Communal Aerial Upgrade Consultation - Norwich City Council

Report for Resolution
Report to Executive
19 July 2006
Item
Report of Strategic Director - Neighbourhoods and Community
Subject Communal TV Aerial Upgrade Consultation
Purpose
15
To inform Executive of the options available for the delivery of digital television
signals to 9,900 properties (tenants and leaseholders) that currently receive
analogue television transmissions when the analogue signal is switched off in 2011
and to approve a preferred option prior to consulting tenants and leaseholders on
the options available.
Recommendations
1. Members are asked to approve the options to be put forward for
consultation with tenants and leaseholders with a recommendation that the
existing analogue communal TV aerial systems are replaced, on a
programmed basis, with a new digital IRS reception system that is leased
on a 20 year full maintenance and upgrade lease; and
2. To delegate authority to the Strategic Director Neighbourhoods and
Community in consultation with the portfolio holder to replace the existing
analogue system taking account of tenants and leaseholders preferences.
Financial Consequences
Depending on the option chosen there will be charge implications for tenants and
leaseholders. In addition to this to produce the necessary specialist contract
documentation and manage the project will result in a cost to the Council, which
will be met from the Housing Revenue Account.
Corporate Objective/Service Plan Priority
The report helps to achieve the corporate objective to strive for sufficient, goodquality,
affordable housing, providing choice and accessibility and the service plan
priority to ensure a strategy is agreed in order to ensure a digital TV reception is
provided for 9,900 homes when the analogue signal is switched off in 2011
Contact Officers
Chris Rayner, Housing Property Manager
Paul Sutton, Business Planning Manager
01603 213208
01603 212785

Background Documents
None

Report
Context
1. The Council is responsible for providing a communal TV aerial system to 9,900
properties, or 53% of the housing stock, (mainly flats but also a number of
houses) including both tenants and leaseholders. These systems were
designed to carry five television channels (BBC1, BBC2, ITV, Channel 4 and
Channel 5) transmitted in the traditional, analogue format. The distribution
systems are not capable of transmitting digital channels from the terrestrial
(Freeview) and the satellite (Sky and others) broadcasters. This means that
from 2011 when the analogue television signals are switched off in the Anglia
region, in favour of digital transmission, the existing communal television aerials
will cease to deliver a television signal.
2. Due to the popularity of digital television in the UK, over 63% of UK homes now
have digital television of one form or another, this has caused the gradual
proliferation of aerials and satellite dishes attached to houses and flat blocks
within Norwich City. Permission from Norwich City Council and the Planning
Directorate should be obtained before any aerial or dish is erected, but many
installations are carried out without these permissions.
3. Because most new televisions have integral digital capability and Freeview settop
boxes can be bought for as little as £30, there are an increasing number of
residents and leaseholders requesting the capability of receiving digital
broadcasts, and the level of complaints received by the Council is increasing.
4. The implication of digital switchover is that all landlords must decide on a
planned response to the switch-off of analogue broadcasting in the UK. There
is no suggestion from Government that the landlord costs will be met from any
additional funding – although the DCMS have made reference to financial and
practical help for the elderly (over 75) and other vulnerable groups in society –
funded from the BBC license fee. An announcement will be made in due course
on how this support will operate but it is unlikely that social landlords will
qualify.
5. Some 20% of homes in the UK receive television signals though communal
aerials – so it affects flatted housing stock across the whole of the UK. The
DCMS say that 95% of Local Authorities and 74% of RSLs own or manage
properties with communal TV systems. In a survey carried out by the DCMS, in
February 2005, it was found that 37% of LAs and 50% of RSLs have made no
start to the improvement of their aerial systems. This all means that as the
switchover timetable approaches it will become increasingly difficult for
landlords to find aerial contractors with a good track record of installing digital
television distribution systems. There will be an industry skills shortage. Given
this and customer demand there is therefore the need to plan now for the
distribution of digital television signals in our housing stockwell ahead of the
“switch-off”.
6. Appendix A gives the background to the digital television and the platforms
currently available.

System Options
7. Following discussions with several specialist companies including Sky Homes
and Stanley Blick there are two system options available to the Council; these
being an Integrated Reception System (IRS) and an upgrading of the existing
system (called a ‘head end’ upgrade). Both systems will deliver a digital signal
but only the IRS system includes all ‘free to air’ channels (replacing the need
for a set top box or integrated television) but tenants and leaseholders will need
to purchase their own satellite receiver in order to receive subscription channels
through the IRS system. This would allow all current resident owned aerials and
satellite dishes to be removed. The ‘head end’ upgrade will only deliver the 5
terrestrial channels and only allow the removal of resident’s own aerials.
8. One other option would be to decommission all equipment and no longer offer
this service. The Council has no statutory duty to provide this service. However
this a problematic option because planning restrictions limit each block to one
dish. It is also doubtful if this would be acceptable to residents and for the
purposes of this report this option has not been progressed.
Integrated Reception System (IRS)
9. With an Integrated Reception System, a satellite dish, UHF aerial and radio
antenna are connected by new cables to homes which collects the broadcast
signals from both terrestrial and satellite transmitters, as well as FM and DAB
radio. All available signals are then distributed to a new four-way wall outlet
plate in each flat.
Advantages -
� Provides greater choice for residents because they can choose to only
receive free to view channels or subscribe to any subscription package and
also Sky+ (if this wiring option is adopted).
� Negates the need for individual satellite dishes or aerials, which can be
removed.
� Provides new wiring systems, which we have been advised, are “future
proof”.
� Access to non-English language channels possible thereby giving residents
additional choice and addressing equality and diversity issues.
� As part of the future proofing it is possible to have video door entry systems
linked to the system to allow residents to view who they allow to access the
building, although clearly this would need investment in the necessary video
equipment in communal areas as well as each property, which is currently
not in place.
Disadvantages-
� High installation costs if system purchased not leased ( £175 - £225 per
home)
� More difficult installation and access required to each home.
� More difficult to procure specialist contractors.

� More supervision of works required due to the specialist nature.
Upgrading of Existing System
10. The simplest and cheapest way to upgrade the communal systems to receive
digital broadcasts is to change the aerials and electronics to receive digital
signals, called a “head end” upgrade. NTL have offered to upgrade all of the
existing systems to receive digital broadcasts on a routine basis or as they
need repair within the existing contract. This will mean that some residents may
not be able to receive digital broadcasts until 2010, which is close to the
switchover deadline and would mean an increasing number of enquiries and
complaints, which may be unacceptable. This upgrade involves leaving the old
coaxial cables and old outlet plates in position, which will need
upgrading/replacing at some stage in the future.
Advantages –
� lower costs (about £50 per home) although a contingency budget would be
required for any new wiring found necessary, which is highly likely.
� no access required to individual properties.
� easier and quicker installation process.
Disadvantages –
� Electrical interference on digital channels and re-setting of set top boxes.
� No non-English channels available - fails to recognise diversity.
� Limits choice to “Freeview” only – no access to satellite services.
� Continued proliferation of satellite dishes – disputes & damage.
� Regarded as a temporary solution – rewiring necessary at some point in the
near future.
� Not “future proof”.
Funding Options
Current Costs
11. The current analogue system, owned and maintained by NTL, costs £164,000
per year (Approximately £17 per property per year) this covers hire of
equipment and maintenance. £17,000 of the cost is recovered from
leaseholders connected to the scheme. 436 freeholders are connected to the
system having made a one off payment of £15.00 to be connected for the
duration of the current NTL contract. The remaining £147,000 is pooled across
the Housing Revenue Account (HRA) which means it is funded from the rents
of all tenants regardless of whether they are connected to a communal aerial.

12. In line with the Government policy of rent restructuring it is proposed that any
new contract and costs result in a specific service charge to dwellings which
are connected to a communal system and that the cost is no longer pooled
across all tenants. This charge would be eligible for housing benefit.
Options 1 Integrated Reception System (IRS) Capital Budget Option (outright
purchase)
13. Based on an estimated price of £194 per home outright purchase cost of an
IRS system would be £1,922,500 (note this cost includes contractors
overheads, project management costs etc). An annual maintenance agreement
would cost approx £118,000. The same system but including Sky+ would be
£2,170,000 (again this cost includes contractors overheads, project
management costs etc), with the annual maintenance agreement costing
£138,600. The works could be phased over more than two years, giving an
annual budget of approximately £1 million per annum depending on which
option is adopted. This would have to be found from the existing Housing
Investment Capital budget, at the expense of an existing programme, as no
further funds are available.
14. Tenants would not be liable for installation costs but would face a specific
weekly service charge for maintenance of between £0.23 and £0.27 depending
on the option chosen. Leaseholders and freeholders would be liable for the one
off installation cost and an annual maintenance fee.
Option 2 Head End Upgrade
15. Head End upgrades are cheaper and at £50 per home would cost £495,000, or
close to £250,000 per year over two years. This is a more affordable option. A
contingency budget of £50,000 a year would also be required for any additional
wiring upgrades.
16. The option offered by NTL to upgrade the head end on a rolling programme
would cost nothing, but would take up to 5 years to complete as upgrades will
only take place as systems fail. There would be an undoubted increase in
charges for tenants and leaseholders with ntl currently pressing for an annual
increase of almost 30% on current charges.

17. Table 1 - Outright purchase potential charges
Option Total cost Cost per
dwelling
Maintenance
Annual
Cost per
home
Sky £1,922,500 £194 £12 £0.23
Sky + £2,170,000 £220 £14 £0.27
Head end
upgrade
ntl upgrade Estimated
£211,560
£ 495,000 £50 0 0
Option 3 Leasing an Integrated Reception System.
£21.00 £0.41
Maintenance
Weekly cost
per home
18. The alternative to using capital to procure the works is through a lease
agreement where the cost of the upgrade work is paid for by the service
provider who then leases the service back to the Council. With most major
installers strategic partnerships can be entered into over a period of 10 years or
longer. In this way the capital cost is met by the service provider and the IRS
service is leased.
19. The costs and charges of leasing are illustrated below. This charge would be
recovered from leaseholders in their service charge and set up as a weekly
service charge for tenants. As previously noted this weekly service charge
would be covered by housing benefit, which will mean that in adopting this
option we will not be increasing the financial burden on those tenants on
benefit. Companies are reluctant to offer a lease option for a head end
upgrade that also includes maintenance of the existing wiring and fittings.
20. Table 2-Leasing option potential charges
Option Total cost Annual
Cost per
home
Weekly
Cost per
home
Sky 10 years £460,000 £47.00 £0.90
Sky 20 years £305,000 £31.00 £0.60
Sky + 10 years £520,800 £53.00 £1.00
Sky +20 years £347,200 £35.00 £0.68
21. Another financial consideration is whatever system is adopted, unless an
extension of the existing contract is negotiated, the Council will have to buy the
existing system back from NTL. A price has not been given, but is unlikely to
exceed £20,000.

Contract Procurement
22. Due to the nature of this work specialist skills and knowledge are required for
the procurement process and it will be necessary to appoint a consultant to
prepare the tender documentation. The availability of such specialists is limited
(particularly in view of the short timescale to the switchover date and the
volume of work to be carried out nationally) and consideration is being given,
and legal advice is being sought, to determine the most efficient approach to
appointing such a specialist.
23. Project management of the programme is another specialist area however the
costs for this work are included in the funding options and are approximately
£100,000 over the term of the contract.
Timescales
24. The intention is to use the remainder of this financial year to procure the
contract in order that we have a contractor ready to start on site after April
2007. The detailed programme of work would need to be agreed with the
successful contractor but in terms of the overall high level programme
anticipated timescales for each option are:
� Full IRS system either outright capital purchase or leased option is two to
three years.
� Head end upgrade of existing system is two years.
� NTL head end upgrade would be carried out over the next five years but
exact timescales would be entirely dependant on the reliability of each
system over that period (as upgrading would only take place if systems
failed or required considerable maintenance) and would not allow us to
notify residents of the intended programme of upgrade work in advance.
Other Considerations
25. As mentioned previously there are a limited number of approved contractors
able to carry out this specialist work and with the switchover date rapidly
approaching their services will be in demand and prices will rise, so we need to
ensure we use the remainder of this year to procure the work in order to make
a start on site next year.
Consultation
26. It is proposed that all tenants and leaseholders, in affected dwellings, be
informed that the current analogue communal TV aerial systems system needs
to be replaced and the Councils preferred option is a new digital IRS reception
system as this will give tenants and leaseholders access to more channels and
reduce future costs. It is intended to recommend that it is leased on a 20 year
full maintenance and upgrade lease. The consultation document will explain
fully why the change is necessary and what the potential costs are. The
consultation will invite comments from tenants and leaseholders and an

indication on which option they would prefer. The Authority will need to
demonstrate to all tenants and leaseholders that the proposed solution is value
for money and that any cost will be reasonably incurred. Because the cost to
individual leaseholders will be less that £100 per year a full section 20
consultation will not be required.
Conclusion
27. Whilst the upgrade of the existing system by NTL is the cheapest option it is not
considered best value for money as further upgrade work of cabling etc will be
required in the near future and this system will not be ‘future proof’ in terms of
technological improvements and changes. By far the best value for money
solution in the long term will be the IRS system, and this is the system that the
vast majority of other social landlords are adopting, but the ‘up-front’ capital
cost of such a system effectively makes it unaffordable for the Council given the
need to spend capital resources on meeting Decent Homes targets and other
tenant aspirations. However, the same system can be leased with a full
maintenance system at a cost comparable to the existing analogue system with
the added benefit of providing residents with a choice of digital services,
helping address the e-government agenda and equality and diversity issues
that may exist. A further consideration is the level of choice provided to
residents and whether, for the marginal additional cost (£5 per property per
year or 9 pence per property per week), we provide a system that allows the
resident to choose Sky+. An additional benefit is that future budget setting and
provision is known and so gives added certainty to future costs.

APPENDIX A
Background to digital television
1. Digital television was launched on 1 October 1998 and has enabled
broadcasters to vastly increase the choice of programmes available to viewers
from the Terrestrial (through an aerial), Satellite (through a dish), Cable (though
underground cables) or Broadband (through DSL telephone lines) suppliers.
For the Terrestrial and Satellite suppliers this expanding choice includes new,
free-to-view and subscription services – far beyond the familiar BBC, ITV,
Channel 4 / S4C and Five terrestrial services. Services from Cable and
Broadband all require subscription payments. Interactive services within digital
broadcasting are also growing; playing an increasingly important role in the egovernment
agenda.
2. The Secretary of State confirmed in September 2005 the switchover to digital
broadcasts will be between 2008 and 2012 ensuring universal access to highquality,
free-to-view and subscription digital TV. For the Anglia region, the
switchover will take place in 2011. In order to receive digital television services
from one of the suppliers viewers must be equipped with a digital receiver,
commonly known as a “set top” box. These are available from the High Street
retailers. Alternatively, you can purchase a digital-ready television from the
High Street, these are known as Integrated Digital Television sets (iDTV) and
have the digital receiver integrated into the television itself. In all cases, ofcourse,
the digital receiver must be able to receive the required digital signals.
In blocks of flats this means either having your own aerial or dish or being able
to plug the box into a communal aerial that delivers all of the required digital
signals.
Available Television Platforms
3. There are three different types (or “platforms”) of digital television available in
Norwich to choose from: satellite (Sky), terrestrial (freeview) or cable. With
terrestrial residents can buy a set top box (currently £35 to £150 depending on
quality), which connects between the television set and the aerial source.
Connection is usually undertaken by the householder themselves. The
Freeview box delivers 30 television channels and a growing number of digital
radio stations. There is no monthly subscription for Freeview – although there is
“Top-Up TV” which tops up the service with eleven subscription channels.
With satellite residents can access free-to-view channels and a range of
subscription channels. The “Freesat” service from Sky offers 120 digital TV
channels and 80 digital radio channels. Alternatively, residents can subscribe to
Sky and build their own digital television package, from six channel mixes, up to
500+ channels. Residents can opt for the Sky+ service, which includes a
personal video recorder recording directly to the Sky+ box at the touch of a
button ,no tapes and no timers as well as pausing live tv action and returning
later and instantly rewinding.
Another satellite free-to-view service is being planned for launch early in 2006.
The BBC and ITV are currently exploring a new satellite service, which will
provide free-to-view services delivered from the Astra satellite.

Cable (NTL / TeleWest) provides up to 160 channels on subscription packages. It
does not currently offer free channels but plans are being made to do so. Cable
access is not currently provided to all Council housing in Norwich.