In one of two references to New Zealand in his new book* about the worldwide transition to digital television, Michael Starks warns against simply copying the UK model.

Too late. We have Freeview, a dinky version of the British free-to-air digital television platform and the child of a politically incestuous union between Helen Clark's ministers and their state-owned broadcasters.

Although the politicians now deny parentage, always careful to describe the transition from analogue to digital transmission as being "industry-led," they have been nevertheless quick to claim credit for delivering Freeview as a free-to-air competitor for Sky's subscriber version.

Starks, who led the BBC's initial feasibility study of digital television and managed the British government's Digital TV Project, is an authority on the subject.

He points to a couple of fundamental truths found in all markets. The first is that the decision to make the transition is political; the second is that its ultimate success rides on persuading consumers to pay for a set-top box to receive channels they have been getting for free.

Among 11 features of the transition found in varying measure in all markets, Starks lists market size, the strength of satellite and/or cable pay TV, and the role of public service or state television and of public funding.

Market size is the most obvious and yet most frequently overlooked difference when New Zealand's media financing, distribution and consumption patterns are compared with their counterparts in the UK, which has 60.6 million people.

With niche markets many times larger than our entire population of four million, Britain's media-rich culture is underwritten by a broadcasting licence fee of $370 per household that this year for the first time lifted the BBC's annual revenue over $8 billion.

As well as giving the BBC the ability to dedicate $4.2 billion to digital conversion over the next five years, the fee pays for the sort of commercial-free broadcasting found only on radio in New Zealand.

A commercial-free television channel in this country would have provided precisely the incentive that consumers needed to make the switch. Faced with the loss of a non-commercial channel with locally made programmes and news unavailable anywhere else, consumers would gladly pay to update their aerials and receivers.

TVNZ's addition of two largely government-funded channels to the Freeview platform is a belated acceptance of demand for non-commercial broadcasting as an alternative in modern media markets.

But it is also an acknowledgment of a market reality in which digital channels mean more fragmentation, eroding the mass audiences on which free-to-air commercial channels depend for advertising revenue. That is why TV3's owners show no enthusiasm for putting new channels on Freeview.

But the transition to digital television will eventually return non-commercial television to the mainstream prime time position it last occupied 20 years ago. Within a year or two, New Zealand will have developed an indigenous public television channel, like SBS in Australia and PBS in the US.

Public TV will develop as the technology and the market combine to copy not the British but the Italian model. Italy has about 60 regional channels, which digital satellite transmission makes possible in New Zealand.

Digital satellite television was introduced here by Sky in 1998, a fact TVNZ refused to acknowledge for at least six years. From the early 1990s, when TVNZ first began thinking about digital television, its strategy was to make the transition in competition with Sky.

TVNZ's first attempts to go digital were based on a pay-TV business case, and although they were scotched by the first of Helen Clark's Labour administrations, the desire to compete against Sky persisted and flowed into the development of Freeview as a separate platform requiring its own set-top box receiver.

Technically, though, there is nothing to prevent Freeview's digital channels from coming through Sky's decoder. Providing the two electronic programme guides are compatible, Freeview could soon be getting a free ride into the 660,000 homes of Sky subscribers.

Although that would deliver TVNZ's ambition of "inspiring on every screen," it ruins Freeview's strategy of broadcasting from a separate and competing platform.

Effectively a return to the earlier and much more sensible "open box" approach, the availability of Freeview's channels on Sky would bring regional channels within the touch of a button in 44% of the nation's homes.

Southland's regional channel, rebranded as Cue, is already on Sky. It would be joined by Triangle Stratos representing Auckland and Wellington if Freeview went on Sky.

Add a few more local channels and some public funding for regional newsrooms and, hey presto, you're back to the future where it all began.

* Switching to Digital Television: UK Public Policy and the Market, by Michael Starks, Intellect Books, $90 (through Addenda Publishing, Auckland)