Methodology for Market Impact Assessments of BBC services

23 July 2010

Ofcom will employ the following methodology in carrying out all of its Market Impact Assessments. This methodology has been agreed by Ofcom and the Trust, in accordance with section 30 of the BBC Agreement. It is likely that the methodology document will be updated periodically, as Ofcom's experience in undertaking MIAs grows.

Purpose of MIAs, how they fit into PVT

The new BBC Royal Charter and Agreement, which came into effect on 1 January 2007, provided for the establishment of a new Public Value Test (PVT) regime. The PVT must be applied before a decision can be taken to make any significant change to the BBC’s UK public services, which can include the introduction of a new service or the discontinuation of an existing one.

Under the new regime, the decision on whether to authorise such a change will be made by the BBC Trust (the Trust), following the application of a PVT. In reaching a decision on a PVT, the Trust must take into account the findings of two separate reviews:

  • Public Value Assessment ( PVA), carried out by the Trust Unit, which assesses the likely value of the service to licence fee payers, particularly in terms of its contribution to the BBC’s public purposes; and
  • Market Impact Assessment (MIA), carried out by Ofcom, which assesses the effect of the proposed service on other services in the market. It considers both the direct impact on consumers and producers of other services, for example in terms of price and choice, and the likely impact on competition and market development, which will affect consumer and citizen interests in the longer term.

This document sets out the approach which Ofcom intends to take in carrying out MIAs. It represents our current view of best practice, and is likely to be updated as our experience in conducting MIAs grows.

The guidelines set out below are intended to inform stakeholders about the approach Ofcom will take to MIAs. We may depart from this approach in particular cases but if we do so we will explain why.

Full Report 

Methodology forMarket Impact Assessments of BBC services (PDF, 84.8 KB)