Grade: Free spectrum key to HD future

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LONDON -- ITV executive chairman Michael Grade on Wednesday warned that consumers who have invested "millions of pounds" in high-definition TV sets will be "bitterly disappointed" unless the government released free high-definition TV spectrum allowing the public service networks here to launch free-to-air HD channels.

To date, HD services are only available on pay television platforms such as BSkyB, which has taken a lead in the HD space and found HD to be a significant driver of consumer demand.

Speaking at a Royal Television Society seminar on the HDTV issue Wednesday morning, Grade said HDTV will become a "digital divide" created by "unequal access to the benefits of new technology," unless Culture Secretary Tessa Jowell and other government ministers take immediate action to release digital terrestrial spectrum to the BBC, ITV, Channel 4 and Five.

Grade said that government plans to auction off spectrum to the highest bidder will put the price out of reach for commercial broadcasters.

"There is no obvious significant incremental revenue opportunity from simulcasting ITV1 in HD and no evidence from the U.S. or Canada that advertisers are prepared to pay more for HD," he told the RTS seminar.

"Moreover, we would be competing in an auction with, amongst others, pay TV and mobile providers who could pass any spectrum bid directly on to customers. And remember, the cost of spectrum is in addition to the costs of simply transmitting an HD channel, which are likely to be in the tens of millions. Make no mistake, the world is moving to high-definition technology, not simply for television but for many devices which use TV screens."

Grade warned that the U.K. as a whole will lose its cutting edge role in television if HD spectrum is not "gifted" to the major broadcasters in the same way that digital terrestrial frequencies were in the late '90s.

"It seems very clear to me that, if we are to maintain our leading position in television worldwide, our industry urgently needs a clear domestic imperative to justify a significant investment in HD production across most genres of programming," he said. "I don't think I am overstating it to suggest that the alternative is sub-optimal investment in HD production and a significantly weakened place for the U.K. in the global market."

Last year, nearly 2.4 million HDTVs were sold in the U.K., a five-fold increase on 2005. Independent market research from GFK predicts that, by the end of 2010, 80% of households will have a high-definition television set.

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