Highest-bidder spectrum sales short-change PSB. By Andrew Bethell.

The second Ofcom PSB review is underway and the big questions are all too familiar: how will public service broadcasting survive when the means of distribution fragment and multiply? Do we need to clip the wings of the terrestrial big five and, if so, how do we do it so they go on being financially viable? Whose needs will win the day: consumers or citizens? The way things are going it is hard to see how the poor old citizen is going to get his or her public service content, however much the BBC hangs in there to fill the gap.

But this is not the only Ofcom review where the fate of public service broadcasting is up for grabs. The Digital Dividend review is due to report at the turn of the year. It will lay down the terms under which the extra spectrum released by the digital switchover will be sold off. It is a wide and complex issue involving HDTV radio mics and a multiplicity of new media options, but the central issue is of special interest to small digital channels with a pure public service remit like Teachers TV. How much of the released spectrum will go to digital terrestrial tele-vision and who will get it?

The current DTT platform is constrained by a shortage of spectrum. With Freeview penetration rising much faster than satellite or cable, market forces have driven up the price. Current slots are dominated by the big five terrestrials (gifted their spectrum) and those that can afford to muscle their way into the multiplexes. As it stands there is no room for us. A 24-hour slot sells at auction for between £10m and £12m and that represents more than 150% of our programming budget.

So the digital dividend should be good news for us. A chance to access some DTT spectrum at a cost that is commensurate with our status and budget and allows us to transmit a social benefit to even more teachers, parents and children than we do now. Only, as things stand, we won’t. Ofcom is arguing strongly for a “market-led approach”. Spectrum will be sold to the highest bidder and the companies with the biggest pockets (think telcos and the 3G auction) will do the grabbing and make their money back on what they don’t want through a secondary market, which will reflect the same cost levels. So once again, genuine public service or, as we like to call them, “social broadcasters” will not get a look in.

Now Ofcom makes some very persuasive arguments for letting the market decide who gets the dividend. It is true that handing out cheap spectrum for good causes could well reduce incentives to genuinely meet the public good. Ofcom also claims that its objective is “to maximise the value that the use of this spectrum is likely to bring to society over time”. The trouble is the market has a very poor record when it comes to generating and transmitting content likely to bring social value.

There is an alternative and it does not mean handing out Freeview channels for nothing (a course which would deprive the Treasury of a handsome cash dividend of its own). As the spectrum is parcelled up and sold to the highest bidder, each parcel comes with a little bit of social benefit attached. Think how well it works in the housing market. Developers know that a percentage of what they develop must go to social housing. It’s a price they are willing to pay as they can make a handsome profit with what’s left. So imagine telling BT that it can have a multiplex for a few hundred million, but it needs to hand over a few megahertz to a social broadcaster. Everyone’s a winner: consumer, citizen and the Exchequer. Just one way for that public service content to survive the digital big bang.
Andrew Bethell is the chief executive and creative director of Teachers TV