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Way forward on digital television outlined

Way forward on digital television outlined

The government is to invite industry to establish a group to plan for the roll-out of digital television in New Zealand, Broadcasting Minister Steve Maharey and Associate Minister of Communications David Cunliffe said today.

It is inevitable that New Zealand broadcasters will migrate from the current analogue television to digital television in the future because of technological change and the age of existing equipment – although there is a need for a viable business plan to enable the rollout of free-to-air digital television.

Steve Maharey said decisions taken by the government ensure New Zealand broadcasters will be able to learn from digital television developments in other countries and will ensure that they are able to migrate to the new technology in the most cost-effective way to the benefit of consumers.

“Digital television is able to provide viewers with more programmes, interactivity and better picture quality than traditional analogue broadcasting – but no broadcaster has yet developed a business plan to roll-out free-to-air digital television in this country.

“Without a broad industry consensus, digital terrestrial television is unlikely to go anywhere very quickly. The government is enlisting the industry to work together to develop such a business case. A viable business model is an essential part of any investment in a platform to roll-out digital television.

“Planning for digital television was put on hold at the end of the 1990s, a decision now widely acknowledged within the industry to have been the right one. It’s now a good time to be working on this issue because we are able to take account of overseas experience, such as the development of the United Kingdom's free-to-air digital terrestrial platform,” Steve Maharey said.

David Cunliffe said the government has decided on how digital television spectrum should be allocated and wants to work with broadcasters on the most effective way of developing a digital television platform.

“Digital television can be provided in a number of ways, including satellite and terrestrial or land-based transmission.

“To help industry plan for digital terrestrial television, we have agreed in principle to an allocation plan for the necessary broadcasting spectrum.

"Actual allocation of spectrum will occur following further consideration of demand and industry developments. We will also make some changes to management of the spectrum used for satellite television to increase the available capacity.

"We will continue to make spectrum available for testing of digital terrestrial services, and we will also allow holders of existing licences the ability to swap those licences for digital ones at no extra cost. This puts conversion to digital within reach of some existing broadcasters,” David Cunliffe said.

Steve Maharey said public broadcasters such as TVNZ will be invited to plan for the provision of digital content. In addition, interested parties will be contacted over the next few months and invited to establish a digital television group.

Terrestrial analogue coverage will continue for the foreseeable future. TVNZ terrestrial transmission to remote areas, previously a NZ On Air responsibility, will now be maintained through a direct subsidy to TVNZ.

A backgrounder on digital television is attached.

Cabinet papers relating to digital television platforms and standards and spectrum management are available on the Ministry of Economic Development website at http://www.med.govt.nz.

The current television broadcasting system All present New Zealand terrestrial (i.e. land-based) television services employ analogue terrestrial transmission using radio frequency spectrum in the VHF and UHF bands from hill-top sites to give coverage of main population areas, supplemented by many low-powered transmitters in areas shaded from the main sites.

Most satellite broadcasting is already in digital format, including the “Sky Digital” satellite platform, which approximately 30% of households have. Sky use a “conditional access” system to encrypt most programmes, including TV3, TV4, Prime and Trackside. TVNZ also has its own satellite capacity, which it currently uses to broadcast unencrypted regional versions of TV One and TV2. These TVNZ programmes are available to any person owning suitable satellite receiving equipment and also, by agreement with Sky, to Sky Digital subscribers. TVNZ does not currently promote a separate free-to-air satellite service, but a number of independent retailers sell free-to-air satellite receiving equipment to the public.

Telecom NZ has recently announced plans to distribute television services in digital format over its broadband network, which can commence without alteration to current government policy. TelstraClear currently distributes Sky programmes via its cable system in analogue format.

What is digital television? Digital television is a method of transmitting television and other information to the home. Broadly speaking, four platforms are able to provide digital television: terrestrial, satellite, cable, and network or Internet connections. Of these platforms, only digital terrestrial television (DTT) requires government action to commence, through government ensuring suitable spectrum is available.

In comparison to analogue television, digital television can offer additional programmes using the same amount of spectrum, as well as integrated teletext, electronic programme guides and features such as choices of camera angles or language. Other services can also be distributed in addition to, or in place of, television services such as Internet access, email, banking and teleshopping. Digital television can also provide viewers with improved picture and sound quality.

The state of play for digital terrestrial television (DTT) A major focus of the broadcasting industry to date has been to map a pathway for DTT, which was originally predicted to rapidly replace existing analogue terrestrial television. However, experience internationally has shown that actual uptake and successful use has been slower and more limited than initially predicted.

Current government and industry planning for New Zealand DTT is based on internationally recognised standards using spectrum in the UHF TV bands. Capital investment required for existing broadcasters to establish a basic DTT platform would be relatively modest, as much of the existing distribution system is already digital capable. Some in the broadcasting industry are sceptical that an economic model for DTT will emerge, however, and are considering alternative digital television platforms such as free-to-air satellite. Others see DTT as inevitable in the long-term for up to 80% of New Zealand’s population.

Government decisions to date In December 1998, amidst initial industry enthusiasm for digital television, the previous government decided to auction suitable spectrum for DTT. Following the change of government in November 1999, digital television issues were instead taken up as part of a new broadcasting work programme.

In December 2002, Cabinet agreed on objectives to guide future digital television policy development. Cabinet agreed that broadcasters and viewers should be free to choose the platform (e.g. satellite, terrestrial or cable) by which digital television is provided, based on factors such as cost, content and reliability. Cabinet also decided not to set an analogue switch-off date initially, but to be open to an industry-agreed switch-off date to encourage late-adopters.

Cabinet directed officials to report back on a number of issues, leading to the present decisions. Cabinet considers that further development of digital television services in New Zealand is likely to be best assisted if government, public and commercial broadcasters, and related industry interests work co-operatively to resolve key issues. The Government has concluded that planning and investment in digital television transmission platforms clearly requires a satisfactory business case (which must consider platform establishment costs, ongoing transmission costs, costs of digital programming, promotion and, ultimately, attractiveness to consumers) before proceeding.

The present decisions of Cabinet include: TVNZ and the Mâori Television Service are to prepare plans for digital services, beginning with a planning timetable;

where content is publicly funded it should continue to be available free-to-air;

the Ministry of Economic Development is to monitor terms of access to satellite broadcasting capacity;

government is to liase with the wider broadcasting industry regarding the development of a New Zealand digital TV group to plan for and promote digital television;

the broadcasting industry and Standards NZ should continue to have the primary role in adopting technical standards for transmission and reception of digital TV which promote consumer confidence;

holders of spectrum licences are to be able to convert existing analogue licences to digital licences suitable for DTT, subject to existing valuation policies and technical compatibility;

agreement in principle to: the reservation of two nation-wide sets of spectrum licences suitable for DTT in the UHF bands (i.e. sufficient spectrum for up to 10 or more programmes) for simulcasting existing analogue television services in digital format and/or for public broadcasting;

competitive allocation by auction of four nation-wide sets of interleaved spectrum licences suitable for DTT in the UHF bands presently used for commercial services, and of two 8 MHz management rights in respect of spectrum between 502-518 MHz;

an auction of DTT spectrum will only be held when there is sufficient demand, and subject to the government reconfirming the agreed allocation option; access to satellite broadcasting capacity will be improved by moving some existing terrestrial services to other bands. TVNZ analogue terrestrial transmission to remote areas, previously a NZ On Air responsibility,

will now be maintained through a direct subsidy to TVNZ.

Next steps The Minister of Broadcasting and Associate Minister of Communications will contact interested parties over the next few months inviting them to establish a digital television group. The challenge is for industry to work co-operatively towards a digital roll-out based on a sound economic model.

Further information Cabinet papers relating to digital television platforms and standards and spectrum management will be available on the Ministry of Economic Development's website ( http://www.med.govt.nz).

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