BBC & Project Canvas: Will the Digital Revolution Be Televised?

As you may remember, once there has been a Kangaroo that was destined rather not to have a fulfilled life.

By the end of February, we had to say goodbye to BBC‘s joint venture Project Kangaroo which involved ITV and Channel 4. The Competition Commission’s decision set an end to mutual plans.

One obvious alternative even entered the scene before and rose to fame right afterwards: Project Canvas. This time, the BBC was about to be joined by ITV (again) and ISP British Telecom. They envisioned an open video video-on-demand solution, open to any content provider and content source, including internet.

If you were interested in how Kangaroo would have done, you should have been excited to see Project Canvas develop.

Preparing the stage – in an awkward attempt.

Just as we witnessed the Kangaroo die, the BBC Trust launched public consultation on Project Canvas. The schedule that was set turned out to be quite tight – in particular to third parties who considered to take part in submitting statements claiming their respective point of view. On April 17, the closing date for submissions within the first phase of consultation was set.

The upcoming week will see the Trust’s first conclusions based on internal consultation and submissions – June 8 being the latest. Just about two weeks later, on June 22, second phase of consultation is about to end. The BBC Trust’s final decision on the project is set to be released by July 24.

Obviously, competitors and other potentially objecting parties were annoyed regarding the schedule they had been presented with.

Being not invited isn’t funny at all.

However, this one even represents only a minor issue. If you are familiar with the BBC’s proceedings in digital projects, you certainly are missing one essential element. Where is Ofcom?

Actually, if digital undertakings at the BBC are in the makings, a Public Value Test is staged. Regarding Canvas, the BBC Trust, an installment independent from BBC (at least it is to be independent) is considering issues of public value, value for money, interests of license fee payers, risks, compliance with law and policies, and market impact.

But then there’s Ofcom. Ofcom usually evaluates a planned service’s economic impact on the market. Now, there never has been any statement why Ofcom is missing in here – a fact that made Ofcom feel a bit uncomfortable – and other third parties too. In an open letter to the Trust, Peter Phillips from Ofcom says: ^{[link broken, 2016-03-10]}

“We recognise that the Trust has determined that Canvas is a non-service activity, and has decided not to adopt a full Public Value Test in assessing the application. As a consequence, we have no formal role to play in the Trust’s assessment.”

Phillips adds:

“[…] it might be helpful to highlight a few high-level issues that we believe the Trust will wish to consider in delivering its assessment of the proposals.”

What standards? A foggy approach.

So, why Canvas is supposed to be a “non-service” activity? Is it about the announcement that the platform is said to be one based upon open standards? (I intentionally avoid to call it a fact – too much of the undertaking’s concept is a bit blurry.)

Or is it about standards themselves? That is what upsets the electronics industry. UK’s Intellect Technology Association, representing Sony, Panasonic, Samsung, Toshiba and several others is afraid of the BBC setting up a set-top box standard on her own without considering them. That’s easy to understand, since the electronics industry has developed a whole phalanx of standards at their own at high cost – whilst none of their products (others than computers) successfully allows and integrates internet access like Canvas intends it. To them, it’s burned money in case of BBC’s success. Yet – imagine electronics industry finally would agree on a single standard on their own… discarded preliminary standards would result in a “loss” of investment as well.

Actually, the BBC didn’t do much to set things clear first. They had their chance at the 5th annual IPTV Word Forum in March. Richard Halton, Head of IPTV at BBC, said Canvas was intended to develop “simple standards that will enable the rapid adoption of internet connected television” in the UK ^{[link broken, 2016-03-10]}. Yet, “Canvas is not an attempt to create a new standard” he added. Huh? Quite confusing – is Canvas about standards, yes or no? Why should anyone develop a standard that’s not new but old?

Firing a broadside.

BSkyB, on the other hand, is objecting to Canvas rather straight forward. Their submission has been released on May 12 ^{[link broken, 2016-03-10]}, addressing the missing of Ofcom as a counterpart to BBC Trust within the Public Value Test. Of course, they also hint at potential market distortions.

Some comments over at The Guardian’s site point out that Sky has imposed a satellite monopoly on their own. So, they should not be allowed to cry foul? Well, thing is, the issue of market distortion does not relate to the monopoly as such (ok, that’s not a good one either). It’s about the BBC receiving money from license fees and using that to get an advantage in market. If the market distortion really emerges from the additional financial support, or if it’s more about the fact of introducing a new product – I’m sceptical about that.

If it’s the latter, than you even may not call it a market distortion. In this case, we are speaking of a potential product substitution that is eligible to change the market. Yet, commercial broadcasters consider this grey area a welcome opportunity to object to (PBS) competitors.

Helping hands. Rather unassertively.

Not much of a surprise, there is coming one supporter out of hiding: the ISBA, the national advertisers body. Since iPlayer has no options to feature advertising because of the BBC being a Public Broadcasting Service, the ISBA welcomes Canvas as a “commercial counterbalance”. Of course, if the open platform succeeds, it most probably will see a tremendous reach. Though, it didn’t take for long, and even ISBA joint the chorus demanding for involvement of Ofcom.

Pros, cons, whys.

Admittedly, the concept is sketchy, that’s true. But who’s right about his concerns? Does the BBC hold back information which upon launching the project enable the BBC (and partners ITV and BT) to constrain current competitors and future third party content providers? Or is it more like commercial opponents squeezing the Canvas draft for anything that might constrain and stop Canvas now – maybe just to get more time to find a solution for their own?

However, the BBC’s project scores in one point. These days, in particular in turmoil of one of the most serious crisis in economics, Europe sees the UK as one of their weakest countries. Nevertheless, the UK always has been proud of its content industry’s strength. So the idea of implementing an open platform instead of cannibalising each other looks much more promising.

After all, if Canvas results in the license fee payer getting a platform for TV, internet, on-demand content, and content from all the different providers – PBS, commercial programmes, even YouTube et al. – without changing their hardware apart from adding a set-top box… I guess that definitely would be perfect.

Even more so, if copyright and licensing law would allow for international, or at least European content. Ok, now this one is to be called a vision indeed.

Invitation granted upon fates will.

But let’s not forget about Ofcom… as Peter Phillips notes in his open letter to the Trust ^{[link broken, 2016-03-10]}:

“[…] we recognise that there may be a future role for the OFT and/or Ofcom to assess the arrangement under relevant merger or competition law.”

It represents an obvious warning that Project Canvas might share fate with Project Kangaroo – if wrong decisions are made. It may be more than wise for the Trust to release an intermediate report this week announcing the involvement of Ofcom in an extended Public Value Test.