BBC pays $1.2 bil for switch to digital TV

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LONDON -- The bill for helping elderly and disabled householders switch off their analog sets and convert to digital television will total £600 million ($1.2 billion) and be paid for by the BBC, U.K. Culture Secretary Tessa Jowell said Tuesday.

The pubcaster will use license fee cash to pay for the program.

The culture secretary's announcement came as U.K. media regulator Ofcom on Tuesday outlined the timetable for selling off the spectrum that will be freed up when the analog system is switched off in 2012.

The auction is set for 2008 and will allow the winners to bid for national television or telecoms services.

Ofcom said that the overall benefit to the U.K economy of re-using the spectrum will be between £5 billion ($9.8 billion) and £10 billion ($19.7 billion) over a 20-year period.

Mobile phone operators and broadcasters are expected to bid to use the new frequencies to launch such services as mobile television, local television, high-definition television and next-generation mobile video services.

The auction is expected to raise considerably less than the £22 billion banked by the Treasury when it auction off so-called "third generation" mobile phone licenses at the height of the dotcom boom.

The 2001 auctions left many winners struggling to recoup the cost of their licenses.

Announcing the plan to assist older and more vulnerable members of society in the digital switchover to the House of Commons, Jowell said the BBC will subsidize the cost of converting one television per household for persons over 75 years of age or disabled.

The switchover process will be free to those who receive income-related benefits and the cost will be capped at £40 ($78.70) for those over 75 not on any sort of income support.

The U.K. expects to complete the switchover process in 2012, but almost three out of four of the U.K.'s 25 million households already have some form of digital television.

Jowell told the House of Commons that the support program will ensure that "no-one was left behind" in the switch to digital television.

"The public has told us that the BBC should be at the forefront of digital broadcasting, helping people adapt to new technologies, that's why we set it the task of building a digital Britain," she said. "This money will enable it to deliver this. It reflects the BBC's duty to ensure its services are received by as many people in the U.K. as possible and the BBC itself will benefit from switchover, which will end the costly need to broadcast both analog and digital signals."

The cash will be allocated to the BBC as part of its as-yet-unresolved license fee settlement, but will be safeguarded so that it will only be used for the purpose of assisting in the switchover.
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