Digital TV-Lost in Space

Current Issues Brief 19 1997-98

Ross Kilmurray
Law and Bills Digest Group
23 June 1998


Major Issues Summary


The Objects of the Broadcasting Services Act 1992.


Analog Technology and Analog Television

Digital Technology and Digital Television

Spectrum Use

High-Definition Television (HDTV)

Multi-channelling (SDTV)

Data Transmission

Mobile and Cordless Television

A new Marketplace?

Key Elements of Policy-Broad Reactions

The conditional eight year period

The HDTV mandatory preference

Datacasting services

Prohibition on multi-channelling and subscription TV

ABC and SBS funding

Concluding Comments


Appendix 1: Technical Matters




Australian Broadcasting Authority


Australian Broadcasting Corporation


Australian Communications Authority


Australian Football League


Australian Subscription Television and Radio Association


US Advanced Television Systems Committee


Compact Disc


Consolidated Revenue Fund


Digital Terrestrial Television Broadcasting


Digital Video Broadcasting


Federation of Australian Commercial Television Stations


Federal Communications Commission (US)


Free-to-Air (broadcasters)


Gross Domestic Product


High Definition Television


Mega Hertz


acronym for American standard analogue television transmission system


Organisation for Economic Co-operation and Development


acronym for Australian (and some European) standard analogue television transmission system


Personal Computer


Radio Frequency


Special Broadcasting Service


Standard Definition Television


Spectrum Management Agency


Time Base Corrector

Major Issues Summary

Analog technology has been used from the beginning of television broadcasting worldwide to provide viewers with analog television programs via the broadcast spectrum. Now, analog is about to be superseded by digital technology-a highly advanced form of electronic delivery. This new form of delivery enables the broadcast spectrum to be used far more efficiently than in the past, allowing licence holders to offer consumers a greater choice of content-in addition to traditional television programming. Digital broadcasting also allows for the introduction of high-definition television.

The proposed start-up date for digital television in major metropolitan areas for free-to-air television is 1 January 2001. The estimated cost of the necessary infrastructure upgrading of the three commercial networks is about $500 million in capital investments in the first three to four years with estimated additional operating costs of $30-50 million annually. For the ABC and SBS, the combined cost may be around $200-250 million.

Digital broadcasting is being introduced on a relatively tight timetable that has implications for both industry participants and the making of public policy. Large economic 'rents' are involved and whatever public policy choices are made will affect the daily lives of most Australians.

Whilst the introduction of digital television has the capacity to excite widespread public discussion, interest to date, as one would expect, has been greatest among industry participants and others, including the growing list of converging media and communications companies, directly affected by the Government's 24 March 1998 announcement.

The high start-up costs, a sense of urgency stemming from pressures, including industry's need to secure access to the currently scarce broadcast spectrum, has influenced policy-makers to expedite matters.

Legislation, principally the Television Broadcasting Services (Digital Conversion) Bill 1998, has been prepared and the Government's associated announcement has set the parameters for public discussion and the substantial work and investment program that is to follow.

Given the sums involved and the power potentially wielded by those with access to the new technology, it is also not surprising that the Government's plans have been contested by some in the industry as well as by some 'outsiders'. Significantly, the Australian television industry's contribution to GDP is similar to that of our textiles, clothing, footwear and leather industry's contribution to GDP. Given the stakes and the number of potential 'players', any plan is unlikely to please everyone.

The commercial broadcasting networks, through their industry representative the Federation of Australian Commercial Television (FACTS), argue that they should be given free and exclusive use of the spectrum for a sufficient period of time in return for implementing and financing the high cost of digital transmission.

A coalition, including newspaper rivals News Ltd and John Fairfax Holdings, communications companies Telstra, Optus, Foxtel and the Australian Consumers' Association, claim that consumers have been kept in the dark while a decision of staggering proportions has been made.

Public broadcasters, the ABC and SBS, have necessarily focussed on funding issues.

Access to the spectrum will place the incumbent and any new licence holders at the forefront of what may be the technical equivalent of the industrial revolution-digital television.

Government regulation and licensing of the spectrum will affect not only how we are educated, entertained and informed, but how we educate, entertain and inform others, how we shop, how we keep healthy, how we monitor governments, access the arts, culture and the humanities, how we participate in local, state, national and international affairs and how we apply for the jobs which all this will create.

Policy aside, the Television Broadcasting Services (Digital Conversion) Bill 1998 amends an Act that primarily relates to analog technology. It will add to a legislative framework that does not primarily deal with digital technology and the possibilities it creates. The main objects of the Act are to promote a diverse range of radio and television services offering entertainment, education and information in a framework, which is competitive and responsive to audience needs.

The Organisation for Economic Co-operation and Development (OECD) has redefined broadcasting services to properly reflect the new possibilities which digital television offers. Australia has yet to do so.

Two questions arise-first, is the current legislative framework the most appropriate to deal with the introduction of digital television? Second, have all the issues surrounding the introduction of digital television been fully canvassed?


Current debate and public discussion of the proposed introduction of digital television is focussed on the Television Broadcasting Services (Digital Conversion) Bill 1998 (the Bill) introduced on 8 April 1998 to facilitate the introduction of Digital Terrestrial Television Broadcasting (DTTB) in Australia. The Bill is to amend the Broadcasting Services Act 1992 (the Act) to provide for the conversion from analog to digital television. The Bill also amends the Radiocommunications Act 1992.

Commercial television broadcasters are set to use new rights under the provisions of the Bill to commercially exploit a limited and extremely valuable public resource-spectrum space. The Bill carries forward the recommendations of the Australian Broadcasting Authority (ABA) for the introduction of digital television.

This paper provides a background on the proposed introduction of the Bill. A recent Senate inquiry into the Government's proposed legislation has heard conflicting evidence on the need to fast-track legislation. Senate debate is scheduled for the week commencing 22 June 1998.

The main elements of the Government's proposed legislation are as follows:

  • the commercial and national free-to-air television broadcasters (FTAs) will be lent 7 mega-hertz (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
  • FTAs will be required to commence DTTB in metropolitan areas by 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 high-definition television (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 multi-channelling 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, Information Economy and the Arts, the Australian Broadcasting Authority (ABA) and the Australian Communications Authority (ACA) will be established to advise on regulatory and technical matters relating to the conversion.(1)

There has been a broad range of views on the appropriate policy for Australia. Prospective new participants have spent considerable time and money lobbying the Government arguing for a level playing field in spectrum allocation.

In response to the Government's policy:

  • the Federation of Australian Commercial Television Stations (FACTS) argued that the 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, in particular, opposed to the FTAs being permitted to offer multi-channel services using spectrum they have been given free of charge
  • the ABC 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.

The ABA convened the Specialist Group, which considered the application of digital transmission technology to terrestrial broadcasting in Australia. In January 1997, the final report of the Specialist Group, Digital Terrestrial Television Broadcasting in Australia, was presented to the ABA for consideration. The recommendations of the Specialist Group outlined policy issues to be addressed, considerations and actions that flow from threshold decisions, and implementation considerations.(2)

The Objects of the Broadcasting Services Act 1992.

The main objects of the Act are to:

  • promote the availability to audiences throughout Australia of a diverse range of radio and television services offering entertainment, education and information
  • provide a regulatory environment that will facilitate the development of a broadcasting industry in Australia that is efficient, competitive and responsive to audience needs
  • encourage diversity in control of the more influential broadcasting services
  • ensure that all Australians have effective control of the more influential broadcasting services
  • promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and culture diversity and
  • promote the provision of high quality and innovative programming by providers of broadcasting services.(3)

The main issue here is whether this legislative framework, which deals primarily with analog technology, is appropriate to facilitate the introduction of digital television.

The Final Report (the Report) of the ABA's Specialist Group specifically addresses this issue:

The Act is concerned with the regulation of broadcasting content and broadcasting content providers rather than the carriage of the program which is subject to regulation under either the Radiocommunications Act 1922 or the Telecommunications Act 1991 depending on the means of transmission used.

The widespread adoption of digital technology for broadcasting delivery will require reappraisal of some of the current rules so that they might assist in the development of service diversity and in the development of new and innovative services that take advantage of the capabilities of digital transmission.

With digital technology the current concept of what constitutes a channel largely disappears. The service is delivered by a digital data stream that may contain one or many services embedded in it. Furthermore, what might be a high definition single video channel at one time (say for live sport) might become four or five lower quality movie channels at another. Should each of these video channels constitute a separate service if they are not in a state of continuous program transmission? Would multi-program transmission time require the programs to be defined as separate services? Depending on how this issue is resolved would the present limit of one television service per market continue to be relevant? If not, how should the limits be redefined?(4)

The Specialist Group also makes the point that the distinctions between broadcasting and other services will inevitably continue to blur as the transmission technologies converge.


Analog Technology and Analog Television

The current television picture is based on an analog transmission system that is over forty years old. Australia used this system when television broadcasts began in 1956. The only significant advance in analog television since has been the introduction of colour television in 1975.

Technically, the analog signal can be easily distorted as it travels through the air from the television station to the home and may produce ghosting or picture noise. Analog also requires the full aspect or bandwidth of the spectrum and a clear and unobstructed delivery path from broadcaster to viewer.

Digital Technology and Digital Television

Digital technology allows the spectrum to be used, not only for television programs, but for Internet service providers, datacasting networks, educational institutions, community, indigenous and ethnic groups, banks and financial institutions, radio broadcasters, governments and political parties, information service providers-the list goes on.

Currently, 7 MHz of spectrum space is used to deliver each channel of analog television to our homes. The same 7MHz of spectrum space will be used for digital television. However, digital television will be radically different. Unlike the analog signal, a digital signal does not easily distort as it travels through the air. The pictures at home will be exactly the same quality as the one that is transmitted by a television station (no ghosting or picture noise). The pictures will either arrive 'picture perfect' or it will not arrive at all. In addition, this new digital technology offers broadcasters a technique called compression which, as the name suggests, allows the television signal to be compressed, thereby enabling the same 7MHz of spectrum to carry more channels. Furthermore, because the current analog system cannot be compressed, part of the broadcast spectrum is used as a barrier between channels to eliminate interference. New digital engineering now enables this 'junk spectrum' to be used commercially. The capacity or use of the spectrum is therefore enhanced or enlarged by digital technology. It offers a far more efficient use of the spectrum, thereby optimising its use and substantially increasing its value.

Digital technology now offers far greater alternatives to licensees of the spectrum. The concept can easily be understood if we think of digital television as being the delivery system of digital technology. All those possible spectrum uses mentioned earlier could simply be provided to the consumer through digital television.

Spectrum Use

Digital technology enables the spectrum to be used in a number of ways:

High-Definition Television (HDTV)

Digital technology will allow programs to be broadcast in much higher resolution or clarity than today's television. This is called high-definition television, or HDTV. Purchasers of an HDTV set will be able to receive high quality, crystal clear pictures displayed in a wide screen 16 x 9 aspect ratio format. Our current television ratio is a 4 x 3 'box square' aspect ratio format.

An HDTV set will deliver CD quality sound through high quality speakers and may incorporate laserdisc and digital video technologies, offering a complete 'movie theatre' experience in the home.

Multi-channelling (SDTV)

When programs are not being broadcast in HDTV, digital technology will allow each station to transmit not one, but four or more standard definition programs simultaneously. This is called Standard Definition Television (SDTV) or 'multi-channelling'. Multi-channelling requires the use of compression technology, which is not possible with today's analog system.

Data Transmission

Digital technology will give broadcasters the capability to transmit data over the air regardless of whether programs are being broadcast in HDTV or SDTV. This may include content from the Internet, text, Web TV (explained later) or simply information running 'in sync' with TV programs.

Mobile and Cordless Television

Australian engineers have recently chosen the European standards transmission system (DVB) over the American standards transmission system (ATSC). This will enable digital television to be transmitted and received in a mobile environment. Laptop computers could be adapted to receive all of the above features of digital television.

In summary, digital technology gives digital television three combinations of features which analog television cannot:

  • HDTV (high-definition)
  • SDTV (multi-channelling) and
  • Data Transmission.
  • Mobile and Cordless Television.

This offers broadcasters a great amount of flexibility to deliver a colourful mix of video, audio, text and data to the Australian public.

A new Marketplace?

Interested new participants argue that digital television could facilitate a whole new media market generating consumer benefits from the convergence of traditional newspaper and television content.(5) Firstly, their contentions are that a level playing field should be set in place from the outset and secondly, that market mechanisms should be used to allocate spectrum.

This concept of a new marketplace raises issues of definition and interpretation. The traditional definition of 'broadcasting services' was specifically addressed in a report by the Organisation for Economic Co-operation and Development (OECD) titled Communications Outlook 1997, which provides:

A 'broadcasting service' is defined as point-to-multipoint transmission of information by electronic means. Traditional examples include the broadcast of television and radio services from terrestrial towers, as well as satellites and cable television networks. More recently the development of packet switched data networks, such as the Internet, has brought forth a new range of broadcasting services.(6)

In Australia, the Act specifically excludes a service that provides no more than data or no more than text (with or without associated still images). The Act also excludes a service that makes programs available on demand on a point-to-point basis, including a dial-up service.

The OECD report also points out that:

By 1996 the broadcast of audio signals via the Internet had become relatively commonplace and video signals were being offered. A large number of radio stations broadcast programming by traditional means and via the Internet. At the same time a growing number of events are broadcast using video over the Internet technologies. Moreover new services are emerging that use the Internet to broadcast news and information. These Internet based services very much challenge the traditional concept of broadcasting as point-to-multipoint transmission because they may derive information from multiple sources and can be customised to meet the demands of individual users.

While not all Internet broadcasting services yet match the transmission quality of traditional media, development is proceeding apace. It is increasingly clear, as different infrastructure providers upgrade their networks and capabilities, that convergence is not simply a matter of new services being delivered over the public switched telecommunications networks. Indeed one of the major benefits of the Internet has been to engender new ways of thinking about the delivery of service. This point is fundamental to information infrastructure policy for OECD governments.(7)

As a matter of interest, the same report provides that the contribution of terrestrial television broadcasting service revenues to GDP in the OECD area was 0.41 per cent in 1994. Australia was well above this average at 0.58 per cent.

Estimates of OECD television broadcasting revenue (excluding cable television) increased at a growth rate of 6.1 per cent on average from US$75.2 billion in 1992 to US$84.7 billion in 1994.(8) In 1994, the average revenue on television broadcasting services in the OECD area (excluding cable television revenues) was US$84.75 per capita. Australia's figure was again above this at about US$105.00 per capita.(9) The disparity in these figures may be due to a higher ratio of cable television revenues in OECD countries than in Australian. As the survey states, cable television revenues have been excluded.

If a new marketplace were to evolve in Australia, digital television would simply be the conduit to the marketplace-a highly efficient delivery system using the spectrum as the highway of delivery.

John Fairfax Holdings argues that a new marketplace requires a level playing field and lobbied heavily for the spectrum to be auctioned, submitting that:

The networks get free and uncontested access to the digital broadcast spectrum for eight years, Pay-TV operators get protection from the network's muscling in on their turf, and the Government gets some very grateful people in some very influential places. On the other hand, television viewers miss out on the choice that new operators would have brought to the industry. Fairfax, like other telecommunications companies and Internet service providers, had argued for an auction of the digital broadcast spectrum rather than it being given away to the commercial networks. This alternative would have delivered to the Government several billion dollars in revenue up front, plus a steady cash flow each year in the form of annual licence fees.(10)

It would seem that Fairfax considers the possibilities of a new marketplace both lucrative and laced with possibilities. A recent newspaper report states that Fairfax has estimated the opportunity cost of giving the spectrum to the FTAs is from $1 billion to $2 billion.(11) However, auctioning the spectrum must also be considered in the light of Australia's international relations.

International government agencies divide the radio frequency (RF) spectrum into bands for various purposes. In Australia, the Spectrum Management Agency (SMA) allocates these bands into channels for specific purposes which optimise the special characteristics of each frequency band. If RF channels were auctioned, who would control Australia's interests in the international management of the spectrum?(12)

Key Elements of Policy-Broad Reactions

The Bill has received a mixed reaction from industry participants, interested players and others. The main concerns are:

  • the conditional eight year period of free spectrum use to incumbent FTAs
  • the mandatory preference for HDTV
  • that available broadcast spectrum not required by the FTAs will be allocated on a competitive basis for datacasting only
  • that commercial FTAs cannot use the spectrum for multi-channel broadcasting and
  • ABC and SBS funding.

The comments of Mr Jock Given, Director of the Communications Law Centre (University of NSW) are relevant:

So the commercial networks which get frequencies can't use them to provide multi-channel TV services, because that would be competition for the Pay-TV business. And the new players which get frequencies for datacasting can't use them for TV services, because that would be competition for the free-to-air TV business. Policy is made by keeping the warring commercial interests equally unhappy, rather than encouraging the creative exploration of the capabilities of a new and cost efficient technology to provide a flexible and interesting service mix.(13)

This summation might be contrasted with the relatively unrestricted playing field of the electronic commerce / information technology / Internet sector which is moving forward under a mutually convenient and industry co-operative approach.

The conditional eight year period

The spectrum is an extremely valuable public resource. Under the plans outlined by Senator Alston it is to be divided between:

  • the commercial FTAs, the ABC and SBS
  • free of upfront charge
  • for a minimum period of eight years (to protect the capital investment costs of conversion)
  • on condition that all programs be simulcast until the end of the eight year period.

Senator Alston has said:

I'd take a lot of persuading that we should be asking the free-to-air networks, and that includes the national broadcasters, the ABC and SBS, to pay up front when they will clearly have to make a significant capital investment which will not expand the market or expand advertising revenue.(14)

Although Australia is not as 'digitally advanced' as our European equivalents, digital equipment has nevertheless been used throughout the broadcasting industry for some time. As one commentator has recently noted:

In the TV production studios, digital stages have been used for twenty years. When I built a small television studio at the Australian Film, Radio and Television School in 1977 we spent about a quarter of the budget on a digital time-base corrector (TBC) to stop the side-ways shake of lines generated by the early videotape recorders. Today, much better TBCs are built into home camcorders. So there is nothing new in having digital stages in the process of passing the original image through the system to the end viewer. We are just adding one more digital stage in the end-to-end process. We are now about to transmit the signals in digital form.(15)

Further to this, analog equipment is old by world industry standards. Capital expenditure on upgrading plant and equipment, as in any other industry, is due and required. It follows that the 'conversion' to digital may not be as dramatic as some may believe. Full digital format might therefore be considered as a natural and necessary industry progression.

Of course, there is no questioning the fact that the FTAs will have to spend a considerable amount of money to transmit in digital format. The question is, how much will they have to spend? Recent newspaper reports suggest an amount of $740m in capital expenditure.(16) Only when this question is answered is it appropriate to ask whether the cost to full digital transmission equates fair and reasonably with free spectrum use for eight years. The very nature of technology and its rapid advance also questions this eight-year period of free spectrum. As mentioned earlier, the true value of the spectrum is largely unknown and will remain so until the marketplace can be properly tested.

Is there a public interest in locking out competition until 2008, particularly in this rapidly advancing technological climate? Reed Hundt, former Chairman of the US Federal Communications Commission maintains that:

competitive telecommunications services are crucial to economic development. For years, the World Bank took the view that a telecommunications network was essentially a luxury that only developed economies could afford. Today, even the World Bank recognises that telecommunications is not a luxury, but a necessary tool for building a developed economy.(17)

The government's decision protects the capital investment of the FTAs digital transmission start-up costs. There is, nevertheless, a strong argument favouring a competition-based telecommunications legislative regime to be set in place to coincide with the introduction of digital television, an approach which would fall in line with the 'spirit' of the Trade Practices Act 1974. However, to properly consider this argument, the cost of digital transmission implementation must also be considered. Who will, or should, be left with the burden of infrastructure start-up costs? Equitable principles suggest that, to gain the benefit, one must first suffer the burden. Perhaps a flexible licensing and revenue mechanism is more appropriate.

The HDTV mandatory preference

From the start-up date of 1 January 2001, the FTAs will be required to broadcast minimum levels of HDTV, with these levels increasing over time. To receive HDTV directly, consumers will need to purchase a special wide screen high-definition digital television set. The quality is substantially superior to the current analog TV sets. Senator Alston has said:

It will enable the cinema and the concert hall to be transported to the home.

The wide screen is indeed impressive, but will it benefit many Australians? First, most consumers do not have living rooms large enough to fully complement the use of the HDTV wide screen. Indeed, the size of our current television sets is made to fit the average size variants in Australian living rooms. Further, to optimise the use of HDTV, the lights should be turned off, just like in the cinema. Viewing habits indicate that watching television is often only peripheral to general household activity.

Second, the cost of an HDTV set will be 'several thousand dollars' as the Department of Communications, Information Economy and the Arts has stated.(18) Newspapers have reported the cost at around $7500-$10 000 each.(19)

Third, the overseas experience tells us that the HDTV option may encounter significant problems. Reed Hundt, former Chairman of the US Federal Communications Commission (FCC) said in 1995 that:

The FCC's plan was first developed in response to the Japanese industrial policy of promoting of high-definition television. Most observers call Japan's policy a flop. Nevertheless, the FCC has continued to pursue its own high-definition scheme. The idea was that broadcasters would use the new spectrum to transmit just one signal that would be simultaneous and identical to the analog signal, except for its high-resolution, or so called high-definition. This high-resolution picture would presumably be so attractive that Americans would naturally elect to purchase the new high-definition televisions. Then standard TVs would be abandoned and today's analog spectrum could be returned to the public and used for other purposes. Therefore, the scheme was labelled a transition, and the new spectrum was called a second channel.

It turns out that the engineering consortium called the Grand Alliance has invented something more than a prettier picture. Instead it has discovered a genie in a bottle. Maybe you want to broadcast multiple signals of higher resolution than today's signal, or dozens of audio signals, or software packages, or thousands of pages of text, or a pair of very high-resolution movies. The digital genie can grant all of these wishes within the 6MHz(20) that were originally thought capable of transmitting only one program.

The digital genie has made terms 'second channel' and 'high-definition' historical artefacts. Their use constrains our imagination and confines our vision to the idea of a forced transition from analog to digital spectrum.

A high-definition quota is the same thing as a requirement that broadcasters devote a very high percentage of their digital bitstream to just one of the Grand Alliance's 18 formats. It's the digital equivalent of ordering the New York Times to publish just one 22-page section on high-gloss paper instead of the four sections in today's newspapers.(21)

Jock Given, Director of the Communications Law Centre (University of NSW) makes the following point:

This is a very expensive punt. Broadcasters are worried about the hundreds of millions they will have to spend, but the great issue of digital TV is the need for people to spend billions on new TV sets and VCRs to be able to get access to the services. And if you haven't upgraded when the analog signal gets turned off, you get no television.(22)

Blair Levin worked on the digital television proceeding as Chief of Staff for the Chairman of the US Federal Communications Commission. On HDTV, he says:

After the spectrum was awarded in the US, broadcast executives admitted that despite all the talk about high-definition, they weren't sure that's what they were going to do. One exception to the broadcaster confusion is the Public Broadcasting System, which has consistently said they will use the spectrum to multi-cast (multi-channel).(23) The other exception is the Fox Network, which has also consistently said they will multi-cast in standard definition.(24)

After the broadcaster uncertainty was publicised, the US Senate Commerce Committee held a hearing in which the broadcasters uniformly testified that their only goal is transitioning to high-definition television. A poll of broadcasters revealed that by a 52 per cent to 39 per cent margin, broadcasters feel multi-channelling holds more promise than high-definition.(25)

With respect to picture quality, viewers may not gain any benefits whatsoever from watching many current Australian television programs. The content of Network 9's popular Australia's Funniest Home Video Show is shot entirely by home viewers (except studio content) on very poor quality domestic camcorders. The ABC's successful Race Around the World program is shot on new digital camcorders. These camcorders are lightweight, durable, easy to use and very affordable. They are made for a specific market focusing on content rather than quality and cost far less than standard professional cameras. Though the quality is inferior to that of professional cameras, their weight, size and user friendly features allow programs like Race Around the World to be made. The success of these two programs would seem to suggest that content, rather than quality, might be the preferred consumer choice. On the other hand, sport, movies and arts programs would have a greater appeal viewed on HDTV sets. Using the AFL example, a television camera, fitted with a wide-angle HDTV lens, would enable viewers to 'read' the game far more effectively than now. A wider aspect viewing ratio would take in most of the field of play. It follows that the choices available favour a flexible policy option.

When colour television was introduced in Australia in 1975 the cost of a set soon fell to an affordable level for most consumers. Manufacturers were able to reduce prices once worldwide consumer demands grew. Similarly, if HDTV broadcasting were to be a worldwide preference then the cost of a set would no doubt fall from the estimate mentioned earlier in this paper. However, it is important to note that the Government's mandatory HDTV preference policy is unique to Australia.

As a final point, the Federation of Commercial Television Stations Technical Committee (the Committee) has recently reversed its thinking on DTTB standards for Australia. By initially promoting the adoption of a US DTTB standard, the Committee believed this would ensure an early supply of HDTV receiving equipment based on supplies to the US market. However, demonstrations of the European DVB system, held only recently in Australia by members of the European broadcast industry standards consortium, convinced the committee to adopt the European DVB system. A statement released by FACTS on 18 June 1998 hailed the decision as an important milestone in establishing a framework for the introduction of digital broadcasting in 2001. The detailed standards will involve considerable work needed for the completed definition of the system to be customised for Australia.

Datacasting services

Government policy attempts to balance the competing commercial interests of datacasters and FTAs. If FTAs wish to provide datacasting services, they will have to pay.

A new feature of datacasting is the emergence of Web TV. Users do not need a separate personal computer (PC) to gain access to the World Wide Web (the Web). A Web TV set-box is simply incorporated into the TV. In addition to Web access, software companies, in conjunction with broadcasters, are developing information systems to complement traditional forms of programming. Consumers could be fed information running alongside or 'in sync' with television programs. For example, if an Australian Football League (AFL) match coverage were to focus on a particular player, a small icon could be placed on the screen offering a 'player profile' to viewers which, when 'double-clicked' by the viewer, would appear superimposed over the 'live' action in a small box at the corner of the screen. In addition, wildlife documentaries, lifestyle programs, news and current affairs and quiz shows could all use this additional element to supplement their traditional formats. Advertising could also be incorporated into a television program instead of the current 2-3 minute 'blocks' running between program segments.

Over 400 000 Americans currently use Web TV. In this respect, it is appropriate to mention a recent nation-wide study conducted by the Newspaper Advertising Bureau of Australia. According to the survey, Australians are increasingly using the Internet at the expense of the television.(26) With this trend emerging, it may be interesting to consider whether some Australian consumers, fearful of technology, might find Web TV a far less intimidating creature than the PC (as a user device). The cost of the Web TV set-box currently retails for about $US400. Unlike now, consumers could access a version of Web TV without having to purchase a PC.

As a final point, a recent study of 1,000 international chief information officers released by Deloitte & Touche Consulting Group, identified Internet commerce as a growth hot spot. The study predicted a 300 per cent growth in company-to-customer Internet commerce by the end of next year, with more than 50 per cent of businesses expecting to offer such services.(27) For a modest outlay, each and every small store, cottage industry or sole trader in Australia, wherever they may be situated and whatever their speciality, could display their wares to customers of the world.

As mentioned earlier in this paper, Internet service provider OzEmail and other independent online content providers have expressed concern that the FTAs might eventually control future Web TV services. Telstra has argued that if the FTAs wish to enter these areas of datacasting then they should be subject to a competitive bidding process. The government's policy permits the existing FTAs to use spare transmission capacity in this spectrum to provide certain datacasting services, subject to the charging regime in the Datacasting Charge (Imposition) Bill 1998. The amount of this charge will be determined by the ACA, having regard to any directions issued by the Minister. However, before determining a charge, the ACA will be required to provide a report to the Minister on whether the proposed charge meets competitive neutrality principles.

Prohibition on multi-channelling and subscription TV

The Bill prohibits the commercial FTAs from using their digital spectrum for multi-channelling (though they will be authorised by regulations to broadcast programs that are incidental and directly linked to the programs transmitted at that time in analog mode) or subscription television services.

As mentioned earlier, the evidence shows that the FTAs may prefer the multi-channel option over HDTV, or at least the opportunity to use the full flexibility of digital television. Of course, this option would directly compete with Pay-TV operators. Consequently, the Bill effectively shackles the full flexibility and use of digital television. Broadcasters are prevented from offering viewers multi-channel television unless the additional channels are incidental to the program.(28) Therefore, the only benefit to viewers will be a couple of extra camera angles or whatever else may be 'incidental' to the program.

Viewers will have to subscribe to Pay-TV operators to watch multi-channel television, a service that could be provided free if FTAs were allowed to make full use of the spectrum. The government's rationale for this policy would appear to be founded upon protecting the Pay-TV operators' substantial investment in establishing and maintaining their service.

ABC and SBS funding

Both national broadcasters will offer viewers the full benefit of digital television, provided funding is available. Program makers in ABC regional centres around Australia have begun to experiment with lightweight digital cameras (similar to those used for Race Around the World), extending their range from radio to television content gathering. ABC Managing Director Brian Johns has said:

As the ABC gains digital capability, we will provide more local programming for television and online services. We will be able to do this because digital lifts the constraints of a single television network.

We plan to run different program packages at different times of the day-catering to diverse audience interests including continuous news and current affairs programming, special events coverage, education programming.

The ABC will look at time shifting programming so that audiences have more than one opportunity to watch particular segments. We could repackage existing programming in the arts, drama, sport and probably children's programming as well.

It is the biggest change in broadcasting since the introduction of television more than 40 years ago, and the ABC must not be handicapped.

It is vital that the government provides additional funding for the ABC now.(29)

As interested players have argued from the outset of this debate, a competitive spectrum allocation process would provide a substantial injection of money into the Consolidated Revenue Fund (CRF). National broadcasters could well benefit from a policy of this nature. Funding could be provided from rents received, indirectly via the CRF, for the digital conversion and ongoing costs of the ABC and SBS-thereby dispensing with the need to place the added and ongoing burden on the taxpayer.(30)

Concluding Comments

Market power in the media creates added regulatory issues. The power of the media, and television in particular, has been properly realised for many decades, and at least since the 1960 Kennedy - Nixon debate.(31) Digital television will soon focus the power, influence and importance of the media in all our lives. Questions of fair access and appropriate controls are necessarily at the forefront of this debate.

Turning to the point of law, the doctrine of the public trusteeship is relevant. Under the codes of Roman law, things common to mankind by the law of nature, are the air, running water, the sea, and consequently the shores of the sea. The English common law evolved the concept of the public trust under which the sovereign holds public property as trustee for the benefit of the people.

In Australia, the doctrine has been raised in issues involving private commercial usage of public things. In Woollahra Municipal Council v Minister for Environment,(32) Kirby P (now a member of the High Court of Australia) referring to the doctrine of the public trustee said that:

it is this principle which restrains the donee of a statutory power from exercising that power for a purpose, which is not properly classified as being for the attainment of the objects for which the statutory power was conferred.(33)

From Justice Kirby's judgement in the Woollahra case, it would seem to follow that the purpose of the Television Broadcasting Services (Digital Conversion) Bill 1998, namely the conversion from analog to digital television, must be attained with reference to and in accordance with the objects of the Broadcasting Services ACT 1992.(34) Alternatively, does the government's approach ensure that all Australians are able to enjoy the benefits of digital free-to-air broadcasting as we move into the next century?(35)

The issues are complex. How does the Government regulate, under the current legislative regime, and at the same time optimise the use of the spectrum when the true commercial value of digital television is probably yet unknown? All this whilst discharging its trusteeship of a very valuable and limited public resource.

Though it is impossible to currently place an economic value on the spectrum, it is nevertheless desirable to attempt to do so. As a starting point, it is not unreasonable to suggest that 80 per cent of the value of a commercial FTA company is attributable to the ownership of a broadcast licence.(36)

As a final point, the options available to the Government should reflect the technology itself-they must be innovative and flexible. Consideration must be given to whether the objects of the Act cover the whole range of digital broadcasting services which may become available to the public, and whether the current legislative regime is appropriate for the introduction of digital television in Australia. Once a 'future proof' legislative regime is in place, policy can be determined by considering each and every unique element of digital television-whether it be HDTV, multi-channelling, datacasting or any other new and innovative service which may be offered to the Australian public. The options can best be explored by a combination of fact, law, economics, the 'overseas experience' and independent expert opinion.

Digital television has the potential to focus communications and the converging media bringing together the vast range of related technologies via the humble television set. The ultimate beneficiaries of the technological revolution, the Australian public, could well claim that the spectrum is held in trust for the health, recreation, and enjoyment and for the entertainment, education and information of the population.


  1. Dr Kim Jackson, Television Services (Digital Conversion) Bill 1998, Bills Digest no. 178, Department of the Parliamentary Library, 1997-98.

  2. Australian Broadcasting Authority, Annual Report 1996-97.

  3. Broadcasting Services Act 1992, section 3 (in part).

  4. Australian Broadcasting Authority Specialist Group, Digital Terrestrial Television Broadcasting in Australia: Final Report, Sydney, January 1997, p. 85.

  5. New Paths For Growth: Equal access to Australia's digital spectrum, John Fairfax Limited, March 1998.

  6. Communications Outlook 1997, Vol. 1, Chapter 5, Broadcasting Services, p. 67.

  7. Ibid.

  8. Ibid., p. 82.

  9. Ibid.

  10. Editorial, Sydney Morning Herald 27 March 1998.

  11. Steve Lewis and Finola Burke, 'Calls for Digital TV Slowdown', Australian Financial Review (Weekend Edition), 14-15 June 1998, p. 7.

  12. The Spectrum Management Agency is now part of the Australian Communications Authority.

  13. Jock Given, Director, Communications Law Centre, University of NSW, 'Taking a Punt with TV', Sydney Morning Herald, 26 March 1998, p. 19.

  14. Finola Burke, 'A Lot of Digital Agitation', Australian Financial Review, 17 December 1997, p. 14.

  15. Stewart Fist, 'So TV will be Digital', The Australian, February 1997.

  16. Steve Lewis, 'Network worry over digital TV', Australian Financial Review, 2 June 1998, p. 3.
  17. 'Everyone's A Winner', speech by Reed Hundt, Chairman, U.S. Federal Communications Commission, Centre for Strategic and International Studies Forum on Global Telecommunications Liberalisation: Who Will Benefit?, Washington D.C., 17 December 1996.

  18. Digital Broadcasting-Q & A, Department of Communications, Information Economy and the Arts, released on 24 March 1998.

  19. The Weekend Australian, 18-19 April 1998, p. 3.

  20. 7 MHz in Australia.

  21. Digital TV: We Can Work It Out, speech by Reed Hundt Chairman, US Federal Communications Commission, International Radio and Television Society, New York, 21 November 1995.

  22. Jock Given, Director, Communications Law Centre, University of NSW, 'Taking a Punt with TV', Sydney Morning Herald, 26 March 1998, p. 19.

  23. 'PBS Prefers Multi-casting', New York Times, 20 October 1997.

  24. Report by Blair Levin, former Chief of Staff, U.S. Federal Communications Commission, commissioned by John Fairfax Holdings Pty Ltd, 4 March 1998.

  25. Broadcast and Cable Magazine, 12 January 1998, p. 25.

  26. Catriona Jackson, 'Australians swapping TV screen for Internet: Study', The Canberra Times, 16 May 1998, p. 5.

  27. Beverley Head, 'E-Commerce a $16trn earner', Australian Financial Review, 26 May 1998, p. 5.

  28. Using the AFL football example, 'incidental' to the program means 3 or 4 isolated camera angles in addition to the main transmission output.

  29. 'ABC brings digital benefits to all Australians', Media release, Brian Johns, Managing Director, Australian Broadcasting Corporation, 10 March 1998.

  30. Section 81 of the Constitution provides that all revenues or moneys raised or received by the Executive Government shall form one Consolidated Revenue Fund.

  31. Television studio lights caused beads of sweat to run from Nixon's forehead, giving an appearance of 'nervousness under pressure'. A poll of television viewers clearly announced Kennedy the winner. Interestingly, a similar poll conducted with radio listeners gave the debate to Nixon.

  32. Woollahra Municipal Council v Minister for Environment (1991) 23 NSWLR 710.

  33. Ibid. at p. 726.

  34. See page 3.

  35. Hon. Warwick Smith (Bass - Minister for Family Services) Second Reading Speech, Television Broadcasting Services (Digital Conversion) Bill 1998, House of Representatives, Parliamentary Debates, 8 April 1998.

  36. Comments of Michael Gordon Smith, Member, ABA, Digital Television Policy Seminar, web site at:

Appendix 1: Technical Matters

The nature of the VHF and UHF frequency bands makes them an ideal segment of the spectrum for broadcasting of terrestrial television. Initially VHF, and later UHF, bands were employed internationally for TV. TV was not possible before engineers learned how to transmit wide band signals in these segments of the RF spectrum.

Before mass production of TV sets could begin, standards had to be set for the TV channels-a sub-set of international spectrum planning. The USA and Japan divided their allocated TV spectrum bands into 6MHz channels (legacy from 60Hz power supplies), Europe chose 7MHz for VHF and 8MHz for UHF. The 8 MHz for UHF was to allow for improved pictures in the UHF bands.

With these RF channel standards set world wide, specific electronic equipment manufacturers produced the tuners for TV sets to be used in specific regions. The tuners became a specialised component for the industry.

With analogue TV, both NTSC and PAL requires a gap between each channel to avoid adjacent channel interference. These gaps (referred to as 'guard channels') are the same band width as the channels used for TV broadcasting. The significance of engineering for digital broadcasting is that these guard channels are available to start digital terrestrial television. Digital television still uses RF channels and the same bandwidth as analogue television.

Each RF digital television channel carries a digital 'transport stream' that is capable of carrying one or more program (TV or Radio) and data services. The special RF modulation schemes engineered to carry digital television do not interfere with the existing adjacent analogue channels. The digital signal carrier is still an RF signal designed to operate in existing TV channels.

The limit for the US bit rate system (8 VSB RF carrier) of each transport stream is fixed at 19.3 Mbits per second. The limit for the European flexible bit rate system (COFDM RF carrier) is around 30 Mbits per second in ideal conditions in the Australian 7MHz channels. The maximum capacity for COFDM is dependent on environmental conditions that cause variations in signal quality-trees, rain, snow etc.

In addition, COFDM will allow return path interactive services to source transmissions by RF.

Each transport stream will transport one or more program and data services-up to the channel limit. Wide band width services, such as HDTV, fill the channel capacity. Internet and teletext services are very low data rates, allowing many thousands of such services to be carried. Therefore, we should clearly distinguish between a 'Digital RF Channel', a 'transport stream', a 'program' or 'data' service.



'Analog'-pertaining to the use of physical quantities (such as voltages etc.) as analogues to the variables in a mathematical problem, as in an analog computer or pertaining to any device which represents a variable by a continuously moving or varying entity as a clock, the hands of which move to represent time, or a VU meter, the needle of which moves to represent varying amplifier output energy (Macquarie Dictionary).

Closed captioning

This is a form of datacasting currently used during the broadcast of news, current affairs and other programs. Closed captioning enables the hearing-impaired to read the dialogue-in text form-of the television program. The text usually appears at the bottom of the program and can be viewed via a decoder. Closed captioning looks like sub-titles on foreign language programs.


Data is an item of information used by a computer for the purpose of calculation, manipulation, or storage. Data casting is transmission of this information. An example of datacasting is the transmission of the Internet.


'Digital'-of or pertaining to units of information that exist in two states only, on and off, as pulses (opposed to analog) or pertaining to a device which represents a variable as a series of digits, as a digital watch which shows passing time by a series of changing numbers, or a digital tuner which similarly shows the frequencies to which it is being tuned (Macquarie Dictionary).


High-definition television pictures, when compared with normal standard definition pictures on our current television sets, are sharp, non-grainy, crystal clear and superior in quality and definition. HDTV comes in a 'wide-screen' 16 x 9 format. The current analog format is 4 x 3.


A 'hertz' is the basic legal limit for measuring frequency. It is the frequency of a regularly recurrent phenomenon that repeats itself once each second. Multitudes and fractions of a hertz, such as megahertz (MHz) and kilohertz (KHz), are also legal units of measurement of frequency: National Measurement Regulations 1961 (Cwlth) regulations 22(1), 23, Schedule 8.


A multi-channel broadcast is one where a number of traditional television programs are broadcast at the same time. Digital technology makes this possible by compressing the signal to fit more 'channels' or 'programs' into the same corridor of broadcast spectrum used for current television broadcasting.


Transmitting both analog and digital television simultaneously so that viewers can receive the same program with a current analog TV set or a digital TV set.


In radio communications law, 'spectrum' is defined as the range of frequencies within which radiocommunications are capable of being made: Radiocommunications Act 1992 (Cwlth) section 5. A 'spectrum' can be likened to a corridor of radiofrequencies. Only those frequencies within the corridor are capable of carrying television signals. The corridor is thereby divided up so that each commercial broadcaster (Networks 7, 9 and 10) and the national broadcasters (ABC and SBS) each have their sub-corridor (bandwidth) within the radiocommunications spectrum. The width of the spectrum is limited and can only carry a finite number of bandwidths. Spectrum is therefore a limited public resource.


Broadcast transmission is the carrying of broadcast information-traditionally pictures and sound-through the air from broadcaster to viewer.


In radiocommunications law, anything designed or intended for radio emission, or any other thing, irrespective or its use or function or the purpose of its design, that is capable of radio emission: Radiocommunications Act 1992 (Cwlth) section 8(2).

Transmitter licence

One of the two types of apparatus licence, the other type being a receiver licence. A transmitter licence authorises the licensee to operate specified radiocommunications transmitters. A transmitter licence is subject to conditions additional to the general conditions of an apparatus licence. The conditions include a requirement that the licensee not operate the transmitter for a purpose inconsistent with a purpose specified in the appropriate frequency band plan.