 114 - 188

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 17 March 2009

Members present

Dr Hywel Francis, in the Chair

Mrs Siān C James

Mr David Jones

Rt Hon Alun Michael

Albert Owen

Hywel Williams

Mark Williams

________________

Memoranda submitted by Vodafone UK and Apple

Examination of Witnesses

Witnesses: Ms Emma Wilson, Head of Public Affairs, Vodafone UK, and Mr Tom Brookes, European Director of Government Affairs, Apple, gave evidence.

Q114 Chairman: Good morning, welcome to Welsh Affairs Committee, in particular to our inquiry into digital inclusion in Wales. For the record, could you please introduce yourselves?

Ms Wilson: I am Emma Wilson, Head of Public Affairs, Vodafone UK.

Mr Brookes: I am Tom Brookes, Director of Government Affairs here at Apple.

Q115 Chairman: The acoustics in this room are not brilliant so please excuse me if I appear to be shouting at you. Do not be afraid to shout, it will be greatly appreciated by everyone, particularly those sitting behind you. Could I begin by asking a question to Ms Wilson of Vodafone. Thank you for your written submission; in it you describe a very wide range of work on increasing access to technologies. Could you tell us from your perspective what barriers to digital inclusion you feel there are with particular relevance to Wales?

Ms Wilson: First of all I would just like to say thank you for giving us this opportunity to help with the inquiry. As we have pointed out in our submission really there are two strands that we see in terms of digital inclusion. The first is around education and making sure that citizens are empowered to use the technology - often it is a bit baffling, so as you will have seen from the submission there is a lot of work we have done to educate our consumers - and the second, which is a bit more of a challenge, is around network infrastructure. We have invested heavily in Wales and if you look at our 2G coverage it is around 99% population coverage which is comparable with the rest of the UK, but obviously the topography and rurality in Wales makes it challenging for us in terms of some of the not spots in Wales. One of the difficulties is that we have planned investment priorities so we have tended to focus on high density areas where there is more demand for calls, but obviously we are committed to rolling out where we can.

Q116 Mark Williams: In your submission you refer to research you have undertaken into the potential of mobile technology to improve people's lives.

Ms Wilson: Yes.

Q117 Mark Williams: In that research have you identified people's circumstances or groups of people where mobile technology is not an appropriate solution to their lives, and could you say a bit more about that?

Ms Wilson: It is still very early stages in terms of the new research that we are doing, so we have not identified particular groups but I would just say that we do not think that mobile is going to be a panacea for all. We know that government has a desire to put more services online, and we think that is a good thing, but there will always be a need for offline services as well.

Q118 Mark Williams: Is that research being undertaken partially in Wales?

Ms Wilson: It is UK, it is European actually.

Q119 Alun Michael: Specifically in relation to the population of Wales what information do you have about how different groups of people use mobile phones? For instance, there seems to be the general impression that people with lower levels of income and lower levels of education use the full range of applications less than people with higher technical knowledge, and there is also some evidence about the choices that people make about not having fixed line access and therefore being quite dependent on mobile technology.

Ms Wilson: Yes, I did see the Ofcom figures and they did suggest that there was, as you say, a disparity in terms of how people were using the technology. One of the good things about mobile is that we do have a pay-as-you-talk service and that means that price is not really a differentiator, it is fairly cost-effective for pay-as-you-talk customers as well as contract customers. In terms of splitting it down to age groups we do not really have any research that suggests a certain age group will use it more or less than others, but what we are doing as one of the projects that we are currently trialling in our headquarters town of Newbury is called Silver Surfers and we are trying to get people who perhaps do not use the technology as much if they are in an older age bracket to actually feel a bit more comfortable with the technology and use it. What we want to do is try and encourage people to use data services and we do have data services available on pay-as-you-talk as well as contract.

Q120 Alun Michael Do you do segmentation studies on your market and is there any indication of the way that your market or your customer base has changed in Wales over the last few years?

Ms Wilson: We probably do do customer segmentation at a UK-wide level; I am not sure that we do break it down into England and Wales specifically, but I can certainly go away and look at that.

Q121 Alun Michael: Could you follow that up, please?

Ms Wilson: Yes, and I will be very happy to come back to the Committee.

Q122 Alun Michael: As far as your customer base in Wales is concerned obviously you would have a good idea of increased usage, an increased customer base or a decreased one.

Ms Wilson: In terms of data? The figures I have seen are around a 31% increase in use of data and that is across the UK but would include Wales as well.

Q123 Albert Owen: If I could just move on to Apple, which of your services would you say were most effective and least effective at increasing access to technology for people with disabilities?

Mr Brookes: Most effective and least effective. I guess they fall into two pieces and one is on the hardware side of what we do. We have been building accessibility technology into our hardware for about 20 years now. OS10, which is the Apple operating system, now contains a full range of accessibility features built in natively to the platform, so you have got everything from screen readers for those with hearing impairments to a lot of zooming and different keyboard controls for people with sight impairments of one kind or another. We also have built into the operating system support for Braille displays, which are dynamic displays which literally produce Braille under your fingers. What we did there was we worked with all of the producers of Braille displays around the world and have actually built the software drivers for those displays directly into the operating system so you could just plug them in and they will work. All of that is built into literally every Macintosh there is, every Apple computer has all of that functionality. We have also recently introduced talking iPods so the iPod Nano and the new iPod Shuffle will now read you the menus. That is particularly useful on the Shuffle for everybody because it does not have a screen, obviously, but on the Nano it will read you all the track names, artist names et cetera so you can actually navigate around those devices without having to be able to see the screen. We have also introduced closed captioning; there is an increasing amount of audiovisual content on the Web now that uses closed captioning and we have closed captioning displays on the Apple Macs, on the iPhone, the iPod Touch and on the Nano and Classic iPod.

Q124 Albert Owen: Do you consult regularly with disability groups on this? It is not just - excuse me - some geeks in offices across the world devising these new technologies?

Mr Brookes: His name is Mike Shebanek, he is the geek - he is a nice guy. He leads the team on the accessibility development within Apple and in fact they are part not of the final production team - so they do not get to see products when they are finished - they are actually part of the initial design team in all the software. In everything we do, all of that functionality is built-in from scratch. We have done a huge amount of work with a lot of representatives of different disability groups of one kind or another in the US; my job is now to start making those relationships better in Europe as well and we have started talking to, for instance, the Royal National Institute for the Deaf and the Royal National Institute for the Blind. In the US we actually just received the Stevie Wonder Award for being the most accessible technology platform.

Q125 Albert Owen: That is fine. Questions for both of you, please, in what ways could your organisations contribute to increasing digital inclusion in Wales? I know you said you have UK policies but specifically on Wales what more could you do?

Ms Wilson: As we have highlighted one of the challenges for us is about access to infrastructure so we have invested heavily, obviously, but we know there is more to do in terms of 3G rollout. Obviously the economics are difficult but the Government's Digital Britain Report would help us in two ways: the first is about spectrum and liberalisation of a pool. It is quite a dull subject but what it means is that we could use our existing 2G spectrum for 3G rollout and that would make it more cost-effective for some of the difficult to reach areas. The second is really just around the education piece. Again, the Digital Britain Report has a little bit which ties in to Dr Tanya Byron's work on media literacy and there we can see a clear role for Vodafone to help educate in partnership with government.

Q126 Albert Owen: You say that 99% coverage equates to the rest of the UK.

Ms Wilson: Yes.

Q127 Albert Owen: But then you seemed to contradict that by saying it is more difficult in Wales.

Ms Wilson: What I am talking about is population coverage is 99% and that is comparable in the UK and Wales; the difficulty for us is geographical coverage but that is only 1% of the population. Nevertheless, the Government does have a commitment to roll out broadband access for all which we think is a laudable aim, at two megabytes per second. That is where we see a role really for us to help roll out 3G to those difficult areas.

Q128 Albert Owen: Mr Brookes.

Mr Brookes: As far as contribution is concerned there is an infrastructure contribution that Emma has referred to and, indeed, as Emma also said the technology can be baffling. Apple is all about making it not so baffling, that is kind of our aim in life, and as far as the services that we contribute are concerned one of the things we have seen which does not exactly come as a surprise to us but it is certainly new, is that we have recently opened up what is called the App Store which is an online store for little applications that will run on your iPhone or your iPod Touch. There are about 25,000 applications now in the store and they range between free and about £3 or £4 in cost terms, they tend to be pretty cheap and the majority in fact are free. What we have seen is that while a lot of people see technical barriers to putting applications on their computers or making any reconfiguration of their computers - they get worried about whether or not that will work - people have been very open to embracing the applications store and have been downloading all kinds of bits and pieces for their phones, and are seen as much more willing to engage in new technology and engage in new functionality when it is on their phone rather than on their computer. I can think of a few reasons why that would be, but the extent to which people are willing to customise their phone to really make it their own is making a major contribution. Obviously, the other part of Apple's business beyond the actual hardware and technology that we contribute is our on-line services, and probably the most focused one as far as digital inclusion is concerned is that we have recently opened within iTunes a thing called iTunes U which is universities - a somewhat Americanised phrase. It started with MIT in the States and they started putting content on iTunes which was available to a special MIT iTunes within their campus, so people were wandering around the MIT campus with an iPod and could upload lectures and other materials to their iPod and listen to it while they were cycling around or whatever. Then it was realised that most of that content did not actually need to be private to MIT, it could be public, so a lot of it switched over to a public site, and about two million downloads of a Nicholas Negroponte lecture happened in the first week that this stuff was available and a few light bulbs went on in a few places. Now there are about 200 universities in the US signed up and we have got Oxford, Cambridge, Bristol and Cardiff and a number of others now who are also contributing in the UK. The first project we are starting to roll that out to is schools as well. We started that in Scotland in fact and we are talking to the Scottish Education Ministry about literally building an iTunes for Scottish schools. There is a certain child protection element in there as well so we would limit it to Scottish schools and it would not be publicly available. There are therefore a lot of different innovative ways in which we are looking at those kinds of services but education is a key and fundamental part of digital inclusion because the barriers happen when people are not socialised to the technology. If you can get through those barriers early on it is straightforward.

Q129 Albert Owen: You mentioned Cardiff as the only Welsh university in Wales; do you have plans for others?

Mr Brookes: We plan, if we can do it, to include every single university and indeed educational establishment in the country if we can pull it off, but it is a question of rolling it out.

Albert Owen: And lecturers.

Q130 Mr Jones: Mr Brookes, you may be pleased to know that the single most useful piece of kit that I own is an iPhone.

Mr Brookes: Excellent; I am delighted.

Q131 Mr Jones: Which is good news, but is it still the case that it is restricted to the O₂ network?

Mr Brookes: It is.

Q132 Mr Jones: When will you be letting Ms Wilson in on the act?

Mr Brookes: Vodafone do a very excellent job of being the carrier for the iPhone in a number of markets though not indeed in the UK. We have a contract with O₂ and at some stage I guess that contract will need to be renegotiated, but we will see what happens when it does. For the moment O₂ are our carrier and they are doing a good job.

Q133 Mr Jones: Ms Wilson, you have referred to the fact that although you have 99% coverage in Wales in terms of the population there are geographical and topographical difficulties. Could better mobile phone coverage across Wales be achieved if there was more co-operation between various mobile phone operators?

Ms Wilson: I would make a couple of points. First, the operators do co-operate well already; we have an agreement where we share sites and about 60% of our sites are shared. What I would say is that market dynamics are changing so you are seeing things like network deals between operators which will help improve the economics and make those hard-to-reach areas easier to cover. Third, which is really important, is the Digital Britain report, which is looking at universal service obligations. Our company is still looking at that consultation and seeing how that will pan out and what that means for us, but we are aware that Lord Carter has stressed that mobile will play a part in that. Obviously, as we have said, we do support the objective of getting broadband coverage for all and we clearly see a role for mobile within that.

Q134 Mr Jones: But the universal service obligation is not envisaged for some three years hence or so and the difficulty is that a lot of rural areas in Wales are seeing the urban areas shooting ahead while they simply cannot receive mobile phone calls. There is a relatively large village in my constituency, Gwytherin, which has figured in this inquiry before, but it has only just received a commitment to broadband and it has no mobile phone service.

Ms Wilson: We do acknowledge it is a challenge and there are some areas in Wales that do not have television signals, but we do think that the market dynamics are changing and that will help make things more economic.

Q135 Mr Jones: My question was going to be is there some danger that the mobile phone operating companies will simply wait for the universal service obligation to be implemented, or is there any real impetus within those companies to try to roll out more mobile phone coverage ahead of that time?

Ms Wilson: We certainly look at our investment plans and we are looking at how to reach those areas. It is difficult for us when have a fixed pot of capital to prioritise certain areas, and I know that is a difficult message to give out. We are committed to try to roll out sites to those areas that do not have mobile coverage.

Q136 Mr Jones: I understand there is only a fixed pot of capital but I am sure there are many members of the Committee who have got areas in their own constituencies where there is no mobile coverage; is that not a case for more active co-operation among the mobile operating companies now rather than looking at their own individual resources and saying "We simply cannot afford it?"

Ms Wilson: There is and we, for example, have a network share agreement with Orange and that was designed to try and help us reach some of the areas that it was not economic to do. I completely agree that there is a role for more co-operation and the market is starting to deliver that because we obviously recognise that there are areas that are not covered at the moment that we could cover, and the way to do that would be through more co-operation as you say.

Q137 Mr Jones: In terms of Digital Britain the role of mobile in terms of delivering broadband coverage is stressed; in your view can mobile phones offer a serious alternative to a fixed line for broadband?

Ms Wilson: Yes, I think they can. At the moment we would say that the speeds are comparable and the beauty of mobile is really two things, one is that it is mobile so you can take it wherever you go, you have the data cards, you have dongles, you have mobile with your internet. We are also increasing speeds and the technology is developing all the time. The second thing is really about cost: for example, if you have fixed broadband with a provider you probably have to have a contract for a certain term, 12 months or whatever it is, but with mobile you do not, so we have pay-as-you-talk where customers, if they have a bad credit rating, for example, or they are homeless or whatever would still be able to access those services.

Mr Jones: Thank you.

Q138 Mark Williams: Following on from that point on broadband can I just give you a scenario which has affected a lot of my constituents who are left lacking broadband in rural and scattered communities anywhere in the country. A letter goes off to BT, BT come back with a negative, we get back in touch with BT, BT say there are opportunities to use the mobile network to advance broadband in those communities; at what point would you become engaged in a dialogue with local communities, with other providers, in terms of exploring some of the opportunities available to those communities? I appreciate the difficulties and the challenges of the geography, but the debate that we are having and the dialogue that Mr Jones has alluded to, particularly in relation to the challenges of 2012 seem very far removed from some of the communities we represent. We have been told by BT and yourselves that there are alternatives, there are strategies that could be pursued; that message is not getting through to a lot of our constituents.

Ms Wilson: We do have schemes where communities can actually pay for some infrastructure: obviously that is not an ideal solution for everybody but it might be something that could be looked at. We do have the kind of network share deal, as I say, where we are looking at potential sites et cetera, and that has potential for helping reach those areas before the 2012 deadline. I could not give a cast iron guarantee that we will roll out to all of those areas but it is something certainly that we would look at. Obviously the investment model is something that we would need to take into consideration.

Q139 Mark Williams: The message is that some of the collaboration that you have been telling us about needs to be communicated to some of our constituents.

Ms Wilson: I genuinely do believe that the market is evolving and developing so you are seeing the kind of network sharing agreements that will help change the economics there.

Q140 Albert Owen: I just want to push you on the two issues that my colleague David Jones raised about the not spots and leaving it until 2012; then you said that broadband would help the situation. Many of my constituents in semi-rural areas - not just in isolated areas - do not have either, they do not have adequate broadband, they are a not spot for that, and they do not have the mobile coverage. What is going to be done, what is going to be this massive leap forward that is going to connect them up?

Ms Wilson: I appreciate three years is a long way off but the Digital Britain Report where there is a commitment to universal broadband for all is a really important thing. I know we have heard criticism from people saying the speeds are not fast enough, but actually the UK is the only country in Europe that has a universal commitment which we think is a really good thing. Obviously we should aim higher, but it is a good start. Yes it is three years away but actually if we can get broadband to all, be it mobile or be it fixed, that would be a really, really good thing.

Q141 Albert Owen: I appreciate that. You said about sharing with Orange - and I maybe should have declared an interest as a Vodafone customer here - but in my house, which is not very rural, I do not get a signal but next door gets an Orange signal, so where is this joint sharing? The distance is a couple of yards.

Ms Wilson: It is not in every site that we are sharing, it will only be those sites where the network fits - and I am no technical expert here - that is where we share.

Q142 Albert Owen: But the areas that really need it do not seem to be addressed, that is my point. They are not spots for mobile and they are not spots for broadband; the joint sharing arrangement is not there and they really are isolated.

Ms Wilson: One of the other things that may well help - and I appreciate it is a challenge and we do not have a panacea for it - is the spectrum liberalisation. As I said, it is quite a dull subject but what it does mean is that some spectrum would basically be freed up to help us reach other areas and it would make that viable.

Q143 Albert Owen: The irony is that I got a mobile phone call from Ayers Rock in the Outback of Australia and I live on the outskirts of a fairly substantial town and I do not get it, they made the connection. That is stark, and we are not just talking to Vodafone we are talking to all the providers to buck up.

Ms Wilson: I am certainly happy to look at that particular area and take it back and see whether we have got any plans, because obviously I do not have the plans in front of me, but it might be that that is something that is scheduled in - that is something I would need to go away and look at.

Chairman: This will be a very brief supplementary compared with the previous one.

Q144 Alun Michael: Is the argument for co-operation or the case for co-operation basically from the commercial side of the company?

Ms Wilson: It has been, yes.

Q145 Alun Michael: Or from an attempt to achieve universal coverage?

Ms Wilson: There are two things. If you look at the work we have done through the Mobile Operators Association, that has really been about minimising environmental impacts and we have looked to try and find sites and co-operate. There is a good agreement there and that is working, as I say, 60% of structures are shared. The other side of it, the point I made, has really been driven by commercial so it is being driven by the market.

Q146 Hywel Williams: You said earlier on that it is 1% of the population that is not reached; just a simple question, have you or has anyone actually figured out how much it is going to cost, the marginal cost, of getting the extra 1%, either on a Wales basis or on a UK basis?

Ms Wilson: I am sure some very clever people that are better at maths back at my headquarters have. Let me come back to you on that.

Q147 Hywel Williams: Thank you. Just thinking of using mobile broadband as a strategy to reach areas such as my own, which are either mountainous or low density population or in fact both, what are the strengths and weakness of using mobile broadband in those sorts of areas?

Ms Wilson: What we have always said is that mobile will complement other technologies so things like the topography are always going to be difficult and it is about considering all of those technologies to try and make sure that citizens are not excluded, so we see ourselves as part of the jigsaw.

Q148 Mrs James: I want to turn now to the contribution that you are making as commercial organisations. The Digital Britain Report homed in on this: do you think that governments should have the sole responsibility for helping hard-to-reach groups access technology or could your organisations play more of a role?

Ms Wilson: No, is the short answer, we would see it very much as a partnership. We talked earlier about education and that is where we really do have a role. Technology is baffling; we have silver surfers and in terms of child protection, for example, we have actually been leading industry in some of the work at an EU level to try and advise teachers and give them a resource because teachers as well have some difficulties in understanding. It is about playing our part in terms of educating people so that they do not feel completely mystified by the technology.

Mr Brookes: I would broadly agree with that. We have a great deal of experience in using our own technology and we have got a responsibility to make sure that we think about it creatively and that we help other people think about it creatively and use the tools in the best way we can. Education was the market that launched Apple and has been a primary reason for what we do for as long as the company has existed. We do a great deal of everything from actual curriculum development, content development, specific tools for education, we do a great deal of work with teachers and others. We absolutely have a role to play and we need to make sure that people are getting the most out of the technology that they have in front of them. The accessibility tools that we have built into OS10 that I was talking about before - I should not mention names but if one owned a computer that had a different operating system, for instance, you are looking at a cost of about £1,000 to put those functions into that machine whereas with Apple it is all in the box when that computer arrives. Apple's raison d'etre in all of this is to make our technology as usable and as open to as many people as we possibly can; that is what drives us and we have a responsibility to do that.

Q149 Mrs James: With all due respect those are very soft issues. I appreciate you are saying about costs, they are talking about partnerships, they are doing things in kind, but there is a real hard cost, is there not? In your evidence you talk about the topography of Wales and the hard-to-reach areas and we have heard previous evidence here as a Committee from BT for example; they have to access these areas and there is a cost there. That leaves people, like my colleagues have talked about, friends of mine who live in North Wales, very much isolated. They want to be using your technology but what about the hard costs of getting them on board?

Ms Wilson: That is what the Digital Britain Report is really trying to do, is to get that coverage to everybody in terms of broadband. Lord Carter has been quite clear that mobile will play a role in that so, yes, we do accept that mobile will play a role in that.

Q150 Mrs James: And the associated costs?

Ms Wilson: The funding has yet to be decided but I think the assumption is that a range of players will fund it potentially. How that works I do not know, that is something that we are considering as a company.

Q151 Mrs James: Have you any key actions that relate specifically to Wales that you would like to be taking, digital inclusion projects in Wales for example?

Mr Brookes: I do not think we have got anything specific happening in Wales. As I said, iTunes U is probably one of the things that we are rolling out; it is rolling out everywhere but it is also rolling out in Wales. The biggest schools project we have got is currently in Scotland.

Q152 Mrs James: Possibly Wales in the future?

Mr Brookes: Absolutely.

Q153 Albert Owen: If I could move on to risks and regulation, according to Vodafone's written submission here Ofcom confirmed that mobile phones are acquired by, on average, people at the age of eight.

Ms Wilson: Yes.

Q154 Albert Owen: What are the responsibilities of commercial operators and government in protecting vulnerable groups - not just children, but I would be interested in young people in particular.

Ms Wilson: We have done an awful lot of work in this area since 2001. We actually led negotiations on the mobile code which essentially meant that the five network operators put in place barring and filtering; Vodafone has that on as default, you have to prove that you are over 18 to actually access 18-rated content. What we would say is that there are content controls in place; if people want them there they are in place and they can keep them on, and that will help with that, but again I would come back to the point about education - it is really important to educate people and to make sure they understand about the services. Privacy, for example, is a key issue; it is teaching people some very simple things such as not putting your date of birth, your address, all of that upfront and available for everybody to see. Also, the other thing we have done is we have chaired the Home Office social networking guidance which is now in place; that basically means there are things about flagging content that is inappropriate, so it is much easier for you just to flag that content, and again about privacy settings, making sure that they are appropriate for users.

Mr Brookes: From our side we come at it from a few different angles. One of the products we make is a web browser, a free open source web browser in fact called Safari which runs on the Macs and the iPhone indeed. Safari has parental controls built into it, and turned up to their maximum you can actually just pick the web addresses which the browser is capable of accessing. Kids will be able to get hold of those but they literally cannot access anything which is not in the URL list. You can edge back from that to different levels of filtering, and the browser certainly has received rave reviews from those who are trying to make sure that young people only do have access to appropriate content on the internet. We are obviously also a content provider. In iTunes we have again a set of parental controls which mean that you can limit access to an account; you can limit it by rating, if it is for audiovisual content, so if it is TV or movies you can stack them up age by age basically, and on the music side you can limit it by what they call parental advisory marks. There is an industry standard on parental advisory marks and you just say this account should not be able to access anything that is parental advisory. Obviously, to open an iTunes account you need a credit card which automatically applies a certain age limit and with that comes the administrator password as such which lets you set up those parentally controlled accounts. One of the new challenges in that area that we have come across is the App Store, the applications store. It went online first around the time of the US elections and of course we received a huge number of applications that were fairly denigrating to either John McCain or Barack Obama, so obviously none of those made it through the screening process. It is new to Apple to some extent because of course for most of the other content that we sell there is a body which gives it a rating; in the case of music there is a body which decides whether or not there should be a parental advisory. Web applications are a new thing so we have kind of put in place our own systems there and we screen every single application which goes up on the store, you cannot put an application up on the store without it going through Apple. We have applied some basic rules of saying anything that somebody might find insulting, broadly, we will not go for; of course, hundreds of applications get sent to us that involve pornography of some description and obviously none of those go up. What is very important in the digital space, particularly from a content perspective, is if you want people to be able to embrace technology and feel included they have got to trust it; it is particularly a problem for parents of young children or those responsible for young children because not only do they feel they cannot really trust their child to the technology they also feel a certain distrust in it themselves; it is a barrier that goes up the generations. It is therefore very important to have trusted spaces and trusted places and obviously organisations like the BBC have done a great deal of work on that and they carry a certain brand with them. Obviously from the Apple perspective we are in reality actually a relatively small company but we have a very big brand and we are obviously very, very keen to make sure that the value of that brand and the quality of that brand is maintained. One of the things that we have an absolute commitment to doing is making sure that we do not inadvertently become pedlars of things that we would not want to share with our own children, so we have put a lot of technology in place and thus far it has worked.

Q155 Albert Owen: You have answered my next part really with regard to the initiatives that you have got; do you think government could do more and should be doing more?

Ms Wilson: As a result of Dr Tanya Byron's review there is a new council for child protection that has been set up. That is a really good thing; we are actually on the executive board of that council and it will look at things like privacy, it will look at how to educate consumers, but there is a clear role, as you pointed out, in terms of education, not just for children and their parents but across the board. If there is a role for government I would say it is to work with industry and other partners to get that education out there, to help empower people so that they can use the technology and they are not frightened of it.

Mr Brookes: It seems to me that it is a huge focus for a lot of different pieces of government right now - from a privacy perspective, from a law and order perspective as well - so it seems to me there is a great deal of work going on and most of it is very effective.

Q156 Albert Owen: A final point. You touched on data sharing, and an issue that has been in the news very recently is people who buy mobile phones in particular finding out that they have got insurance companies getting in touch with them almost immediately and stinging them for high prices. Of course they are vulnerable at that time due to the fact that they have purchased something and they feel the need to insure it to the maximum value. Is there something that can be done by operators to alleviate that problem - particularly for younger people who are maybe buying their first mobile phone - of being told immediately? In this case from what I understand credit card details were given but they did not have much of a cooling-off period; they purchased it and then other companies were just harassing them to get insurance straightaway.

Ms Wilson: This is not my area of expertise but what I would say is that Vodafone does not share data with third parties unless consumers have consented to us doing so, and we do abide by the data protection regulations. I will happily take that away, look into that and come back with a more informed answer for you.

Albert Owen: Thank you.

Q157 Mr Jones: Mr Brookes, you were speaking a moment ago in terms of the importance of developing a trusted brand. You cited the BBC as an example of a trusted brand; presumably you would not include Russell Brand in that and everything that happened to the BBC in the wake of the Russell Brand/Jonathan Ross episode. The point I am making - and it is not entirely facetious - is this: there was a strong call after the Russell Brand episode for more regulation of the BBC. Do you think that a time is going to come when there will be a call for more regulation of the online sector, and that in other words self-regulation, the development of trusted brands, will not be sufficient?

Mr Brookes: The first thing to make clear is that obviously I do not speak on behalf of the BBC; they are more than capable of looking after themselves.

Q158 Mr Jones: You prayed them in aid.

Mr Brookes: Absolutely, I have a great deal of respect for their brand. I think I read over Christmas that Andy Burnham, the Culture Secretary, was indeed talking about some form of ratings system for online content and there has been discussion of a wider almost kind of MOU type approach that I believe would also engage the US in order to look at all of it broadly. Whether or not that is strictly relevant in this particular Committee I do not know, but I think he was referencing English language content in fact. It seems to me that the Government is thinking along those lines, or certainly Mr Burnham seems to be thinking along those lines. So far as we are concerned most of our services are based on either sale or rental of established content, so it is films, it is television programmes, it is music, with the applications that come with those. Once you get into debates about user-generated content it is certainly very important that new services have their chance to grow. In a way when describing the media you cannot really just use the word the internet because that can be a huge plethora of things; it is reasonably comparable to television, to magazines, to a whole bunch of things that never existed prior in the media world, the music industry et cetera. It does all of those things, so saying that you can regulate the internet is kind of like saying you can regulate the world. It would certainly need to be looked at very carefully as to all the different kinds of services that people are accessing and how they do that. CNN.com is not necessarily comparable to the television channel CNN and you cannot necessarily treat those things in the same way. It is a very complex question and there are ways and means it will need to be looked at.

Ms Wilson: Can I just add a little bit because obviously we have been looking at this issue as well quite closely. One of the misconceptions is that the internet is not regulated and if you look at things like the AVMS Directive there are clearly plans to bring forward regulation and to bring the internet into line with broadcasting et cetera and there is also the Internet Watch Foundation, which is a list that all mobile providers have, basically to block access to illegal images. What I would say about self-regulation is that it is much more flexible than formal regulation, so we can move more quickly than having to implement a piece of legislation and the pace of technological change is so incredible that there will be a need for self-regulation. The other point I would make about self-regulation is that we do believe that it should be independently reviewed. It needs to be credible; you cannot just say go away as an industry and regulate yourselves, it needs to be reviewed independently.

Chairman: I am very conscious of time, this will be the last question.

Q159 Alun Michael: I just want to ask you please not to use the term self-regulation. This is co-operative regulation in which the industry is working with government and others rather than top-down regulation. Self-regulation has a bad reputation; the sort of thing you are talking about has a good reputation.

Ms Wilson: You are absolutely right, yes.

Q160 Chairman: Thank you very much for your evidence today and your earlier submissions.

Mr Brookes: Thank you very much for the opportunity to speak.

Memoranda submitted by BBC Cymru Wales, Digital UK and Digital Switchover Help Scheme

Examination of Witnesses

Witnesses: Mr Adrian Poole, Head of Technology, BBC Cymru Wales, Mr Rhodri Talfan Davies, Head of Strategy and Communications, BBC Cymru Wales, Mr David Scott, Chief Executive, Digital UK, Ms Gwenllian Carr, National Manager for Wales, Digital UK, and Mr Wilf White, Director of Policy, Digital Switchover Help Scheme, gave evidence.

Q161 Chairman: Could I welcome you all to the Welsh Affairs Committee and in particular to this inquiry into digital inclusion. For the record could you all introduce yourselves, please?

Mr White: I am Wilf White, Director of Policy for the Digital Switchover Help Scheme.

Ms Carr: Gwenllian Carr, National Manager for Wales, Digital UK.

Mr Scott: David Scott, I am Chief Executive of Digital UK.

Mr Davies: Rhodri Talfan Davies, I am Head of Strategy and Communications, BBC Cymru Wales.

Mr Poole: Adrian Poole, I am the Head of Technology at BBC Cymru Wales.

Q162 Chairman: Could I begin by asking a very straightforward question to all of you in turn. What are you doing in your respective organisations to increase digital inclusion in Wales? Perhaps the BBC could start?

Mr Davies: There are a number of areas where the BBC is supporting digital inclusion. There are a number of innovations: the creation of bbc.co.uk has clearly played a very leading role in driving take-up and adoption of broadband in the UK and in Wales specifically and clearly BBC Wales offers a number of very popular websites in both Welsh and English. That innovation has continued clearly in the last 18 months in terms of services like iPlayer which obviously are offering on-demand access to our TV and radio content and again has surprised even us internally in terms of the amount of public interest and demand for that service. We can also play a role clearly in the broader areas of news and sport provision online - they are the biggest drivers that we have of online usage in the BBC and the extent of our services in Wales, again in both languages, is also a key element in terms of supporting general access. If I might just make a final point, there is a role for the BBC in terms of increasing awareness of our services and broadband content. The BBC has very significant marketing power and is able to increase, as I say, awareness of the range of reference services available in Wales.

Q163 Chairman: Mr Scott.

Mr Scott: The role of Digital UK is to co-ordinate the switchover from the analogue to the digital television service and to roll out the new digital terrestrial network we need to use the frequencies which have been allocated at the moment to the analogue transmitters. What we will be doing is rolling out the digital network to all the transmitters in Wales - over 200 transmitters. Presently the digital terrestrial network is on less than ten transmitters and reaches 63% of Wales; after switchover we will get to 98% which is slightly more than the analogue network gets to at the moment which is 97.8%. The requirement for the rollout is set by Ofcom and licences are in the BBC Charter so we are delivering the network as defined by the regulator.

Mr White: The Digital Switchover Help Scheme has a very specific mission; our aim is to ensure that no one over 75 or who is severely disabled or in a care home loses out at switchover. We want to make sure that everyone in those categories has had the offer of help and, if they have asked for help, has had digital equipment so that they keep receiving digital TV through switchover.

Q164 Chairman: If I could now turn to the Government's Digital Inclusion Action Plan, could you briefly - starting again with the BBC - tell us what you think are the strengths and the weaknesses of that plan?

Mr Davies: We are working with the UK Government at the moment in terms of our response to that plan, but our intention is that by the final Digital Britain Report we will have supported development of a clear media literacy plan, a cross-industry plan. In terms of the BBC's response we recognise there are areas where we can make a greater contribution. I think there are areas where we can co-ordinate across our own portfolio of digital services more effectively, I think there are areas where we can help other public services, where we can help users access other public services. There was talk in the earlier session about the power of the BBC brand and the element of trust; there is more that we can do to help people discover other people's content through the BBC's services, so there is a range of areas where we will be able to make a contribution.

Mr Scott: One of the advantages of the digital switchover on television is that within about two-thirds of the frequencies which are presently used by the analogue network, which transmits as you know four or five channels, we will get 20 to 40 channels and one third of the capacity will then be available to be freed up for other purposes. One of our tasks is to work with the Government and the regulator to get those frequencies clear so that they can be relicensed by Ofcom for other purposes.

Mr White: Again, my focus is very specifically on my target group and for them digital switchover can be seen as a bit of a threat. My job, along with Digital UK, is to persuade them that it is not a threat but an opportunity and there are real opportunities for them in getting more and better services than they currently do now, more and better coverage than they currently do now.

Q165 Alun Michael: We have had some information from the BBC about broadband take-up in Wales and the variations. You told us that your audience research says "the main reason for not having the internet at home for half of the unconnected is that they think they have no need of it". Is it disappointing to you that a lot of the initiatives you have taken to make the use of broadband attractive and to get across the point of relevance seem to have attracted those who are already connected rather than reaching those who have not seen the point of being connected?

Mr Davies: We need to see the development of the broadband market in its historical context. We have seen very, very rapid take-up of broadband in Wales over the last five to six years from effectively a standing start, so to be in a position where our research is showing that we have 50% plus adoption in Wales is an impressive achievement.

Q166 Alun Michael: But, again, is that not through people who had a connection taking advantage of the greater connectivity, the greater band width?

Mr Davies: Certainly in part it has been about the conversion of people who were on dial-up internet access moving to broadband, but the market itself has grown, it is not just a case of people migrating from one service to the other and, as I say, in services like iPlayer and also a project that we are currently developing called Canvas, which is about giving televisions internet access so that through the television screen you can access internet on-demand content, those types of services look like they have the potential to grow the overall broadband market.

Q167 Alun Michael: That is understood, but our focus is on digital inclusion and therefore we are looking at the people who are not online; that is the specific remit that the Committee has taken on. This suggestion that people cannot see a purpose in it is a big challenge, and I go back to the question I asked first, is it disappointing to you - and how do we get over this - that despite the considerable efforts you have made to explain and attract people to things that are of relevance to them, it does not seem to have massively accelerated the numbers?

Mr Davies: There has been quite rapid progress over the last few years but there is still a significant constituency in Wales and across the UK who are not yet persuaded that broadband internet access offers them sufficient benefits to make that jump. As I say, in continuing to innovate - I talked about the number of services that we are currently developing - there is the opportunity to grow that market. There are a number of areas that we are currently working on. We are working on an earth portal to gather all our climate and environmental services, Formula 1 returns to the BBC which will be a major internet and broadband proposition, not just a TV proposition; there is a range of services that the BBC is developing which will take us beyond that current threshold.

Q168 Alun Michael: With respect that is answering a different question to the one that I was asking. Growing the market is one thing, increasing incrementally the number of people who take up the service is a good thing, getting people who are already connected to widen the range of use that they make is all very good, but the issue of reaching those people who have not yet seen the relevance for them of going online is the really big challenge of digital exclusion. Who do you think needs to do what in order to reach that group?

Mr Davies: I am not seeking to play that down, the BBC particularly has a role to demystify some aspects of new technology. If you look at some of the initiatives we have taken with services like Webwise and Computer Tutor, these are interactive services which are intended to take away some of the complexity and some of the barriers that people have to take-up, particularly among some of the older age groups. There is a major educational role for the BBC in taking away some of those barriers that seem to exist with some groups in society. If I could just refer to one initiative, BBC Wales has been very proactive over the last three years in rolling out what we call a community strategy which is actually taking the range of BBC Wales services that we offer out to different communities right across Wales. What that does is it gives elements in each community, groups of people, the opportunity to see our services up close, to interact with them and see how they work. What we find after that is that there is greater understanding of what we do and, frankly, less fear of making some of those digital jumps.

Q169 Alun Michael: Local is the answer to some degree then.

Mr Davies: It is part of the answer; there is nothing like showing people the technology up close in terms of convincing people of the benefits.

Q170 Alun Michael: From that experience can I just come to the other side of the coin, to what extent if people are not used to using the technology and therefore do not feel in control are they put off by a degree of fear or a feeling that they are not quite sure how to be in charge of what is happening?

Mr Davies: It is a complex mix. Price is still an issue for some, even though broadband access prices have fallen quite significantly. There is a fear factor for some; some people will not have broadband access at home because they have access at work and they have access at other places. There is a whole range of different factors for why some households have not yet made that migration to broadband.

Q171 Mr Jones: Are there any particular challenges in Wales to the modernisation of the broadcasting network? Mr Scott, perhaps you would like to start.

Mr Scott: Thank you. The topography of Wales, as you were discussing earlier, presents some significant challenges and that is why for the broadcast network we have over 200 transmitters trying to get over and around hills and into valleys. Let me just put that into proportion: that is over 20% of the transmitters for the whole of the United Kingdom, so it is disproportionate in scale of population. The network is well-designed, we are confident that we will achieve a greater coverage with the new digital network or at least equal to the analogue network when we have built the transmitters and turned up the power. There are other issues, there are issues of overlaps of signals coming from different transmitters and how you receive them - it is very complex to explain in terms of how we make certain that people get the signals they want and to retune their boxes to get the right signals. Those are challenges which we will be addressing and communicating.

Q172 Alun Michael: Can we go back to the point Rhodri Talfan Davies touched on which is the availability of a variety of services through television access. What do you see as the likelihood of developments in that area and what do you see as the opportunities in digital switchover for an expansion in the relevance of that and the accessibility for a wider range of people?

Mr Davies: There are a great many opportunities. If you look at the discussions that are ongoing around HD (high definition) services there is the opportunity across all platforms, including freeview, to offer a very rich audience proposition, so that work is ongoing. I mentioned a project called Canvas earlier, that is a partnership that we are currently working on with both BT and ITV which is to develop a common standard so that we can deliver broadband-enabled services through the television, so these discussions that we have had over a number of years around the opportunities of convergence are increasingly opening up to us. Increasingly what we are seeing with services like iPlayer is a change to audience expectation. Initially with things like radio player and now with iPlayer delivering television services on demand I think that audiences are becoming quite platform-neutral, what they want to see is the mix of services they can get, and it might be a mix of satellite or terrestrial or broadband. There will be a slow adoption curve and it may focus on particular audience groups initially but we are in quite an exciting transitional period here where some of those technologies will start to come together.

Mr Scott: I share that view. I think that one of the aspects of the digital switchover is that perhaps we can take people over a step of fear of technology; I would hope that we will be able to make the transition as simple as possible for people and maybe once they have taken that step and have got a digital television they might think about other digital services.

Q173 Alun Michael: Is that something that is being planned for specifically and do you think, particularly in relation to public services and communications, there is adequate understanding of the potential?

Mr Scott: My task at Digital UK is very precisely focused on the switchover of television services but I do know that Lord Carter in his Digital Britain Report is thinking very hard on how one might draw on the experiences of switchover and Digital UK and look at these other services.

Mr Davies: Chairman, could I just add to that because you raise a very important point which is about the complexity of messages and, particularly in Wales at the moment, the key driver is to get over this transition to digital television. There are lots of layers of additional services and audience propositions that we can develop but I suspect there is actually quite a priority at the moment to try and keep some of the messaging fairly straightforward.

Q174 Alun Michael: I can see the need to keep the messaging simple but at the same time there is a specific opportunity, is there not, with the switchover? One of the examples would be the issue of audio description where availability to people and take-up has been the issue in the past, but the opportunity of the switchover is to make that available to a much wider range of the specific people who need it, which comes back to the target audience of the support scheme.

Mr White: If I may answer that, yes, the Help Scheme are very conscious indeed that the availability of subtitling and audio description is something that is very important for the group, and the box that we give you if you ask for help from the Help Scheme has been specially designed with support from organisations like the RNID and the RNIB so that, for example, it will give you with the press of a single button immediate access to both subtitles and audio description. Yes, we think that is a driver among some groups towards digital TV. Audio description you cannot do in the analogue world; it is a very exciting service, we are doing our best to raise awareness of it and to make it as successful as possible.

Q175 Mrs James: I wanted to turn to what we have learned from the digital switchover process. Is there anything that we can learn regarding how to involve hard-to-reach groups in new technology, because obviously you have been doing a lot with informing people, bringing people on board. Is there anything that you can pass on so to speak?

Mr Scott: There are a number of things. Our communication campaign is one where we put leaflets into every home but in addition to that we have captions on the television screen, we have a lot of advertising on radio and television, but one of the most satisfactory features is where one can engage the local community, both with our road show events and through our charity partnership. Digital UK has a contract with a company called Digital Outreach Limited which is an organisation set up by Age Concern, Help the Aged and Community Service Volunteers, and that does try to really use their networks to access people as switchover approaches to provide encouragement, support and guidance and I think it is a very encouraging development.

Q176 Mrs James: Mr White.

Mr White: From the Help Scheme point of view of course this is absolutely crucial because we are acutely conscious that the people most in need of our help are often the hardest people to reach, the people who are most socially isolated, who have real difficulty understanding new technology, who have few friends, who do not have the social networks that support most of us. We have therefore put a lot of effort through our contractor eaga and their own networking activities, through working closely with Digital UK and Digital Outreach Limited and by doing our own research in looking at how to reach this group best. That means really close engagement with the voluntary sector and also with people who visit people in their homes, everything from Meals on Wheels to the local vicar. We are trying to get out to everybody who has contact with these people because they often rely on the advice of a trusted friend even if they have no family; somebody who is a regular visitor to the house will get more trust than any number of television advertisements or pieces of paper through the door, so it is the human touch that we try and aim for.

Ms Carr: Can I just add as well that the work we have been doing locally across Wales as well, especially now with our partner Digital Outreach. We have actually started work in West Wales and we have also appointed the agencies who are going to be leading the work in North Wales as well, and we are looking for agencies now to lead in Mid Wales and in the South East. I think what we are doing is actually quite empowering because it is very much getting the lead organisations in each area to train up other organisations, so it is a cascade effect to other smaller organisations which are very much embedded in local communities and training them to speak about switchover and include switchover in the work that they do from day to day as well. That does create a lot of confidence and hopefully a level of trust locally as well which is very important for us.

Q177 Mrs James: Could some of the money gained from the digital dividend be used to support digital inclusion projects?

Mr Scott: I am afraid that is not really a question for me, it is for the Government and Ofcom to decide what should happen to the proceeds. I am afraid I have no role in that one.

Q178 Mrs James: Has anybody else got any comments on that?

Mr White: I am afraid that is a question for Government but we are doing a great deal, both as the Help Scheme and with Digital UK to raise awareness of digital television, and there are opportunities down the line to learn from the switchover process in the promotion of broadband as David mentioned earlier.

Q179 Hywel Williams: Mr Davies, can I ask you some questions about the provision of DAB radio in Wales. You say in your submission that about 55% to 60% of the people in Wales are unable to receive Radio Wales or Radio Cymru. Given that the audience for Radio Wales and Radio Cymru is regionalised - I get the impression that Radio Wales serves the Valleys and perhaps the East and Radio Cymru serves the West and the North - does the 45% to 50% coincide with where your target audience is?

Mr Davies: You raise a very important point. Both stations enjoy audiences across Wales but certainly in the heartlands of those two audiences, Radio Wales in the Valleys and Cardiff area and Radio Cymru in West and North West Wales, there are particular issues in both areas. Our estimate with Radio Cymru is that about 70% of Welsh speakers currently are unable to receive Radio Cymru on DAB because of the specific regional issues in West and North West Wales. It is clearly an issue that we are lobbying hard on, we have had extensive discussions with Ofcom around this and I think in Ofcom's submission to this Committee they have described the licensing process that is required in order to extend Radio Wales and Radio Cymru. The reality is that that is an enormous challenge because of the geography of Wales and particularly because of the cost of providing local multiplexes in some of those less populous areas. There are partial answers: clearly, broadband delivery is increasing the availability of our services, there is extensive FM coverage for Radio Cymru across Wales but we are very focused on the DAB issue and we are working with Government and with Ofcom to try and do what we can to accelerate that process. I cannot pretend it is easy; the economics are incredibly challenging at the moment.

Q180 Hywel Williams: The net effect of this is that you might see your target audience or your core audience actually largely disappearing for a short period of time.

Mr Davies: What we are actually seeing, if you look at Ofcom's numbers and the numbers that we have submitted in our evidence, is that DAB take-up in Wales is very regionalised, as you would expect. There are significant parts of Wales that are really quite resistant to moving over to DAB, either because there is no coverage, which makes complete sense, or because there is only partial coverage or a more limited service. There are very significant challenges.

Q181 Hywel Williams: Are you aware as to whether the audience is aware of the forthcoming situation where they will not be able to receive Radio Wales or Radio Cymru on DAB?

Mr Davies: I am sorry; I do not quite understand the question.

Q182 Hywel Williams: Are people out there, the audience, actually aware that this is likely to happen in the near future?

Mr Davies: Our audiences across Wales are fairly vocal on this issue. When we do public meetings around Wales and in the correspondence we receive it is a constant source of annoyance, particularly where the BBC's UK multiplex is available, so the BBC's network stations are available but Radio Cymru and Radio Wales are unavailable. That is also a source of aggravation but it is the result of a piece of legislation that requires a commercial multiplex to be provisioned in order for Radio Wales and Radio Cymru to be made available. It is, as I say, a source of considerable irritation and annoyance to the audience.

Q183 Hywel Williams: In a situation where Radios 1, 2, 3, 4 and Five Live and the Asian Network are available but Radio Wales and Radio Cymru are not how do you propose to meet people's concerns? What is your statutory timetable for doing something about this, because you do refer to an action plan?

Mr Davies: The BBC is next week, I think, making a submission in response to the Government's Digital Britain Report and I believe it will discuss the issue of the BBC's nation stations and the lack of coverage on DAB for those stations. It is, as I say, a difficult issue. It is one the BBC is very engaged in and one that we need to push forward, but there are no simple solutions, there are no easy answers and quick wins in terms of moving the stations onto different multiplexes, extending regional coverage. Ofcom in their evidence make the point that they have now licensed many of the areas across Wales for local commercial multiplex operations but it is quite a different question as to whether those areas will actually be provisioned with DAB. For example, the Wrexham area was licensed quite a while back but there is still no local DAB service there and it is unclear what timetable the licence-holder is working to in order to provide those local services.

Q184 Hywel Williams: Can you let us into the secret - if it is a secret - of your action plan, what are you intending to do about this? You have said it is challenging a number of times.

Mr Davies: There is no magic panacea on this. It is a cross-industry issue and, as I say, the BBC is actually reliant on commercial operators in order to provision Radio Cymru and Radio Wales, so it is not an issue on which the BBC can act alone, we will need to act in partnership with a whole range of industry providers. I am afraid there is no single answer on this other than to reassure the Committee.

Q185 Hywel Williams: Forgive me for pressing you but do you have an action plan? Do you have a plan for what the BBC is going to be doing?

Mr Davies: There are a number of options the BBC is currently looking at internally and discussing with a number of external stakeholders. At the moment I could not tell you what the details of those proposals are, but there are a number of them. I would caution: there are no simple answers here, simply because of the economics of providing those local multiplexes.

Q186 Hywel Williams: I am sure we will have to come back to this at some point. Can I just ask you one further question: are you aware of the effects of having of this limited coverage of Radio Cymru on DAB, the effects that has on payments to people who produce the material, paying the talent as it were. I understand that the PRS payment for Radio Cymru is under 50p per minute whereas digitally provided services throughout the UK such as Radio 1 or the Asian network are paid at a rate of more than £6 per minute. Am I right in that supposition and what are the effects on the generation of content through the medium of Welsh?

Mr Davies: Forgive me, I do not know the answer to that but I am happy to provide that information.

Q187 Mr Jones: I am interested in the future of DAB because it seems to be a peculiarly British technology and I am really wondering if we have actually entered a technological cul-de-sac because it has not really been taken up overseas, so far as I know, to any great extent. Commercial operators have been deserting DAB - the Jazz was quite widely publicised recently. Do you honestly feel that DAB has a future or do you see that Britain may be moving towards some other platform such as DAB Plus or maybe even internet radio.

Mr Davies: I might bring Adrian in here in terms of the technology answer but let me make clear that the BBC is very supportive of DAB. All the evidence we have seen where DAB is provided is that it has significant appeal to audiences, it offers them an enlarged range of services and it actually increases listening. Radio listening overall had been in some shallow decline for a number of years and what we have seen in the homes that do have access to DAB is an increase in listening but you raise an interesting issue around a mixed ecology. We have moved from a situation of medium wave and FM to a situation where we have a whole range of different devices - broadband, digital television, DAB, a whole different range of ways of accessing radio content, so notions of universality, whilst easy to say, are very difficult to fund, so we are in an uncertain transition at the moment.

Q188 Mr Jones: I am just a bit concerned that DAB may become a betamax technology and it does seem to me that commercial operators are deserting DAB.

Mr Poole: As a technology it is a good, stable, mature technology. At the moment if you look at what is available to replace it for in-car listening there is not anything out there at the moment. The difficulty for the commercial operators is finding the right business model, and that is something that we need to work with the industry on. If it was not DAB, what would it be? I do not think there is a technology out there at the moment that would provide the in-car listening.

Chairman: Thank you all for your evidence today and also for your earlier written submissions.