The new BBC Royal Charter and Agreement, which came into effect on 1 January 2007, included the setting up of a new Public Value Test (PVT) regime to assess whether the BBC's proposals to launch new services in future – or to amend existing services – would be in the wider public interest.
The decision on whether to authorise the proposed services sits with the BBC Trust. In reaching its conclusions, the Trust must take into account the findings of two separate research projects. The first – the Public Value Assessment (PVA) – is commissioned by the Trust directly and seeks to assess the broader public value of the proposed service to UK citizens and consumers. The second – conducted by Ofcom – is a Market Impact Assessment (MIA).
The purpose of an Ofcom MIA is to assess the likely impact of the proposed services on markets in which these would be provided as well as on other related markets. In carrying out an MIA, we are particularly concerned with assessing the extent to which the BBC’s proposed services might deter innovation and investment by relevant alternative providers in the commercial sector. Were those providers to be deterred from seeking to offer competing services this would ultimately have the effect of reducing choice for listeners and viewers, to the detriment of the public interest as a whole. Although the MIA on the BBC's on-demand services started before the new PVT regime came into force, it has been conducted in accordance with the new provisions.
In August 2006, BBC management applied to the BBC Governors for permission to introduce the following services:
All of the proposed services, except for catch-up TV over cable, would be accessed from the internet using the proposed new BBC iPlayer software. This software is described in Section 2 and Annex 2.
The BBC Governors announced in August 2006 that they were initiating a PVT to evaluate the BBC's proposals for the new on-demand services. On September 15 2006 the Joint Steering Group (JSG) set up by Ofcom and the BBC Governors agreed the terms of reference for the Ofcom MIA. The original 3-month timetable for the MIA would have led to completion in December 2006. We subsequently agreed with the BBC Trust to extend this by five weeks to give stakeholders more time to prepare written submissions following the publication of additional information on the BBC proposals.