Market Assessment of the BBC's Digital Curriculum Proposition
16 July 2002
By Emily Bulman with former NERA Director John Dodgson
This report was commissioned by the Digital Learning Alliance to review the report that PricewaterhouseCoopers (PwC) produced for the BBC, to provide a market assessment of the BBC's proposals to launch a "Digital Curriculum" service. The proposed Digital Curriculum service, an online educational software package, would be universally available and free at the point of use. The BBC proposes to fund the program from licence fees, with some £150 million over five years proposed to fund the service. PwC was asked to prepare a market assessment of the BBC's proposals in line with Office of Fair Trading Guidelines on preparation of Regulatory Impact Assessments to identify and assess potential competition concerns or benefits from new proposals.
In this report, Mr. Dodgson and Ms. Bulman discuss their two primary concerns about PwC's review of the BBC's plan. Their first concern is that the PwC report does not take into account the main impact that the BBC's proposals will have on the relevant market (which the authors take to be the market for educational software and online content in UK schools). Namely, by providing services free, the BBC will have a serious impact on the range of large and small firms supplying this market, making it extremely difficult for them to compete.
The authors' second major concern is that the PwC report does not pay nearly enough attention to the dynamic impact of the provision of a free service on the way that the market will develop, in particular in regards to investment incentives for firms in the market, and in regards to the provision of choice and diversity available for schools, teachers and students.
