Capacity Crisis Looms Over ONdigital

BROADCAST EXCLUSIVE - ONdigital is under pressure to increase its capacity for
channels as the future of its pay-per-view joint-venture film service,
ONrequest, comes under scrutiny, writes Simon Ellery.

ONdigital - jointly owned by Carlton Communications and Granada Media - has yet
to confirm whether a deal with Channel 5, whereby On Digital leases the
multiplex space it needs to operate ONrequest, will continue beyond next year.

ONrequest, a joint-venture launched last spring between ONdigital and multiplex
operator SDN, operates on one of the digital multiplexes awarded by the
Independent Television Commission in 1998. The multiplex was initially awarded
to SDN and C5. ONrequest leases half of the space it takes on the multiplex from
C5 through SDN. The other half of ONrequest's capacity is provided by SDN
directly.

However, C5 is thought to be considering taking back the spectrum it rents to
ONrequest to launch its own digital services, including a rival to BSkyB
interactive service Open... Back in 1998, C5 agreed to a five-year deal to lease
its space to ONdigital through SDN. A C5 spokesman said: 'It is an ongoing
contract but we are constantly reviewing the way the capacity is used.'

But SDN managing director Emyr Byron Hughes said a clause in the contract would
allow C5 to claw back the space early next year. Hughes said: 'ONrequest may
lose some capacity but not enough for it to be a problem.'

ONdigital is known to have problems with limited capacity available to broadcast
existing services, such as the ITN News Channel, which is supposed to air 24
hours a day but which only operates between 05.30 and 09.00 on ONdigital. The
digital terrestrial broadcaster is also considering launching new services such
as a sports channel.

ONdigital chief executive Stuart Prebble was unavailable for comment but a
spokesman said he did not anticipate problems and insisted 'we are providing a
good service'.

However, a submission to the government before last year's white paper drew
attention to the spectrum problem. The ITV submission said: 'ONdigital's
multiplexes need improved coverage... there is insufficient bit rate to provide
attractive text and interactive services.'

Hughes said the multiplex could be 're-jigged' to create more space as
compression technologies improve.