Chapter 1 - Overview
The Broadcasting Services Amendment (Digital
Television and Datacasting) Bill 2000 was referred to the Senate
Environment, Communications, Information Technology and the Arts Legislation
Committee on 10 May 2000 by the
Senate (Selection of Bills Committee Report No 6 of 2000). The Committee was
required to report to the Senate by 8 June 2000.
The purpose of the Broadcasting Services
Amendment (Digital Television and Datacasting) Bill 2000 amends the Broadcasting
Services Act 1992 (the BSA) and the Radiocommunications Act 1992 to make
arrangements for the introduction of digital television in Australia and to
implement a new regulatory regime for the provision of datacasting services.
The changes follow various reviews required to be conducted by Clause 59
of Schedule 4 of the Broadcasting Services Act 1992 (BSA). The
Explanatory Memorandum to the Bill deals in detail with the proposed amendments.
The Committee’s Inquiry
The Committee advertised its inquiry in The
Week-end Australian and The Australian Financial Review and on the
Internet. The Committee also wrote to a number of organisations with an
interest in television and with a potential interest in datacasting, inviting
them to make submissions. The Committee received 38 submissions and a number of
supplementary submissions. A list of the submissions received is at Appendix 1.
The Committee held two days of public hearings at Parliament House in Canberra on Wednesday 31 May 2000 and Thursday 1 June 2000 and heard from 60 witnesses.
A list of the witnesses who appeared before the Committee is at Appendix 2.
Overview of major issues
The Committee received 38 submissions, 7 of
which came from private individuals and 1 from the Government of Western
Australia. The majority of submissions came from organisations involved in the
television broadcasting industry and from the potential datacasters. Three
submissions were exclusively concerned with captioning issues and another 5
(from commercial free-to-air television broadcasters) requested minor
amendments to the captioning requirements on the basis of cost. Most of the
submissions from individuals expressed concern that the legislation might
result in further restrictions in consumer choices in access to information in the
While the Federation of Australian Commercial
Television Stations (FACTS) and the regional TV operators, Prime, Southern
Cross, Ten Network and WIN were supportive of the broad thrust of the Bill, the majority of submissions sought
considerable amendments to the legislation relating to three main issues:
mandating of HDTV (and the allocation of free spectrum to the free-to-air
(FTA) television stations consequent upon that decision);
definition of datacasting (and the consequent restrictions on services that
datacasters can provide); and
issue of multichannelling.
Other issues of concern raised in submissions
and at the Committee’s public hearings were:
- the powers given to the Australian Broadcasting Authority under
- the timing of the various reviews required under the Bill;
the determination of captioning standards to assist the hearing
impaired in gaining access to television programs;
the issue of Australian content for digital television and
- the regulation of standards (for example, an audio standard or
for set-top boxes);
- the ability for ABC and SBS to use digital spectrum to simulcast
their radio services to those regions that are not currently able to receive
those services; and
- the lack of digital spectrum provision to community broadcasters.
A number of submissions referred to the
timeframe for the passage of this Bill. With few exceptions however, there was strong support among
witnesses to the Committee’s inquiry for Australian television to convert to
digital mode within the next year. Those who did not support the move (such as
the Australian Consumers Association (ACA)) did not object to digital
television per se. Rather, the ACA argued that a delay would result in the
development of a better policy approach and work in favour of the Australian
The issue of conversion to digital television
has been canvassed at length in various reports over the last eighteen months.
In this report the Committee will focus only on those areas of the Bill that, according to submissions and
witnesses to this inquiry, are causing the most concern amongst the
stakeholders in the television and datacasting industries.
Under section 37 of the Television
Broadcasting Services (Digital Conversion) Act 1998, Australia’s commercial FTA television
stations and the two national broadcasters are required to commence
transmission in digital High Definition Television (HDTV) format in State
capital cities on 1 January 2001. Each free-to-air television station (the commercial stations and
the two national broadcasters) were “loaned” 7 MHz of spectrum free of charge
to enable them to broadcast in HDTV while maintaining transmission of their
analog signal. HDTV was the only digital standard acceptable under the Act but
a minimum quota for HDTV was yet to be determined.
On 21 December 1999, the Minister for
Communications, Information Technology and the Arts announced the Government’s
decisions in relation to digital television. The Bill before the Committee, the
Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000
is the legislative framework through which the Government seeks to implement
those policy decisions.
The current Bill provides for digital
transmission to be in both HDTV and Standard Definition Television (SDTV)
formats with the requirement that a minimum of 20 hours per week of HDTV be
broadcast after 1 January 2003 by those capital city FTA stations that would
have begun their first digital transmission on 1 January 2001. (The HDTV quota
requirements for the national broadcasters are slightly different and
commercial FTA regional stations are required to meet the minimum 20 hours per
week quota two years after their first HDTV broadcast). Since the stations need
to simulcast their analog transmission at all times, there will be times after
1 January 2001 when the free-to-air television stations will be transmitting in
3 modes HDTV, SDTV and analog (triplecast).
In evidence to the Committee, FACTS was strongly
supportive of HDTV as a driver for encouraging the take-up of digital
High definition will be very significant in promoting digital
television, although we would not expect large numbers of high definition sets
to be sold in the very early years ...
... We think HDTV will be very important early on to promote
digital television generally. We think, without HDTV, we would have a huge
uphill battle to get anyone into an electrical goods store. HDTV is going to be
Other free-to-air commercial TV broadcasters who appeared
before the Committee endorsed FACTS’ submission.
However, the majority of submissions and
witnesses to the Committee expressed grave doubts about the ability of HDTV to
attract enough support to make the move to digital television successful. The
representatives of the Pay TV industry were particularly confident that HDTV
would fail in the Australian marketplace as it has failed overseas:
In the USA today HDTV is a bit of a joke ... The consumers of
America, as has been evidenced here in previous witnesses’ information, just
have not taken it up. It is far too expensive and it is far too expensive to
make. It is in fact a dud.
The UK rejected it altogether. We find that the multiplex model
was favoured and HDTV was rejected. We find that Europe has no plans whatsoever
for HDTV. We heard yesterday through FACTS that Japan has put HDTV on hold. So
what are we saying here? Are we saying that HDTV’s last bastion in the world is
going to be here in Australia? Yet at yesterday’s committee hearing I heard
people say, ‘No, there won’t be production here in Australia, it is too
expensive. No, there won’t be manufacture, nobody is interested ...
... I think there is an overwhelming amount of evidence worldwide
that HDTV is a non-goer.
Those submissions and witnesses who told the
Committee that they opposed HDTV because it was bound to fail in the Australian
market fell into three categories:
- those who did so because of the high cost of the
equipment to the consumer;
- those who believed that only a wide range of new
services would encourage the consumer to spend more to switch to digital; and
- those whose main concern was with the 7MHz of
spectrum that has been freely loaned to the free-to-air television stations to
enable them to broadcast in HDTV.
Mr Encel, a television retailer told the
Committee that HDTV would not be successful with Australian consumers and that
it should “simply [be] dropped from the current Triplecast model”:
SDTV will provide nearly all the enhancements that are currently
being promoted in the media, such as datacasting, home shopping, interactivity,
Internet access etc. From my company’s experience, I can advise that “cinema
quality” television pictures are not high on most people’s TV requirements.
Most people would like them but few would pay the premium required. 
According to Mr Encel, the majority of
Australian consumers buy “$500 to $800 TVs”
while, based on the American experience, HDTV sets would cost considerably more
(Mr Encel referred to a figure of $20,000).
Most Australian consumers would look to use a set-top box to receive digital
television and evidence to the Committee suggested that the cost of a set-top
box would, in the current market be around $1000. In relation to HDTV, set-top
boxes have the added disadvantage that, while they enable the user to receive
the digital signal, the High Definition quality of the picture is not obtained.
Only a HDTV set can perform that function.
In response to Mr Encel’s claims about the cost
of HDTV sets, FACTS’s Mr Branigan told the Committee:
What do we have to go on in terms of what HDTV equipment will
retail for in this country? Very little. The only manufacturer that I can
recall providing an estimate of what its equipment would cost is Sony, which told
the government late last night that its first HDTV offering here would cost, I
think, $8,000 ...
We have talked to a number of Chinese manufacturers who are
talking about something like half that price. Whether that turns out to be
achievable or not is anyone’s guess.
The Committee was of the view that given that
digital technology is in its infancy, it would be unwise to close off any
options. The Committee notes that there are provisions in the Bill for various
reviews that will provide opportunities for reassessment of HDTV and SDTV
developments. The experience of the past five years has demonstrated that
technological change is occurring very rapidly in this area. The pace of change
in the future could see the resolution of many of the current issues.
Diversity of program choice and new services
In evidence to the Committee, the Deputy
Chairman of the Productivity Commission’s Broadcasting Inquiry stated:
... on high definition, the commission’s position is that high
definition television is most unlikely to be a driver of uptake; new services
and new players are much more likely to be so.
This position was supported by a number of other
witnesses including the representatives of television manufacturer, Philips.
While supporting the move to digital television, they argued against HDTV and
suggested that new and exciting offerings (such as interactivity) and more
diverse content through multichannelling would be a greater incentive than
improved picture and sound quality to encourage large numbers of consumers to
move to digital television. Commenting on Mr Encel’s evidence to the Committee,
the General Manager of Philips Sound and Vision said:
I think in principle we would share the view that there may not
be enough benefit coming down the line in the near term of a digital nature to
motivate the consumer to invest in new televisions ...
The dilemma that we have struggled with ourselves is that great
picture, great sound in itself may not be the motivator that we think it is.
Our experience internationally, looking at other markets, would suggest that
content, interactivity, is probably, in true terms, a benefit that is not
received today that consumers would find motivating.
The Committee notes that submissions and
witnesses from the television industry and potential datacasters were unanimous
in the view that the offer of new services and diversified content would be the
greatest driver of digital take up. FACTS told the Committee:
Program enhancements and datacasting will be essential other
services to offer viewers in these very early years.
In arguing for a more flexible definition of
datacasting, Telstra put forward the view that:
... datacasting will assist the driving of digital take-up.
Through the provision of new interactive services, it has the potential to
drive digital TV. We believe that, without the driving of datacasting, the
take-up of digital will take decades.
The ABC’s Managing Director arguing for the ABC
to be allowed to multichannel said:
... we think the two channels operated by the ABC could improve
the digital offering and, assuming agreement could be reached for carriage,
would make a more attractive proposition in the market for the customer to want
to take up digital. 
His view was supported by SBS’s Policy Manager,
Ms Christine Sharp:
SBS’s view is that content is of primary interest to audiences
and that, unless we can offer significantly different content, consumers will
not perceive that they are getting very much from digital television. The
prospect of improved technical quality alone will not be a driver for
The issues surrounding the ability for the ABC
and SBS to multichannel are dealt with in Chapter 3 of this report.
Access to spectrum
Of overwhelming concern to witnesses from the
Pay TV industry and from the potential datacasters is the issue of access to
scarce spectrum (especially while the analog spectrum is still being used). At
the heart of this argument is the fact that it is possible to convert to
digital via SDTV by using 2 MHz of spectrum. Since those groups are convinced
that HDTV will fail and have a limited lifespan, they see each FTA station
tying up 5 MHz of extra spectrum capacity that they have obtained free of
charge. In its submission to the Committee’s inquiry, Cable and Wireless Optus
There is no policy justification for the FTAs retaining 7 MHz of
spectrum at no charge in light of the “downgrading” of HDTV in the digital
television regulatory scheme. It is not possible to defend the amendment as an
economic and efficient use of the spectrum.
Accordingly, this provision should be deleted from the Amendment
Bill and the allocation of 7MHz of spectrum to FTAs for this purpose should be
reviewed. In particular, consideration should be given to the returning of at
least some of the excess spectrum to the Federal Government where it can be the
subject of a competitive auction.
In arguing for the proposed review of HDTV
to be brought forward, ASTRA also pointed out that dropping HDTV would “free
up” valuable spectrum:
If a review were brought forward and HDTV was canned, did not go
ahead, and people realised that it was not the way to go for the digital
future, then five-sevenths of the spectrum, I presume, would return to the
government for public auction. We took the liberty of doing some research on
what that spectrum is worth ... Our conservative—and I underline ‘conservative’—figures
for the five capital cities only put a value on that spectrum of in excess of
$2 billion at current market rates.
In putting forward the case for freeing up
spectrum for new players, the Productivity Commission’s Professor Snape argued
for a certain switch-off date for analog transmissions:
To get anywhere near the full benefits from the new
technologies, it is essential to ensure the rapid switchoff of analog
television to free up the spectrum. With the vision of the potential benefits,
the commission asked how to drive the take-up of digital television. A certain
switch-off date is a key element. Incidentally, the existing legislation in the
Act does not provide for a certain switch-off. The commission has recommended
the same switch-off date for cities and the country, so as not to disadvantage
rural and remote areas.
Although coming from a different point of view,
ntl also was concerned with the issue of access to spectrum for new players. It
told the Committee:
... the physical availability of spectrum for new datacasting
services is as important to the future of this industry as the definition of
services for datacasting itself ... it is surely critical that all spectrum
actually be utilised for new services—in other words, a ‘use it or lose it’ condition
for datacasting licences that ensures spectrum hoarding is not permitted. We
understand precedence for this exists in the Act—for example, the narrowcasting
provisions—and in the bill itself—for example, the solus markets.
In a supplementary submission to the Committee,
ntl made a strong case for the Bill to be amended to clarify whether the ABA
has the power to clear spectrum. ntl gave examples of the role it played in
assisting with spectrum clearing in the UK. In view of the fact that only one
extra 7MHz datacasting channel appears to be available (using conventional
tools) in the Sydney market, the Committee sees merit in ntl’s suggestion that
the applicability of Single Frequency Networks (SFNs) be considered in
Australia. The Committee notes that ntl’s view is that such an approach could
yield at least three 7MHz channels in the Sydney market and could have similar
On a further matter related to spectrum
clearing, ntl urged the adoption of a national clearance of the DTTB
transmission plan similar to the one undertaken in the UK where the costs
involved in carrying out the necessary changes to eliminate interference were
met by the incoming multiplex licensee (the ‘polluter pays’ principle). The Committee sees merit in
this approach and believes that its applicability to potential datacasters in
the Australia context should be investigated.
The Committee recommends that the Australian Broadcasting
Authority be given the power to rationalise and clear spectrum particularly for
the creation of datacasting channels.
Spectrum provision for community broadcasters
In its submission to the Committee’s inquiry,
the Community Broadcasting Association called for Clause 24, Division 3, of
Schedule 6 to the Bill to be amended to put an end to the current uncertainty
over the availability of digital spectrum for a standard definition television
Community broadcasters are equally concerned
about the future of the sixth (analog) channel which they currently have access
to until 30 June 2001. The Government of Western Australia supported their call
for this issue to be clarified:
Community broadcasters operate from the invidious position of
realising that the scarce radio frequency spectrum could ultimately be
reassigned to a future fourth commercial network. The consequences of this
would be unfortunate as the community sector promotes diversity and content of
local significance which is unlikely to be supported by commercial stations.
The proposed legislation has not assured that the sixth
free-to-air channel will remain available as a community/education channel with
local focus beyond the end of the parallel transmission period.
The Committee notes that in its submission to
this inquiry and to the Government review on datacasting, ntl proposed that:
The first allocated datacasting transmitter licence include a
“must carry” SDTV provision for community broadcasters.
Such an approach would put an end to the current uncertainty
over the future of community broadcasters’ access to spectrum. At the same time
it would ensure that available spectrum is used efficiently.
Finally on the issue of spectrum availability,
the College of Biomedical Engineers expressed its concern about the possibility
of both the current analog channels 39 and 40 being allocated to broadcasting,
narrowcasting and datacasting within the same geographic region. The College
argued that such a situation could pose problems for patient safety and called
for some spectrum protection for this reason. In particular it wants spectrum
to be made available for the operation of medical telemetry systems in
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