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WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Contact Officer and Copyright Details
Television Broadcasting Services (Digital Conversion) Bill 1998
Date Introduced: 8 April 1998
House: House of Representatives
Portfolio: Communications, the Information Economy and the Arts
Commencement: Royal Assent
To amend the Broadcasting Services Act 1992
and the Radiocommunications Act 1992 to provide for the introduction
of digital television.
Digital Television Systems
The free-to-air television services currently received by Australians
are terrestrial analog broadcasts: the signal is transmitted from towers
to home receivers in the form of a continuous wave. With Digital Terrestrial
Television Broadcasting (DTTB), the signal is in the form of discrete
bits of information. The advantage of the DTTB signal is that it can be
manipulated: the digital data stream can be compressed, thus using the
available spectrum more efficiently. Background noise and interference
can be more readily removed to improve video and audio reception. The
move to DTTB requires the upgrading of both the transmitting infrastructure
and the televisions that receive the signal.
DTTB systems have been designed to operate using the same channel bandwidth
as analog systems so that they can be more easily integrated with the
current usage of the spectrum. A single DTTB transmitter provides the
capacity to send around 20 million bits per second of data to the home.
This data rate is sufficient for one high definition television picture
of a live sporting event or, possibly, two high definition movie channels.
The same 'data pipe' is capable of carrying around 3-4 live sports programs
of conventional television quality, or 6-8 'talking heads' programs at
about videocassette quality. This capacity to replace a single analog
channel with a number of digital programs is sometimes referred to as
"multi-channelling" or "multiplexing". The spare capacity
created by digital transmission can also be used to provide captioning,
news and market information and other services to receivers. The services
that can be broadcast digitally (whether in the form of data, text, sound
or images) are sometimes referred to as 'datacasting' services.
Different DTTB systems are being developed in both the US and Europe
and Australia will eventually have to choose which one to adopt. The European
system may have the advantage of being more compatible with the PAL system
currently used in Australia, although the US system may be better geared
to high definition television (HDTV). Other factors to consider will be
the availability of consumer equipment and the capability of the system
to achieve Australian spectrum objectives.
Cost of the Transition
It is estimated that infrastructure upgrading will cost the three commercial
TV networks about $500 million in capital investments in the first three
to four years as well as adding $30-50 million to their annual operating
costs. For the ABC and SBS, the combined cost could be around $200 to
$250 million.
To receive digital television consumers will require either a new digital
television set or a set-top box to convert the signal for their current
analog receivers. The use of a converter or a standard digital set will
not improve the actual image quality, but it will eliminate ghosting and
interference and provide CD quality sound. To receive HDTV directly, a
special wide screen high definition digital television will be required.
These are said to provide a picture quality around seven times better
than that of analog sets.
As well as unscrambling terrestrial digital TV signals, the set top boxes
(or converters) could also be capable of receiving digital cable and satellite
TV and of connecting via modem to the telephone network, thus creating
a path for the convergence of telecommunications, television and computing
services.
Estimates of the cost of this new equipment to the consumer have varied
considerably. In the document 'Digital Broadcasting - Q & A' released
on 24 March 1998, the Department of Communications, the Information Economy
and the Arts stated that:
It is difficult to predict how much sets will cost, and the price could
fall rapidly once the market is established. Large widescreen digital
sets capable of displaying high definition video will probably cost
several thousand dollars, while conventionally sized sets are likely
to approach the prices of current sets. The price of set top boxes will
depend upon their functionality, but will probably be a few hundred
dollars.
Recent media reports have quoted much higher initial costs: set top boxes
at $1000 (falling to $500 after a few years), digital TVs at three times
the cost of comparable analog sets, and HDTV sets at around $7500-$10000
('Digital TV free soon but keep the old set', The Weekend Australian,
18-19 April 1998, p.3).
The economic impact of the transition, in terms of household expenditure,
should not be that significant. Current household expenditure on television
equipment is around $150 p.a. Average household expenditure on new digital
television equipment would thus have to be greater than $1200 over the
eight year transition period before it exceeded current expenditure levels.
The Australian Broadcasting Authority
(ABA)
The ABA has monitored developments in digital television since 1993,
when it established a specialist group comprising industry and government
experts to examine options for DTTB systems suitable for Australian conditions.
A discussion paper, Issues and Options for Digital Terrestrial Television
was released in December 1993 and in January 1997 the final report of
the specialist group, Digital Terrestrial Broadcasting in Australia
was presented to the Authority. The report recommended that:
- Australia should adopt a single system standard for DTTB after completion
of detailed technical evaluation trials in Australia of candidate systems;
- DTTB should be implemented in Australia with digital high definition
television (HDTV) capabilities available from the outset;
- all existing licensed commercial and national television services
should be given access to a full 7 MHz bandwidth DTTB channel and be
given full control over the use of the delivery capacity of that channel;
- the year 2000 could be a useful target date for commencement of permanent
DTTB broadcasting in Australia (and the commencement of the development
phase). The period between now and the commencement in 2000 might be
regarded as an experimental phase; and
- the eventual termination of PAL services after the commencement of
DTTB services in Australia should be driven by market factors and subject
to regular review. The decision should be made in the light of findings
and in consultation with both government and industry organisations.
In July 1997 the ABA responded to the Specialist Group's report with
its Paper, Digital Terrestrial Television Broadcasting, which recommended
to the Government that it support the early introduction of DTTB into
Australia. It considered that DTTB should be a free-to-air service rather
than a form of pay TV and it endorsed the loan of a 7MHz channel to each
of the ABC, SBS and the three commercial networks, as this would enable
the introduction of HDTV from the outset.
Views of Interested Parties
There has been a broad range of views on the appropriate policy for Australia:
- the Federation of Australian Commercial Networks (FACTS) has argued
that free-to-air broadcasters (FTAs) should be allocated 7 MHz of spectrum
free of charge, with a 15 year period of exclusive use. This would enable
the introduction of HDTV, the simulcast of existing analog channels,
and the absorption of the cost of the conversion. FACTS would also like
its members to have the freedom to offer multi-channel services. The
Australian Association of National Advertisers has supported the FACTS
position;
- the Australian Subscription Television and Radio Association (ASTRA)
has questioned the commercial viability of HDTV and has argued for a
system that is based on the competitive pricing of spectrum and which
provides an opportunity for the entry of new players. ASTRA is particularly
opposed to the free-to-air television broadcasters being permitted to
offer multi-channel services using spectrum they have been given free
of charge;
- the Australian Broadcasting Corporation has asked for access to sufficient
spectrum to allow it to either broadcast HDTV or to multi-channel. The
Managing Director, Mr Brian Johns, has stated that the ABC hopes to
be able to run up to four channels at different times of the day. The
ABC has also claimed that it would cost over $100m over the next 3-5
years to prepare for digital broadcasting and that the ABC could only
cover about half these costs. It has been reported ('ABC closer to victory
in war on outsourcing', The Australian, 7 April 1998) that a
funding review of the Corporation by consultant Arthur Andersen has
concluded that it will have a deficit for the digital transfer of $30-$50
million over five years, given projected costs of $190-$220 million;
- Telstra has argued against the allocation of free spectrum to the
FTAs as it would threaten its investments in data and online services,
the broadband network and pay TV. It believes that if the FTAs wish
to enter these areas then they should be subject to a competitive bidding
process;
- regional television broadcasters have supported the FACTS position
and have also argued for a prohibition on new entrants in regional television
markets until the end of the transition period, a licence fee rebate
and tax relief on infrastructure inputs. They believe that special arrangements
are necessary to achieve digital television in regional areas within
a reasonable timeframe;
- internet service provider, OzEmail, has argued for the setting aside
of spectrum earmarked for digital TV for the introduction of interactive
data services. Other independent online content providers have expressed
concern that the FTAs might eventually control future web TV services,
where users can access the internet through a television set, as well
as digital television.
Developments in the UK and US
The Broadcasting Act 1996 (UK) provided for the introduction of DTTB
in the UK. Digital services will be simulcast with the current five analog
services: BBC1, BBC2, Channels 3 (ITV), 4 and 5. Licences were awarded
by the Independent Television Commission (ITC) initially for a twelve
year period, but renewable for a further twelve years. The selection was
a "beauty contest" with no cash bids or revenue requirements
for the first twelve years. Although the selection criteria emphasised
plans to roll out the digital transmission infrastructure, there is no
formal timetable for the conversion to digital broadcasting. HDTV will
not initially be part of the system. Digital services are expected to
begin later this year. In five years the BBC and ITC will report to the
Government on the progress of conversion.
The British have adopted a multi-chanelling approach to DTTB. The digital
transmitters, or "multiplexes", are licensed separately from
the program services they carry. There are six multiplexes available,
each capable of carrying five channels. One will go the BBC to broadcast
its current two services, together with a new free-to-air 24 hours news
service and other BBC services. One multiplex will be shared by the commercial
broadcasters, ITV and Channel 4. They will be able to offer both free-to-air
and pay TV services. One half of a multiplex will go to both Channel 5
and the Welsh service (Wales only). The remaining 3.5 multiplexes will
go to a consortium comprising existing broadcasters Carlton Communications
and Granada. They will transmit pay TV services. BSkyB, the current major
satellite pay TV operator, was prevented from being part of the consortium,
although its programs can be carried by the multiplexes.
Ownership and control rules limit the number of multiplex licences any
one person can hold to three. Holders of digital program licences are
limited to an aggregate audience share of 15 per cent of total UK television
time.
In the US existing free-to-air broadcasters have each been allocated
a channel for digital transmission for no additional fees. They will be
required to broadcast a free digital program for the same hours as their
current analog programming. They may broadcast HDTV, but are not required
to do so. If they wish to use their spare capacity for datacasting services,
then they must pay additional charges.
It is planned that about half of the US population will be receiving
DTTB by the end of 1999. The analog spectrum is to be surrendered by 2006,
although there may be extensions in special circumstances.
The Government's Decisions
On the 24 March 1998 the Minister for Communications, the Information
Economy and the Arts, Senator the Hon. Richard Alston, announced the Government's
decisions on the introduction of digital television. The main elements
were as follows:
- the commercial and national free-to-air television broadcasters (FTAs)
will be loaned 7 MHz of spectrum free of upfront charge. In return they
will be required to simulcast their existing service in analog and digital
format for 8 years, after which they will have to return the equivalent
of their loaned spectrum to the Commonwealth;
- the FTAs will be required to commence DTTB in metropolitan areas by
1 January 2001 and in regional areas from that date onwards so that
all areas have DTTB by 1 January 2004.
- Following the start-up of DTTB, the FTAs will be required to broadcast
minimum levels of HDTV, with these levels increasing over time. If the
FTAs do not comply with these requirements they will forfeit their loaned
digital spectrum.
- FTAs will be able to use that part of their loaned spectrum not utilised
for DTTB to provide datacasting services, but will have to pay fees
to ensure that they do not have an advantage over non-FTA datacasting
providers. Available broadcasting spectrum not required by the FTAs
for digital conversion will be allocated on a competitive basis for
the transmission of datacasting services, which will commence at the
same time as the transmission of DTTB. Existing FTAs will not be permitted
to bid for this spectrum.
- FTAs will not be permitted to use their digital spectrum for multichannelling
or subscription television services, although they will be allowed to
provide enhancements directly linked to programs simulcast on their
analog channel.
- The prohibition on new commercial FTA entrants will be extended until
December 2008.
- The current local content requirements will continue to apply in the
digital environment. In addition, the FTAs will be required to provide
closed captioning for all prime time programming as well as for news
and current affairs broadcast outside prime time.
- The Government is still considering the funding requirements for the
ABC and SBS for digital conversion, as well as whether the national
broadcasters will be permitted to broadcast non-commercial multi-channel
programming in line with their charter obligations.
- A number of committees comprising representatives of the Department
of Communications, the Information Economy and the Arts, the ABA and
the Australian Communications Authority (ACA) will be established to
advise on regulatory and technical matters relating to the conversion.
The Government has thus broadly followed the US approach, but with mandatory
requirements for the introduction of HDTV (although the timetable for
HDTV has not yet been resolved). One measure of the success of this policy
will be the number of households that opt for the more expensive HDTV
sets.
Regulatory Approach
The conversion to digital broadcasting requires amendments to both the
Broadcasting Services Act 1992 and the Radiocommunications Act
1992. The former sets out the ownership and programming conditions
for broadcasting licences and is administered by the ABA. The latter regulates
the usage of the spectrum, including the licensing of transmitting apparatus,
and is administered by the ACA.
The legislation instructs the ABA to formulate digital conversion schemes
for commercial and national (ABC and SBS) broadcasters in accordance with
the announced policy decisions. In formulating these schemes the ABA is
required to comply with published Ministerial directions. The regulations
giving effect to the schemes will be disallowable instruments. The scheme
for the ABC and SBS is subject to Ministerial approval.
The ABA is also required to make disallowable determinations with regard
to datacasting charges. The ACA is required to report to the Minister
on the competitive neutrality principles it considers in developing its
proposals for datacasting charges. This report must be tabled. Datacasting
charges are the subject of related revenue legislation, the Datacasting
Charge (Imposition) Bill 1998.
The Bill also provides for the introduction of a transmitter access regime
to ensure that broadcasters and datacasters have access to transmitting
facilities. Access will be in accordance with a Code to be written by
the Australian Competition and Consumer Commission. Regulations enforcing
the Code will be disallowable instruments.
Schedule 1
Schedule 1 contains amendments to the Broadcasting Services Act 1992.
Item 10 inserts new conditions for commercial broadcasting licencees.
They are to comply with the conversion scheme devised by the ABA [new
section 7(1)(k)]. During the simulcast period licencees are prohibited
from broadcasting a digital program unless: (1) they also broadcast the
same program simultaneously in analog mode, or (2) the program is permitted
under the regulations because it is incidental and directly related to
the simulcast program [new section 7(1)(m)].
Item 12 adds a new Schedule 4, "Digital television
broadcasting" to the Act.
Part 2 of new schedule 4 provides for the ABA to formulate a scheme
for the conversion of commercial television broadcasting services to digital
mode [new section 5(1)]. New section 5(2) sets out the policy
objectives for this scheme. New section 7 requires the scheme to
provide for the return of spectrum if digital transmission does not take
place, or if HDTV standards are contravened. New section 8 requires
the commercial television broadcasters to submit implementation plans
to the ABA.
Part 3 of new schedule 4 provides for the ABA to formulate a digital
conversion scheme for the ABC and SBS [new section 17(1)]. New
section 17(2) sets out the policy objectives for this scheme. New
section 18 requires to ABC and SBS to give implementation plans to
the Minister for approval. New section 21 requires the scheme to
provide for the return of spectrum if digital transmission does not take
place, or if HDTV standards are contravened. New section 32 prohibits
the ABC and SBS from broadcasting a digital program unless: (1) they also
broadcast the same program simultaneously in analog mode or, (2) the program
is permitted under the regulations because it is incidental and directly
related to the simulcast program or (3) the program is permitted under
the regulations.
Part 4 of new Schedule 4 requires that the regulations must specify
targets and standards for HDTV programming (new section 34), the
captioning of programs for the deaf and hearing impaired (new section
35) and datacasting (new section 37).
Part 5 of new Schedule 4 implements a transmitter access regime.
New section 42 requires owners of transmission towers to provide
access for digital broadcasting to the ABC, SBS, commercial television
broadcasters and datacasters. New section 45 provides that the
Australian Competition and Consumer Commission may write a Code setting
out conditions relating to access.
Part 6 of new Schedule 4 provides for the collection of the charge
to be imposed by the Datacasting Charge (Imposition) Bill 1998.
Part 7 of new Schedule 4 enables the ABA to apply to the Federal
Court for restraining and performance injunctions to ensure that commercial
broadcasters adhere to their implementation plans [new section 51(1)
and (3)] and that transmitter owners follow the access regime [new
section 51(2) and (4)].
Part 8 of new schedule 4 requires the Minister to order a review
by 1 January 2001. Particular matters for the review to consider include:
the restrictions on new programming services in the simulcast period;
the re-transmission of digital FTA services by pay TV operators; commercial
television services in regional areas; a community television service;
the allocation of spectrum for datacasting services. A further review
is to be ordered by the Minister before 31 December 2005. This will deal
with the simulcast requirements and duration and the general efficiency
of the system.
Schedule 2
Schedule 2 amends the Radiocommunications Act 1992. Item
6 inserts new section 100B to require the ACA to issue transmitter
licences for digital broadcasting to the ABC and SBS. Item 8 inserts
a new section 102A to make a similar requirement for the commercial
broadcasters.
Kim Jackson
20 April 1998
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1998
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Published by the Department of the Parliamentary Library, 1998.
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