Whilst Entanet’s General Manager Elsa Chen, agrees that the end of the license fee could be a positive move, leading to a more competitive and entertaining BBC, she argues that the catalyst for such a change is unlikely to be universal broadband.
Chen states: “Whilst abolishing the BBC license fee may not be such a bad idea in principle, especially if it improves the quality of entertainment, the increased availability of broadband and demand for IPTV are highly unlikely to be the catalysts. More likely would be pressure from the industry watchdog, who would be more concerned with ensuring the market remains competitive. Broadband, in its current state at least, is far from a license fee slayer.”
With the much anticipated 2Mbps USC now delayed until 2015, Chen points out, the UK is still some way from delivering truly ‘universal broadband’. She also notes that demand and uptake of IPTV services remains relatively low. “Even if current broadband speeds could support the unlikely dramatic increase in demand for online TV services, many ISPs would struggle to manage capacity across their networks and/or would soon increase the pricing for their broadband services to cover the costs”, she states. “In his report, Mr Graham incorrectly describes the delivery of IPTV services as having ‘virtually zero transport costs’. However, as the Internet industry well knows, this is far from accurate. There is in fact a significant cost in terms of the bandwidth required to deliver this content across providers’ networks.”