We are writing to advise you of changes affecting digital satellite customers who do not subscribe to sky digital and to set out the steps to be taken to ensure that customers are made aware of the situation.

As the BBC's channels are no longer encrypted, the BBC is no longer contributing to the cost of supplying these viewing cards. The other broadcasters of encrypted free-to-air channels (ITV, Channel 4 and Five) do not wish to fund viewing cards to enable the viewing of their channels to consumers who do not wish to subscribe to pay-TV. Thereefore viewing cards are no longer available to non-pay-TV.

Existing as well as new, digital satellite viewers will be affected because Sky is currently in the process of a viewing card swap-out, which is necessary to ensure the security of the system.

1. BREACH OF FREE MINIDISH AND DIGIBOX TERMS:

As you know, it is a standard term of the free minidish and digibox offer and the interactive discount contract that a viewing card must be kept in the digibox for at least 12 months.

If a customer is not subscribing to a pay-Tv service, they will not be able to obtain a viewing card and this requirement will be waived. However, if in the next 12 months they obtain a viewing card for their digibox or it becomes possible to obtain one without subscribing to a pay-TV service, the requirement to keep the viewing card in the box for the remainder of the 12 month period will apply from that point.

All new customers and existing customers querying this point should be informed of this.

2. FEWER FREE TO AIR CHANNELS.

Encrypted channels cannot be accessed through a set top box without a viewing card This currently affects reception of ITV1, Channel a and Five. New customers not wishing to subscribe to Sky digital must be advised that these channels are not currently accessible to non-pay TV subscribers, although they will still be able to access these channels if they have an analogue aerial fitted.

We are concerned that consumers may choose to subscibe to Sky digital simply to obtain a viewing card thinking they can cancel their subscription once they have received the card. However if the customers breaks the 12 month minimum term of the Sky digital subscription they will be liable to pay the difference between the price they paid for standard installation and £120. Sky has also the right to charge for the remainder of the minimum term based on(the cheapest package price). It is therefor imperative at this time to make clear that the minimum period for subscribing to Sky digital is 12 months.