The BBC Trust has given the provisional go-ahead to Project Canvas, a video-on-demand joint venture that offers free-to-air broadcasts and internet content on -television.
The governing body of the BBC said it was setting conditions after reviewing more than 800 consultation responses from industry and individual stakeholders. The likely public value of the proposal, it said, justified any potential damaging effect on the market.
The venture between the BBC, ITV, BT Group, Five, Channel 4 and Carphone Warehouse, will see set-top boxes made available to access on-demand television services such as the BBC’s iPlayer and ITVPlayer.
The set-top boxes are expected to cost about £200 and could be on sale next year. Users will have access to websites such as Facebook, YouTube and Flickr via their televisions. Electronic mail could be used if keyboards were added.
Ian Maude, head of internet at Enders Analysis, said Canvas would have little effect on the television market until boxes with its software cost less than £50.
“Initial take-up will depend on how much BT, Carphone Warehouse and other service providers are willing to subsidise Canvas set-top boxes,” he said.
Trust approval did not mean Canvas would necessarily escape further scrutiny from the Office of Fair Trading, Mr Maude said.
The project, designed to strengthen free-to-air broadcasters, has come under fire from pay TV groups such as BSkyB, which says the BBC’s involvement raises potential state aid issues.
Graham McWilliam, director of corporate affairs for BSkyB, said: “There is no need for public money to be spent on replicating what’s set to be delivered through commercial investment.
“Consumers will not benefit if the BBC’s role in Canvas prevents other innovative services