Direct broadcasting by satellite 

16 January 2017 tbs.pm/10048

From the BBC Annual Report and Handbook 1986

Satellite transmission has, over the years, come to play an increasing role in broadcasting. News and other actuality material is regularly exchanged by this means, and ‘live’ coverage of significant events around the world is beamed by satellite via large earth stations and thence, through the terrestrial transmitter system, relayed to viewers. The 1984 Olympics, for example, were bought live’ to British viewers from Los Angeles. In addition, new commercial programme services are now being offered in areas covered by cable networks. Such services are transmitted by low-powered communications satellites and can be adequately received by dishes two to three metres wide.

However, a new generation of high-powered satellites is now available, capable of beaming pictures direct into individual homes. Direct Broadcasting by Satellite (DBS) gives access to new frequencies in the radio spectrum and so provides room for more television, radio and data services, as well as allowing significant improvements in the quality of sound and vision signals. While DBS is likely, in the long term, to be one of the principal means of broadcasting, pioneering DBS is a high risk, high cost venture.

It involves placing a satellite at a height of 36,000 km above the equator in a geostationary orbit. Signals are beamed from a ground station to the satellite and relayed back to earth, direct to small dishes owned by individual viewers. Britain has, by international agreement, been given five national channels; the ‘footprint’ (the area over which the signal can be received) covers the whole of the UK and ‘spills over’ into other parts of Western Europe.

The BBC believes DBS has much broadcasting as well as technical potential. It is a means of delivering new television services to the entire nation, complementing the existing four channel provision with a choice of subscriber services; and, in the future, satellites may eventually become a cost-effective replacement for terrestrial transmitters. The BBC has therefore taken a leading role in investigating its potential for development in the UK. Until recently it was undertaking this alone, though in close consultation with Government departments, the Government’s preferred satellite supplier and the receiver manufacturing and rental industries. However, the BBC has taken the view that the cost of developing DBS should not fall on the licence payer. In France and Germany, DBS satellite services have been developed with Government backing. This has not been available in the UK and the BBC has, therefore, worked on the principle that DBS must be financed on a commercial basis.

The costs involved are large. Not only is there the satellite system itself; the receiving equipment represents a significant investment by the public and new programme channels will be expensive. The BBC concluded that the best chance of pioneering this new distribution technology lay in orderly development of the market so that new services could be securely established before opening satellite broadcasting to the benefits of competition.

With this in mind the BBC took the lead in working out a framework for a joint DBS venture with the commercial independent television companies and their regulatory body, the IBA. The machinery for such a joint venture came into being in the course of the year under review. In May 1984, the Home Secretary announced that the Government would like to see a national DBS service in which the BBC would have a 50 per cent share. The broad parameters were established in the 1984 Cable and Broadcasting Act.

The Act envisaged a Satellite Broadcasting Board, to act as a regulatory body and to approve the companies licensed to lease satellite channels. A shadow Board, consisting of three BBC Governors and three members of the IBA, was set up. The UK-DBS Consortium, consisting of the BBC, the independent television companies and five non-broadcasting commercial companies approved by the Home Secretary, was formed to investigate the possibilities for a national DBS service.

In December the Consortium reported to the Home Secretary, through the Satellite Broadcasting Board. It wished to pursue a plan offering three DBS services to the public, but it anticipated a number of difficulties which it asked Government’s help to resolve. It concluded that a viable business plan depended on the best possible price for the satellite system and this could only be established by going out to tender on the free market. The Consortium recommended a transmission standard, C-MAC in the 20:10 variation, which was endorsed by the Government. It suggested that the life of the Consortium would be more realistic if it were longer than the ten years envisaged and it expressed fears that the licensing of direct reception of services from low-powered satellites would undercut the market for DBS.

Shortly after the end of the year under review the Government announced the deregulation of reception from low-powered satellites either to SMATV systems (Satellite Master Antennae Television), that is to dishes feeding a number of premises through a simple cable hook-up, or direct to individual dishes. The Consortium concluded that this introduced a crucial uncertainty into projections of take-up of a competitive high powered system. In reaching a final decision, the Consortium considered studies by independent satellite consultants and merchant bankers which compared the prices quoted by Unisat, the Government’s preferred satellite supplier, with world prices and assessed the likely out-turn of the Consortium’s business plan on the basis of varying assumptions. The price quoted by Unisat was 70 per cent higher than a comparable proposal using an American satellite. Even assuming that quotation could be negotiated downwards, the pre-tax rate of return on a ten year franchise was likely to be considerably less than the cost of raising the investment involved. Members of the Consortium were unanimous that, on the terms set by Government and within the current broadcasting environment, DBS was not a commercial proposition.

While regretting the demise of a project in which the Corporation had invested much faith and effort over a number of years, the BBC remains convinced that, with its rich programme resources, it has a major role to play in developing additional services for the nation using the new technology when circumstances are favourable.