BBC Trust Gives Project Canvas The Nod

The BBC Trust has given the go-ahead for Project Canvas, a joint venture involving the BBC, Arqiva, BT, Channel 4, Five, ITV and Talk Talk, which aims to let broadband users get on-demand services through their TV sets.

The Trust – the BBC’s independent regulator – gave its provisional approval in December, but announced it would discuss its conclusions with industry stakeholders and the public before giving its final decision. The final approval brings to an end a year of rigorous consultation, taking into account the value for money of the project as well as its market impact.

“The Trust has concluded that Project Canvas will deliver significant public value for licence fee payers – people with a broadband connection will be able to access a wide range of on-demand content including BBC iPlayer, free of charge, through their TV sets,” said BBC Trustee and Chair of the Trust’s Strategic Approvals Committee, Diane Coyle, in a statement. “We have however applied a number of conditions to the BBC’s involvement in the venture in recognition of the potential impacts on the market if Canvas is successful.”

Industry engagement

The Trust’s conditions include the requirement that the Canvas partners engage with the industry on the technical specifications of the service. The core technical specification is to be published within 20 working days of the final approval, and the final specification will be published no later than eight months before the launch of Canvas set-top boxes.

Other requirements state that the service must always be free-to-air, include accessibility and usability features – such as audio description – and comply with all applicable competition and state aid laws. Quality standards for ISPs delivering Canvas must also be set at a minimum level, and listing on the electronic programme guide must be awarded in a fair and non-discriminatory manner.

Set-top boxes are expected to be available by the end 2010 or the beginning of 2011, costing around £200. The Trust will review the BBC’s involvement in Project Canvas against the conditions of its approval twelve months after its launch.

Project director Richard Halton told BBC news he was delighted about Trust’s decision. “This brings the benefits of next-generation TV to all consumers, including those who choose not to subscribe to pay-TV,” he said. “We look forward to rising to that challenge.”

Opposition from digital TV industry

However, rivals BSkyB and Virgin Media have already raised concerns about the impact of the project on the market, and even questioned whether the BBC should be involved in such a commercial service. In February, The Digital TV Group (DTG) lodged a complaint with the BBC Trust, claiming that the project would be unable to produce an open, industry-wide technology standard which all members could work to.

“There remains widespread concern in the industry that there is a parallel process in place with a Canvas specification being developed between the Canvas joint venture and its innovation partners separately from, and regardless of, the DTG’s Connected TV specification work,” said the DTG in its submission to the BBC Trust at the time.

But despite these concerns, the Office of Fair Trading said in May that it would not investigate Project Canvas over competition issues, as none of the partners was contributing a “pre-existing business” to the service.