Digital Futures: Planning for Digital Television and New Uses
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1. Purpose
This discussion document outlines the issues relating to achieving a fully digital television broadcasting environment and the allocation of the digital dividend spectrum resulting from the upcoming Digital Switch-Over (DSO) process. Submissions on this paper have now closed.
The first four sections of this document cover process issues, background information and overall objectives. The next two sections contain the substantive issues:
Section 5 covers matters relating to spectrum planning for digital television and allocation of the “digital dividend” which are the responsibility of the Ministry of Economic Development; Section 6 covers matters relating to regional television services which are the responsibility of the Ministry for Culture and Heritage;
2. Scope
This paper discusses the issues, and potential options for changes to radio frequency allocations following the switch-over to fully digital television services. The date for the Digital Switch-Over (DSO) in New Zealand is not yet finalised but government’s expectation is that it will occur by 2015 at the latest.
The “digital dividend” (in spectrum terms) is the spectrum that is freed up through the implementation of digital television broadcasting using a technically efficient band plan, and ceasing all analogue television broadcasting. The frequency planning parameters for digital technology and greater efficiency of individual digital licences allows an increased number of programmes using less radio frequency spectrum.
This paper identifies the issues relating to the allocation of the digital dividend spectrum and provides proposed options for frequency use post-DSO. It also provides an opportunity for stakeholders to comment on the paper in order to inform the government of the viability of the proposed options and any potential alternatives.
A necessary part of dimensioning the digital dividend is to understand the future plans of existing broadcasters who have not yet commenced the transition to digital broadcasting. These include a number of broadcasters who operate only in a particular region of New Zealand, and the discussion document therefore includes a section which explores the options that might be adopted by such regional broadcasters. This may have implications for spectrum allocation and other government policies.
6. Regional Television Services
6.1 Introduction
With the world-wide move to digital-only transmission of television, and the New Zealand national television broadcasters, both pay and free-to-air, having established themselves as digital broadcasters, it is critical now for regional television broadcasters to plan ahead to DSO.
This section of the discussion paper considers the implications of a fully digital environment on regional television, and asks questions about how regional television and its audiences will be best served post-DSO.
The wider context for these questions is the changing nature of broadcasting which allows broadcasters and others to provide a range of ways for audiences to access programmes. Broadcasting-like content is available on multiple platforms from live streaming or on-demand to computers, or via mobile phones.
For now, however, satellite transmission and terrestrial transmission are the two main digital transmission options for regional television broadcasting. This section seeks your feedback on a number of questions about how these options might best apply to regional television – how feasible are they, how would they work best for all parties concerned, how should the move to digital transmission be best phased-in? In short, how can regional broadcasters and their audiences connect with and utilise digital technology post-DSO?
6.1.1 Context – The World Is Moving To Digital Television
New Zealand is a tiny corner of a global broadcasting and telecommunications environment where consumers can increasingly access overseas and national content in a variety of ways. Inevitably we are affected by the world-wide trend towards an all digital television environment. Several countries have achieved DSO – the United States (with the exception of some low powered services) parts of Germany, Sweden, and South Korea. Others such as the United Kingdom, Australia and Canada are moving towards DSO. Each country has developed its own timetable and approach that suits its needs.
Digital pay television has been available for some years in New Zealand with pay television broadcasters currently providing digital services: SKY on satellite, and TelstraClear (wholesaling SKY) on cable in the Wellington and Christchurch areas. Remaining analogue pay TV services are being turned down over time.
In 2006, government decided to take a planned approach toward supporting the move of free-to-air television to digital transmission. In 2006, it supported the establishment of Freeview, a consortium delivering a package of free-to-air digital television services on terrestrial and satellite platforms. The launch of digital services recognised the need for New Zealand to keep pace with technology developments internationally and was designed to ensure funded public broadcasting and local content would continue to be provided to New Zealand audiences in a digital environment. The national free-to-air broadcasters are broadcasting their services on the Freeview platforms, and simulcasting in analogue until DSO.
The number of households in New Zealand with digital television has now reached approximately 60 per cent. The government will set a firm date for DSO when household take-up reaches 75 per cent or by 2012, whichever occurs first. Government’s expectation is that DSO will happen by 2015 at the latest.
Most regional broadcasters broadcast only in analogue. Regional television broadcasters now need to develop plans for the transition to digital transmission.
6.2 Current position
There are approximately 20 regional television stations spread from the Far North to Invercargill on a mix of licences allocated commercially, non-commercially, or leased from other parties; and they either own and operate their own analogue transmission sites or purchase transmission services from others (generally Kordia). In any one area there is only one service using a non-commercially provided licence, but there may be some other commercially allocated licences in use.
There are five analogue regional broadcasters already using digital transmission:
- Chinese TV8 (Auckland) uses the Freeview terrestrial platform nationwide;
- TV Central (Waikato) uses the Freeview terrestrial platform regionally;
- CUE TV (Invercargill) uses the Freeview and SKY satellite platforms;
- Shine TV (Christchurch) uses the SKY satellite platform; and
- Juice TV (Auckland) uses the SKY satellite platform.
In addition Stratos, which carries some regional content from around the country, is broadcast on the Freeview satellite platform nationwide.
Many regional services, particularly the non-commercial ones, rely heavily on volunteer support and are relatively low cost operations by television broadcasting standards.
While nearly all broadcast some regional or local content, there is a wide range of content provided including community, Māori, ethnic, educational, tourism, and religious content. Some also have a large component of re-broadcast international programming.
Government support for regional television as outlined in Appendix 2 recognises the distinctive contribution of regional television to community and minority audiences in promoting local broadcasting, and supporting diversity and accessibility. Regional television is a vehicle for providing relevant content for New Zealand’s different localities and for minority audiences; programmes and content with a local flavour, such as regional news, complement the content provided by national broadcasters.
6.3 Adopting Digital
There are three broad digital transmission options for regional television: digital: terrestrial transmission, satellite transmission (or both), or to cease broadcasting and potentially become a content provider to either a national content aggregator or the Internet. In addition there may be value in considering approaches used in other countries.
6.3.1 International Approaches
In Australia, government initiated a Regional Equalisation Programme (REP) in 2000 to assist with the roll-out of digital television. The REP is available to regional commercial broadcasters. It provides a tax rebate on regional television networks’ licence fees to help them pay for their digital television infrastructure. Under the REP, up to A$250 million would be provided to regional commercial broadcasters as rebates (and in some cases by way of supplementary grants). No assistance is currently provided for community broadcasters.
In the United States, prior to DSO, regional broadcasters were able to apply for funding to assist with the transition to digital television through the US Department of Agriculture Rural Public Television Digital Transition Grants Programs. The grants were available to non-commercial broadcasters serving rural populations. Only a very limited number of awards were provisioned for under these programmes. Eligible broadcasters could receive up to US$750,000.
In Canada, there is no government assistance for regional television providers. However, DTH licensees are required to carry at least one independently-owned local station from each province. Terrestrial broadcasting distribution undertakings also have “must-carry” obligations applying to local television stations.
Across Europe there appears to be very little in terms of direct support for regional/community television transition. However, other broadcasting policies may assist such broadcasters more generally. For example “must-carry” rules which oblige cable and satellite platform operators to carry free to air and public service broadcasting channels, including regional/community providers. These rules vary country by country. Since 1992, the US has had must-carry obligations on cable operators which include local channels (except for low-power broadcasts). The US also has must-carry rules for satellite services whereby they must carry all of an area’s local stations if they carry any at all (although they are not required to carry local stations in every metro area). Sometimes these are placed on spotbeams (narrowly directed satellite signals) in order to allow the transponder frequencies to be re-used in other markets).
Other ways of supporting regional television include quota obligations and (indirectly) media ownership rules.
The UK Communications Act 2003 provides for the possibility of a licensing regime to enable digital local television services to be extended once spectrum becomes available. The Department of Culture Media and Sport, jointly with Ofcom, has been researching and consulting on the wider issues and economic models for local television generally.
In New Zealand, the regional broadcasters face many of the same DSO challenges as their counterparts overseas.
Question 23 |
Are any international approaches applicable to New Zealand? If so, how might they work? |
6.3.2 Terrestrial Transmission
The current digital terrestrial network covers 75 per cent of the New Zealand population in nine main centres (Auckland, Waikato, Tauranga, Hawkes Bay, Manawatu, Kapiti, Wellington, Christchurch and Dunedin). See Appendix 3 Digital Terrestrial Transmission Coverage.
A number of regional broadcasters are presently using this network, (or a satellite facility) to broadcast a digital service. There are several other regional broadcasters who, while within the current terrestrial footprint, remain broadcasting using solely analogue technology. These broadcasters have a technical option to acquire capacity on an existing licence, or if operating on a commercial licence to seek to operate using their own digital licence.
There remain approximately 10 regional stations which operate in areas not included within the present 75 per cent population coverage. Even if coverage was extended as far as 87 per cent, some regionals would still be outside such coverage.
If the present terrestrial footprint was extended it may offer further opportunities for regional broadcasters who are currently outside the current footprint. Any extension would need to be supported by a business case assessing the related costs and benefits. Areas of future extension would be to less heavily populated areas with smaller potential audiences for broadcasters and higher costs per viewer.
The extension of the present terrestrial footprint by the present licensees seems unlikely to be commercially viable in the present economic circumstances. Any Government support would therefore need to be weighed against other government priorities and the benefits to be gained from any extension; and the availability of funding cannot be assumed.
Extension of the footprint also becomes increasingly unlikely as the country moves closer to a DSO date. At present there are around 60 per cent of viewers who are watching a digital service, and as DSO nears the other 40 per cent will gradually adopt digital reception. Viewers in areas outside the terrestrial footprint will only have the option of satellite reception, so as digital take-up increases, this would further weaken the case for extension of the terrestrial service. That is, households outside the existing coverage will already have purchased satellite television equipment and are unlikely to make a second purchase of terrestrial equipment. The Ministry is nevertheless interested in views on terrestrial expansion in relation to regional services.
The cost of transmission is also a consideration for regional broadcasters. While terrestrial digital transmission costs are considerably less than satellite transmission, they are still higher than the costs of analogue transmission currently used by regional broadcasters. Additional costs would also be incurred through being included on the electronic programme guide on the Freeview platform. Section 6.3.5 below discusses these requirements more fully.
Question 24 |
Would geographic expansion of the terrestrial coverage provide a solution to you as a broadcaster or other interested party? Please state reasons why, or why not. |
UHF spectrum allocation
A number of regional broadcasters hold commercially allocated analogue licenses which could conceivably be converted to digital use. However separate spectrum licenses for each regional broadcaster have not been envisaged. Digital technology is very efficient in its use of spectrum, enabling about 8-10 digital television services to be combined (or ‘multiplexed’) on one UHF digital licence. This is fundamentally different from the analogue system where one licence is required for each television service, whereas digital licences are designed so several services can be carried on one licence. Where workable, regional broadcasters will therefore need to access transmission capacity on available licences in their local area rather than acquire a full licence.
The licences currently operated by TVNZ and MediaWorks are currently used for their own services while the licence held by Kordia provides carriage for non-licence holding broadcasters (including some regionals). There is capacity for some additional services to be carried provided that regional broadcasters only seek to transmit in their current areas. Some further “regionalisation” of the Kordia network may be necessary.
If there is inadequate capacity available, it may be necessary to consider a further licence allocation process. This is considered in Section 5 of this paper.
Question 25 |
What difficulties or opportunities do you perceive for your regional service in gaining access to transmission capacity on digital licences held by another party? |
Question 26 |
Could you envisage co-operating with other regional broadcasters to share a digital licence? |
Question 27 |
What other options are there for providing licence capacity for regional broadcasting? |
6.3.3 Satellite Transmission
Satellite transmission is provided via the Optus D1 satellite on which New Zealand broadcasters lease transponder space. Seven of the eight dedicated New Zealand transponders are leased to SKY Television, and one to Kordia. Kordia subleases transponder space to TVNZ (half the capacity), MediaWorks (a quarter) and the remaining capacity to other free-to-air broadcasters.
Satellite transmission has the advantage of being technically available to all of New Zealand, as its transmission is nationwide. The satellite signal cannot be regionalised, however.
Satellite transponder capacity is also an issue. Kordia has limited available capacity on its transponder. While additional capacity could be secured, it would be likely to require transponders which operate on a different polarisation of transmission. Kordia might consider leasing a second transponder, but it would need to do so on the basis of commercial viability and provide viewer and installation information on use of the different polarisation.
SKY has long term commitments to a significant proportion of the available satellite transponder space and already transmits some “non-SKY” programming for free to air reception. Regional broadcasters wishing to include their services on this platform would need to negotiate terms and conditions with SKY.
Finally, the costs of satellite transmission giving national coverage are two to three times higher than regional terrestrial transmission, but satellite transmission is the only current option for those outside the existing terrestrial coverage. Satellite costs include the annual uplink costs to the transponder and backhaul costs to link the regional broadcast to the uplink location. As with terrestrial transmission additional costs may also be incurred in relation to inclusion on a digital platform and related electronic programme guide.
Question 28 |
Is satellite transmission a feasible option for regional broadcasting? |
6.3.4 Content Aggregation
An alternative to digital transmission of a full regional service might be to provide locally produced programmes to a content aggregator; either a national provider or through collaboration by a group of regional broadcasters.
While this approach means a regional station would cease broadcasting independently, and the community benefit of a regionally based station wholly targeting viewers in the locality could be reduced, it does maintain the provision of localised content to audiences.
The content aggregator model requires a cooperative approach in allocating slots on the schedule; and sharing content and costs. Content providers would need to assess whether a viable business model exists for content aggregation in this way.
In a current example of content sharing, a number of regional channels upload some of their locally-made programmes to Stratos (owned by Triangle Television in Auckland), which can be received on both Freeview and SKY set-top boxes. This arrangement also allows regional broadcasters to download Stratos programming to supplement their local schedules.
Such a national content aggregator could operate on the terrestrial platform, a satellite platform, or even on both. Transmission capacity would need to be purchased to meet the model chosen.
Question 29 |
Would content aggregation be a feasible option for you as a regional broadcaster? |
6.3.5 Stand-Alone Terrestrial Transmission
There are two potential situations that have been considered for “stand-alone” digital transmission arrangements.
In the analogue world, stand-alone transmission arrangements independent of the national analogue transmission network have been feasible. These arrangements have typically involved the use of the broadcaster’s own transmission equipment on an available transmission site (such as a telecommunications tower). With digital technology there are a number of new issues to be considered.
Operation outside the established terrestrial coverage area
In such areas, the viewer would be reliant upon a satellite based service for access to the main national broadcasters. They would have either purchased a dish and satellite set-top box, or have opted to subscribe to the SKY service. These viewers would need to purchase a terrestrial capable set-top box in order to receive a stand-alone regional service.
While a number of viewers outside current terrestrial coverage will have purchased a television receiver with a built-in digital capability (IDTV), the majority would not have done so, at least until well after the DSO date.
These factors suggest that even if a separate terrestrial capability was provided in such areas it would not effectively be accessible by a significant number of viewers. Those viewers that did have a terrestrial reception capability would need to arrange their installations to receive the separate terrestrial service, with two (or three) remote controls. A single terrestrial service is not expected to give viewers strong incentive to either purchase the necessary technology, or persevere with the more complex reception arrangements.
The operation of a separate terrestrial service outside the current terrestrial footprint is therefore not considered viable.
Operation inside the established terrestrial coverage area
In such areas there can be expected to be a large number of viewers using purchased set-top boxes or IDTV capable receivers. It is therefore technically possible to transmit a separate digital service (i.e. one that is not part of the existing licences, and not necessarily from the same transmission site).
To achieve effective reception the transmission site should have comparable transmission power to the main services, and use a site that results in the same “antenna pointing” direction for most viewers’ aerials. This is not expected to be difficult, although the coverage achieved from a separate site will generally be somewhat less than achieved by the main site, which would have a more prominent location and higher antenna height.
The main issue is to ensure that any separate transmission can be tuned in by the viewer and can be easily accessed in the domestic environment. Tuning of a set-top box or IDTV should be possible, although it may need manual tuning to locate the separate service. In practice, the majority of viewers to the national broadcasters are likely to use the Freeview Electronic Programme Guide (EPG) to assess the available programmes and make their selections. All the terrestrial set-top boxes include such an EPG facility and it is recognised that this is the most convenient method of assessing and switching between programmes.
To be “findable”, a stand-alone service must therefore be listed on the Freeview EPG. This is technically possible, subject to meeting Freeview’s charges for using their services. It is also necessary to make arrangements to update the data files as required by Freeview.
As noted earlier in this paper, a digital licence can accommodate perhaps 8-10 separate services. Providing a single stand-alone service, therefore, is not a cost-effective use of a licence. While this is not a fatal flaw, it needs to be recognised by parties proposing to operate stand-alone transmission services. As some regional broadcasters have indicated an interest in converting their current stand-alone analogue arrangements to digital transmission, the following question seeks views on how these might work.
Question 30 |
Given the difficulties associated with stand-alone transmission in a digital environment, how could such an option work for regional broadcasters? |
6.3.6 Other Possibilities
Platform Access
In some countries governments apply “must-carry” rules to ensure that public broadcasting content is accessible to all viewers. These require nominated platforms (usually ‘pay’ or ‘conditional-access’) to carry specified channels e.g. in the Netherlands, must-carry rules specify that at least two local public broadcasting channels must be carried by cable operators (one channel at provincial level and one at municipal level).
Terrestrial services
In New Zealand, government has not imposed, and would be unlikely to contemplate the introduction of “must-carry” rules. In 2006, however, when government granted the three digital terrestrial licences to TVNZ, MediaWorks and Kordia, it reserved the right to trigger “must-carry” provisions included in the agreements with the licence holders. The “must-carry” conditions would require them – Kordia in the first instance – to provide unused capacity to carry one regional service in each region. The Kordia network has been engineered with this potential in mind.
It needs to be recognised that the current provisions relate only to terrestrial spectrum capacity and do not extend to the overall costs of providing transmitters, site services and programme reticulation. These costs are a commercial matter between the parties.
Satellite Platforms
SKY’s services are generally encrypted, but because it has the capacity to encrypt free-to-air satellite transmissions from other broadcasters a second uplink to the SKY platform would not then be required. Any unencrypted SKY service could be received by free-to-air satellite set-top boxes providing the EPG data was available.
SKY operates on a commercial basis without any particular controls or regulatory frameworks which facilitate intervention – for example SKY cannot be required to transmit certain services unencrypted. A broadcaster would need to negotiate directly with SKY to have access to its platform.
Freeview is a ‘not-for-profit’ and ‘open’ platform, meaning the terms of access to its platform are published and applied consistently to any broadcaster who wishes to join. The broadcaster would still need to lease or have access to transmission capacity, however.
The platforms are technically compatible although different EPG systems are used and, as noted, the SKY platform is generally encrypted. Provided there is agreement from the service provider and the transmission is not encrypted, it is possible to include EPG data in the relevant platforms to allow access from viewers on the other platform.
Question 31 |
Should the “must-carry” obligation on the current licences be re-negotiated to either expand the provision, or ensure it continues beyond DSO? |
Question 32 |
Are the current arrangements for access to either the Freeview or SKY satellite platforms satisfactory? |
Question 33 |
Are there any other measures in relation to transmission or to broadcasting platforms (including EPG arrangements) that should be considered? |
6.3.7 Broadband Opportunities
Live Streaming and On-demand Programmes via Broadband
A current broadband option is to view digital television on the internet using the cable that already connects the telephone to the exchange network. Programming includes live streaming such as the Parliament TV programme, and on-demand programmes. This is currently a limited option for viewers because of the variable quality (dependent on the connection speed and traffic on the overall connection to the programme source), limited range of material offered, and cost of broadband. It is anticipated; however, that options for internet transmission of ‘broadcast content’ will be considerably enhanced as access to high speed broadband is rolled out across the country.
Internet Protocol Television
One possibility not yet available in New Zealand is Internet protocol television (IPTV) which is delivered to a television set via a broadband connection. The government’s broadband investment plan will assist the technical possibility of introducing IPTV by bringing an ultra-fast network via fibre-to-the-home. This is planned to reach 75 per cent of homes and will be rolled out over ten years. Wireless technology is being explored as an option to extend ultra-fast broadband to communities outside this 75 percent.
IPTV will be more feasible as high speed broadband coverage is improved.
Question 34 |
Is broadband a feasible delivery option for regional services? |
Question 35 |
How would you manage the potential time gap between DSO and full roll-out of ultra-fast broadband and/or regional broadband infrastructure? |
6.3.8 Other Issues
Timing of Transition
It is clear that the move to an all-digital environment will mean a radical shift for regional broadcasters. Regional broadcasters cannot expect that their current business models will translate automatically to a digital world.
Not all transmission options are open to all regional broadcasters: Terrestrial transmission is available to some; others will need to assess the viability of satellite use. The option of collaborating with a national content aggregator may also be available. Even if regional stations were able to continue analogue broadcasts after DSO, their viewing audiences would dissipate as viewers move to digital services.
Regional broadcasters will need to examine their business models in the light of digital transmission costs and likely sources of income generation. Regional broadcasters will each need to determine the optimum time to move to digital transmission. This will require an assessment of the value of the remaining analogue audience as viewers transition to digital, versus the costs of analogue/digital simulcast until DSO. Leaving the move to digital too late risks losing audience; moving too early means bearing the costs of simulcast for longer than necessary.
Question 36 |
How will you make an assessment of the optimal time to commence digital simulcast of you analogue service? |
Licence Renewal
All analogue licences for regional television expire in March 2010. The Ministry for Culture and Heritage will make offers for renewal on a transitional basis to non-commercial licence holders, who meet specified criteria, until DSO. Commercial licences have varied terms for termination or renewal contracts at DSO. The Ministry of Economic Development has made offers to commercial licence holders which require settlement in September 2009.
The criteria for the renewal of non-commercial licenses will be guided by the government’s Regional and Community Broadcasting Policy Framework (see Appendix 2 ). This reflects government’s expectation that regional broadcasters will promote local content, support diversity and accessibility, and future-proof their services.
Government policies do not contemplate any extension of regional broadcasting using analogue technology after the DSO date has passed. Even if this was considered, the viewing audience necessary would likely not be significant, and would dissipate further over time. The Ministry therefore does not support such an outcome.
Government Assistance
Government financial support will be limited particularly in the current economic environment. The establishment and ongoing costs of digital transmission may be higher than current analogue costs and regional broadcasters will need to need to ensure the business model they choose is sustainable.
Any new government support would be taken in response to an over-arching policy rationale rather than case-by-case, and in all probability would be time limited. Any government support would also need to be commensurate with the value regional broadcasters provide to New Zealand audiences. Regional television reaches a niche (and often comparatively small) audience and its impact relates to its regional identity and community input.
Regional broadcasters provide regional and local content which is a distinctive contribution to national identity and complements the programming of national broadcasters.
Regional broadcasters need to meet the challenge of how best to deliver this content in a digital environment. In a digital world, more so than in the analogue environment, there are opportunities and an increasing need for regional broadcasters and other content providers to co-operate to achieve the most effective delivery of regional content. Your views are sought on how the broadcasters can achieve workable solutions to continue to reach audiences.
Question 37 |
How does the regional television service contribute to the communities in your area? |
Question 38 |
How do regional broadcasters currently generate income or other support for their operations? |
Question 39 |
If limited government support were available to assist regional broadcasters with the transition to digital transmission, what would be the priority? Why? |
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