Chapter 2 - Datacasting
A number of submissions were concerned about the
Bill’s provisions relating to datacasting. The main concerns were from parties
who would like to provide datacasting services through digital terrestrial
transmission but who believe that the definition of datacasting unduly
restricts what they can offer while other provisions in the Bill give unfair
advantage to free-to-air broadcasters who may wish to offer datacasting
services on part of their free allocation of spectrum
Some submissions from potential datacasters as
well as evidence provided to the Committee suggest that if amendments to the
Bill are not made, the commercial viability of the datacasting industry may be
called into question.
Definition of datacasting
The Bill defines a datacasting service as:
A service that delivers content:
- whether in the form of text; or
- whether in the form of data; or
- whether in the form of speech, music or other
- whether in the form of visual images (animated
or otherwise); or
- whether in any other form; or
- whether in any combination of forms;
to persons having equipment appropriate for receiving that
content, where the delivery of the service uses the broadcasting services
The definition is wide enough to also include
the delivery of radio and television programs. However, the Bill places
restrictions on the provision of audio content by datacasters so that they do
not become de facto radio broadcasters.
The Bill also introduces a regulatory regime for
datacasting, the primary objective of which is to clearly distinguish between
datacasting and broadcasting services. The regime will be implemented through a
new Schedule 6 to the Broadcasting Services Act 1992.
The focus of the regulatory approach is on the
kinds or ‘genres’ of programs and services which datacasters are allowed to
provide. The Bill introduces two categories of restricted programs – Category A
and Category B.
Under the genre conditions, Category A
television programs are regarded as free-to-air television and include drama,
current affairs, sporting programs, documentary and comedy programs.
Datacasters will not be permitted to offer Category A programs on their
services, except for incomplete extracts of ten minutes or less.
Category B television programs can be provided
by datacasters on a limited basis in recognition of the fact that these
programs, such as short news, weather overview or financial or business
information bulletins, are likely to enhance datacasting services and be
attractive to audiences. The bulletins must be ten minutes or less but can only
be updated every half hour.
Datacasters will be able to provide a range of
other services including information-only programs, educational programs, and
foreign language news bulletins which are specifically defined in the Bill.
Other services include Parliamentary broadcasts, ordinary electronic mail,
interactive computer games and Internet content.
Datacasters will need to obtain a datacasting
content licence from the Australian Broadcasting Authority (ABA) and a
datacasting transmitter licence from the Australian Communications Authority
(ACA). The genre restrictions and audio content conditions will be datacasting
content licence conditions.
Industry views on the proposed definition
The Federation of Commercial Television Stations
(FACTS), in both its submission to the Inquiry and in evidence before the
Committee, generally supported the thrust of the proposed changes to the Bill
in relation to datacasting. FACTS stated that:
... the new datacasting rules are essential to maintain the
legislatively-required separation of broadcasting and datacasting. They will
allow a datacaster scope to provide a wide range of services. The review of
datacasting schedules for 2003 will allow any obvious problems to be addressed at
an early stage in the development of datacasting services.
Other submissions and witnesses appearing before
the Committee were, however, very critical of the proposed changes to the Bill
as they consider it moves away substantially from the previous policy framework
and is anti-competitive in that it gives much broader freedom to FTAs to
introduce new services on their free spectrum while at the same time severely
constraining what new datacasters can offer.
News Limited in its submission commented:
The Bill expands what free-to-air operators can do with their
spectrum, and severely limits what datacasters can do. In combination, this
will have the effect of:
- putting free-to-air operators beyond competition; and
- retarding the social benefits to Australia of datacasting.
News Limited argues that the Bill should be
rejected in its entirety because it does not provide a coherent framework in
which the Australian media industry could be fostered. It believes that the
Government should be permitting competition in the media industry, by removing
media-specific legislation. Competition will lead to diversity of opinion and
content but what is currently proposed will bring about more of the same
without innovation, diversity or fresh voices.
Submissions and evidence to the Committee from
Fairfax, Telstra and Optus provide more specific comment on problems with the
proposed datacasting definition. They believe the definition is too narrow,
unduly prescriptive and inflexible. As well it is confusing and is likely to promote
uncertainty for datacasting operators. The submission from the Australian
Information Industry Association (AIIA) also supports this contention. These
groups advocate that datacasting be as broadly defined as possible so that it
promotes innovation and diversity.
When asked by the Committee to define
datacasting in terms of its important elements, Ms van Beelen, from Telstra,
We have always maintained that datacasting should be defined as
broadly as possible because it is a new industry that we are trying to create
here. The objects of the Act are to actually be amended to say that part of the
purpose of the Act is to facilitate datacasting, so we need a definition that
helps the industry to emerge. There are problems with a lot of the suggested
ways of doing it. It did seem to us that you need some certainty about what
datacasting is, so there are a lot of options that can be ruled out because
they would involve a case by case analysis. The definition in the current
legislation is not all that bad; it is basically anything that is not
broadcasting. If a datacaster was under threat of falling foul of the law and
the consequences that that entailed if they did do broadcasting, it may be that
datacasting could be that broadly defined. I just see no reason for it to be as
constrained as it is.
Ms van Beelen advised the Committee that
Telstra’s business case, based on the legislation as currently proposed,
suggests that datacasting is extremely marginal, if viable at all.
On being questioned by the Committee in terms of
what Telstra would want to do but can’t under the proposed legislation, Mr
Willis advised that:
If we datacast Internet product, I think it would be very
difficult to keep it within the genres that are described in the datacasting
bill, so I think it is unworkable.
Optus also gave evidence to the Committee that
it would be able to transmit very little programming as a potential datacaster
if the legislation stayed in its current form.
Fairfax, in its submission, suggests that the
distinction between broadcasting and datacasting should not be based on the
type of content, but that what distinguishes the two is that datacasting is
interactive. Fairfax maintains that there is a lack of clarity with the genre
definitions in areas such as the distinction between genres (eg news and
current affairs), foreign language news services which appear to prevent
English subtitles and the requirement for datacasting to avoid being
entertaining but still attract audiences. Fairfax also argues for a more
flexible definition of information-only programs that allows for a combination
of fact, opinion and advice.
In evidence before the Committee, Fairfax made
reference to the Optus submission which suggested that a further way to
distinguish between broadcasting and datacasting is that broadcasting is live
and everyone gets it at the same time. Stored information could, therefore,
also be a distinguishing factor.
The submission from the Australian Consumers
Association suggests defining broadcasting rather than datacasting or,
alternatively, defining a television program. Datacasting would then be defined
as whatever broadcasting is not. A suggested definition of broadcasting is:
A non-interactive continuous stream of primarily audio-visual
material transmitted on a sustained and scheduled basis occupying significant
blocks of time each day, to many consumers simultaneously.
This could also constitute a definition of a
television program. The Bill could then specify that datacasting may not place
such programs in an uninterrupted and linear stream without interactivity.
The interactivity requirement for datacasting
would only be for television programming, which would not stop datacasters
offering a wide range of other services, but it would stop them evolving into
commercial television broadcasting.
The Committee concluded that the genre
classification of datacasting provides an easily understood basis for defining
Datacasting educational programs
In relation to the restrictions on the types of
programs permitted under the datacasting rules, a number of submissions argued
strongly for amendments to Clause 3 (educational programs) of Schedule 6 to the
Bill to broaden the definition of “educational programs”. Referring to its
“learning for life” proposals to be allowed under the datacasting rules, the
Rather than being conventional vocational or academic learning,
the ABC’s educational plans are for interactive, practical, accessible programs
for busy people dealing with rapid change, complexity and stress in their
Fairfax also pointed out that the restrictions
were such that no educational programs of any interest could be offered by
I think another issue we are particularly concerned about ... is
the way the definition of education has been done. In our view, if the
programming requires that essentially it be a course of study, then children
under 12 do not do courses of study. You do not link things to courses of
study. It seems to us that that means there is going to be very few children’s
educational programs on datacasting. Also there is probably going to be very
few open university type programs on datacasting, unless you can link them to
an institution or something like that providing a course of study. We think
there is a real risk in the way it is presently drafted. For example, a program
which may be educational in relation to interests of rural communities or
interests of particular sections of city communities will not be available on
datacasting, for no particular reason.
Datacasting services could be of great potential
benefit to people who do not have physical access to educational courses and
large libraries or university campuses. To people who live in rural areas, they
could offer access to what was previously the preserve of town and city
dwellers. In the Committee’s view it would be regrettable if the current
restrictions resulted in discouraging potential datacasters from offering
educational programs. Accordingly,
The Committee recommends that the Bill be amended to delete the
requirement that only those educational programs that are linked to a course of
study or instruction be acceptable for datacasting purposes.
National broadcasters radio simulcast
In their respective submissions, both the ABC
and SBS argue that the datacasting definition should be amended to allow them
to broadcast their radio network on the audio stream. This will allow them to
reach audiences in regional and remote areas that currently do not get a full
suite of radio services.
In seeking the necessary amendments to the Bill in order to be able to
simulcast their radio services, SBS told the Committee:
It seems to us a really good opportunity to solve the problem
that exists and that has existed for some time, which is that SBS Radio is
currently available only in the state and territory capitals, plus Wollongong
and Newcastle. We have tried, over many years, to get frequency allocations in
regional and rural areas. That is getting harder and harder to achieve in the
very competitive market for spare frequency. It seems to us that it would be
really simple to use a tiny—and it would be only very small—amount of our
digital television spectrum to take our radio services into the homes of
everyone around Australia.
Technical limitations mean that currently
Australians whose first language is a language other than English and who live
in rural and remote areas are not able to access SBS programs in spite of the
requirement in SBS’s Charter that it should make its services available to
those Australians as well as to those who live in the cities.
The representatives of the ABC also argued for
amendments to the Bill stating that ABC radio services such as Parliamentary
Radio and News Radio, Classic FM and Triple J could all become available to all
parts of Australia if the ABC were to be allowed to simulcast those services
using digital spectrum available to it. At present, many rural communities do
not receive those services. Others have had to raise their own funds to
facilitate access. The ABC’s Managing Director told the Committee:
... if you take News Radio, for example, I think the coverage—I
would have to check—is around 58 per cent of the country. To enable all the
people of Australia to get News Radio I think would be an added benefit. If we
were to distribute it through a decoder in digital, they could receive that ...
...Triple J has an audience of a lot of young people who feel they
are disconnected. I feel that all those services ought to be made available to
all Australians where the parliament has the chance to do it.
The evidence given at the inquiry persuaded the
Committee that digital television transmission should be used to enable the ABC
and SBS to make more radio services available to people in the regions who do
not currently receive them. Accordingly,
The Committee recommends that the Bill be amended to enable the
Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service
(SBS) to broadcast their radio services through their digital television
The ABC also argues that, if it is not to be
allowed to multichannel, the Bill should be amended to allow it to datacast its
children’s programming, information-only programming and educational
programming. All of that mostly educational content would be severely
restricted if the Bill is passed in its present form.
In its submission, SBS joins other witnesses in
recommending that the prohibition on program extracts being self-contained be
deleted from the legislation. SBS argues that:
Where program extracts can be no longer than ten minutes, and
cannot be combined to constitute a television program, it seems unnecessarily
prescriptive to also prevent them being self-contained. This prohibition
particularly affects new and young film makers, who typically start their film
making development with short films and animation programs. SBS is currently
the only broadcaster to accommodate short film and video, principally its
weekly compilation program, Eat Carpet.
A number of submitters also recommended that the
reference to “little or no emphasis on dramatic or entertainment value” be
deleted from the list of restrictions on Information-only Programs (new
Schedule 6, Clause 4 of the Bill) as many programs which are not primarily
designed to be entertaining still need some entertainment value in order to
attract audiences. As well, there will be difficulties in defining whether a
program has entertainment value or not, since this may be a subjective
The point made in the original legislation was
that broadcasting programs would be primarily offering dramatic and
entertainment value. The proposed Bill switches this around to deny
non-broadcasting services (ie datacasting) any entertainment value at all.
Some concern was expressed about provisions
relating to the restrictions on using datacasting to provide Internet services.
Fairfax believes the restrictions will mean that very few, if any, viable
services will be developed. In evidence before the Committee, Fairfax stated:
The Internet provisions just do not work. They can and should be
amended. In relation to that, it is important to remember that spectrum
broadcasting is not like cable. In cable you communicate ultimately one to one
and you can send information packages to individuals. Therefore, you can tailor
the information you send out and you can use the medium efficiently in that
way. Broadcasting spectrum has huge advantages in terms of its communication
with the public because of the ubiquity of the television set. Notwithstanding
that, it is difficult to speak one to one to users when you are broadcasting.
To try to do it uses up an enormous amount of spectrum. The way the present
Internet conditions are drafted—that is, not allowing a walled garden—will make
it extremely difficult, at least under present technology, to present any kind
of viable Internet service at all.
Telstra indicated in its evidence that it
understood that much of the material it uses on its Internet site would not be
able to be part of a datacasting service received through a television set
unless it was in a site which Telstra controlled. This could be a costly
exercise for Telstra and in some instances, an impossibility, if it is provided
to Telstra on an ‘as is’ basis. Telstra believes this aspect of the legislation
So it would have to be, in a sense, taken from the Internet and
put in a walled garden. We understand that it would then be subject to the
genre restrictions, which makes it problematic if we have that content in an
We also think that we are not going to be in a position to
re-edit content, particularly where we have acquired that content from third
parties. It makes it a significantly more costly proposition if you have to
re-edit for your datacasting service content that you already have for your
broadband service. We may not have that right, in any event. If we have
acquired content from a third party, it would quite often be provided to us on
an ‘as is’ basis. What we see as an opportunity to provide Internet type
services to people who may not otherwise access them is going to be thwarted
because we are not going to be able to use the content that we have.
Unfair competition from FTAs
In its submission, Optus raised the issue of the
potential for FTA broadcasters to use the digital spectrum which they have
received free of charge to produce datacasting services which will unfairly
compete with potential new entrants. While FTAs will have to pay a datacasting
charge, they will still be competing from a position of strength in terms of
existing infrastructure and commercial content arrangements. This is especially
concerning given the downgrading of HDTV requirements on the FTAs which mean
that when they broadcast in SDTV using 2 MHz, they have 5 MHz spare capacity to
use for datacasting purposes (after 2003 or once a datacaster has begun
services in their broadcast area).
Optus made the point that:
New datacasting providers are likely to need several years and
large advertising budgets to be able to compete with the profile and exposure
of datacasting services offered by an FTA. Also new datacasters will have
obtained spectrum through a price based allocation process, and will not be
able to rely on an incumbent position in the FTA industry in order to provide
datacasting services. New entrants will therefore be undertaking greater risks
in bringing new services to audiences.
Optus suggest consideration be given to
expanding the definition of datacasting for new entrants, while maintaining
some restrictions for FTAs until after the end of the simulcast period. Optus
recommends that at that time, FTAs be required to pay the same amount as new
entrants pay at auction for the right to offer datacasting services. This will
ensure they do not have an unfair competitive advantage over new datacasters
who have to purchase spectrum on the open market.
Fairfax also raises concerns about unfair
competition from the FTAs in the area of datacasting. In evidence to the
Committee, Ms Hambly stated:
If the entities that can datacast and broadcast do not pay for
the extra services that they are able to provide – for example, the electronic
program guide, multi channelling, enhanced programming, which I think are at
least pseudo datacasting – then I think we are at a competitive disadvantage
just in relation to datacasting.
The Australian Information Industry Association
(AIIA) submission suggests that options for ensuring a more competitive
environment include limiting the type of programs that FTAs are permitted to
datacast or not permitting them to datacast at all before the end of the
simulcast period.. AIIA also believes careful consideration will need to be
given to the charges FTAs pay for use of the datacasting spectrum and their
relationship to auction prices paid by new entrants.
Telstra took a strong view on this in evidence
before the Committee:
On the one hand, you have free spectrum, new revenue streams
particularly with what we see as an extension of multichanneling in the form of
digital program enhancements, firm business models and certainty about the
availability of spectrum, protection from competition, broad regulation,
flexibility and a perpetual licence. On the other hand, you compare that with a
high up-front charge for spectrum to new entrants in an emerging industry who
need to make a business case for acquisition of that spectrum in a highly
risk[y] environment with untested business models. It is most unusual to so
prescriptively regulate an emerging industry. We see that as possibly being
prone to litigation and uncertainty and as just not enhancing the business for
datacasters at all.
Electronic Program Guides
A number of submissions and witnesses to the
Inquiry indicated some concerns in relation to the FTAs use of EPGs. Firstly,
concern was expressed about the competitive advantage FTAs receive through
being able to offer EPGs without paying for them. The second issue raised was
whether there is a need to legislate for control of EPGs and conditions of use.
However, SBS’s submission argued for an expanded
definition of the EPG to allow for its full potential as an audio visual medium
to be realised.
The objective of the additions to Schedule 4,
Clauses 6 and 19 of the Bill relates to EPGs and adds to the list of exceptions
to the legislative requirement that licensees must not broadcast a television
program in SDTV digital mode during the simulcast period unless it is also
broadcast simultaneously in analog mode in the licence area concerned.
The proposed Schedule 4, Clauses 6(24) and
19(24) define EPGs as schedules of television programs provided by any or all
of the national or any or all of the commercial television broadcasting
services; or both, or such a schedule combined with either or both of the
- brief, textual items of factual information, and/or comment,
about some or all of the programs in the schedule;
- a facility used solely to enable an end-user to select, and
commence viewing, one or more of the programs in the schedule.
Fairfax believes that the ability to use EPGs as
a launch pad to other services means an EPG can become a “portal” for TV
channels, datacasting services, e‑commerce or Internet services. This
gives FTAs potentially a very significant advantage in this area. In evidence
to the Committee, Fairfax commented:
We think that there should be some more levelling of the playing
field than there presently is. So we do not have a problem with the
free-to-airs doing electronic programming guides. However, we think that it is
not what broadcast television does at the moment and, therefore, if they want
to do it they should pay for it. Further, because they will be able to do it
for a very wide audience, unless the electronic program guide that a particular
free-to-air wants to broadcast is simply of its own programs—if it is putting
up anything other than its own programs—we believe that it should put up all
datacasting and free-to-air programming. We also believe that there should be a
provision in the Act making information about both free-to-air and datacasting
programming available to other participants in both of those industries so that
we can all produce a useful program guide should we want to.
The ABC, in evidence to the Committee, agreed
that any rules relating to EPGs in Australia should at least be as robust as
those in the UK in ensuring fairness to all players through requiring that if
programming information is provided for one channel other than one’s own, it
must be provided for all and in a standardised way.
SBS, in its submission, stated that the
restrictions on the EPGs appear to be stifling at the outset the potential
development of a powerful new tool for both broadcasters and consumers. This is
because the EPG is restricted to a text-based schedule and a program selector.
SBS believes the EPG offers an interactive gateway to much more than an index
style list of TV programs and should be seen as an audio visual medium. SBS
recommends that the definition of an EPG be expanded to allow for audio, video
and animation content as well as text.
In its evidence to the Committee, Open TV also
supported the urgent need for legislation to cover ownership of EPGs and under
what conditions. Open TV described the EPG, in interactive television terms, as
“the pot of gold, the most widely used interactive television application”.
FACTS, in its supplementary submission, argues
that more elaborate EPGs will be permitted as datacasting services once the
embargo on FTAs offering datacasting services ends (no later than 1 January
2002) and that the basic EPGs defined in the legislation are just an interim
measure to ensure that viewers have some means of navigating around the new
Open TV also stated that the situation in the UK
where the different FTAs all came under the banner of On Digital meant that
users could get all FTA programs and other services through one EPG. Given the
proposed legislation in Australia, Open TV was unsure how this would work.
A strong case was made by witnesses and in
submissions to the Committee that Electronic Program Guides should be
standardised so that in cases where a channel provides programming information
other than its own then it should provide programming information for all
channels including those offering exclusively datacasting services. In a
supplementary submission to the inquiry, FACTS stated its opposition to such a
Powers of the ABA as regulator
Stay of proceedings
The Bill proposes to insert a new Clause 57 into
the BSA concerning stay of proceedings relating to ABA determinations on
additional licence conditions, remedial directions and suspension/cancellation
decisions for datacasting licensees. These changes will:
- prevent relevant provisions of the Administrative Decisions
(Judicial Review) Act 1977 (ADJR) from applying;
- prevent the Federal Court from making any orders staying or
otherwise affecting the operation or implementation of any ABA decision pending
finalisation of an application for a writ or injunction in relation to that
- prevent relevant sections of the Administrative Appeals
Tribunal Act 1975 from applying.
The intent of the legislation is to prevent a
person from continuing to provide an unlicensed datacasting service or a
service which breaches certain licence conditions throughout the period during
which the case is being considered by the courts or the Administrative Appeals
Tribunal. The Explanatory Memorandum to the Bill acknowledges that this is
unusual but stated that:
In the absence of such a provision, there may be considerable
financial incentives for a datacasting licensee to test the boundaries of what
is permitted under its licence, while using whatever scope is available for
legal challenge to delay the effect of any enforcement action taken against it.
Fairfax was particularly concerned about the
powers given to the ABA in relation to datacasting licensees. It described it
in the following terms:
Imposition of the sentence before the trial is complete. Removal
of a service from the air is effectively a death sentence on that service.
Elemental principles of justice and due process require that irreparable
enforcement action should only be imposed after all legal remedies are
exhausted. The legislation should be so amended to eliminate this potential.
In evidence to the Committee, Fairfax also
pointed out that:
... [these measures] have no precedent in the Broadcasting
Services Act as it presently stands. Notwithstanding the fact that very serious
matters are dealt with in the Act—matters of cross-media ownership, foreign
ownership; all of those things—none of those provisions give the kinds of
powers that the ABA has to, in essence, take people off the air or impose extra
conditions on licences. You have ultimate relief in the courts, but by that
time you may have been off the air for some time.
Oversight of ABC and SBS datacasting services
Both the ABC and SBS stated that, in giving the
ABA jurisdiction over ABC and SBS datacasting content, the Bill potentially
compromises the statutory roles of the respective Boards. The ABA would, in the
view of the ABC and SBS, have control over program content and this is contrary
to the spirit of their enabling legislation, the Australian Broadcasting
Corporation Act 1983 (ABC Act) and the Special Broadcasting
Service Act 1991 (SBS Act).
In its submission, the ABC argued that:
The ABA’s jurisdiction over datacasting content presents a
potential conflict of interest for the ABA in that it will be acting as both
the creator of the rules as well as policing compliance. The ABC Board believes
it is competent to ensure that datacasting or other digital services comply
with the Government’s rulings on content restrictions ...
In previous broadcasting legislation, the ABC has been treated
differently to the commercial sector because of its distinctive role and
different accountability requirements. This Bill places the basic grant of
power to datacast in the Broadcasting Services Act and not the ABC Act.
The SBS submission points out that national
broadcasters have not, hitherto, been subject to a licensing regime. SBS
... the national broadcasters be removed from the commercial
datacasting framework (Schedule 6), and that an express power for SBS and ABC
datacasting be provided in the SBS Act 1991 and the ABC Act 1983
However the Committee believes that it is
important in the context of the datacasting regime that the ABA should have a
formal role in governing adherence to the definitions by all players in the new
Datacasting charges for
A further but related issue to the one above for
the ABC and SBS is the imposition of datacasting charges on all FTAs. Both the
ABC and SBS argue that they should be exempt from the requirement to pay a
datacasting charge as they should be treated differently to commercial FTAs and
their public benefit, not-for-profit objectives should be recognised. The ABC
submission states that:
The ABC is funded through Parliamentary appropriation and
operates as a non-commercial service for the benefit of all Australians. As
datacasting is an additional means of extending its services to the public, it
considers that it should not be charged for doing so. If such a charge were
imposed, the ABC would submit that its Parliamentary appropriation should be
SBS, in evidence to the Committee, argued that
it would need further Government funding to cover the costs of the charge and
that this would be nonsensical.
We have no idea how that charge is going to be configured or
what it will be, but we would certainly have to go to government to cover the
cost of any charges. You then have the ridiculous situation of applying to
government to cover a national broadcaster paying a fee back to government. It
does not make sense to us.
Length of datacasting transmitter
The Bill provides that the transmitter licences
will be a category of apparatus licence under the Radiocommunications Act and
allocated under a price-based system for a 10 year period with the expectation
of a single renewal of 5 years only. The Bill also imposes restrictions on what
the licence can be used for up until 31 December 2006. From 1 January
2007, the licensee will be able to provide licensed broadcasting services as
well as licensed datacasting services.
The regulatory and revenue arrangements which
should apply to enable a datacasting transmitter to be used on or after 1
January 2007 to provide other services licensed under the BSA is subject to
review before 31 December 2005.
Submissions and evidence before the Committee
indicate that the finite nature of the licences and the uncertainty surrounding
regulations after 31 December 2006 may have an impact on the
viability of new entrants to the market and on the prices which they may be
willing to pay for the licences.
In evidence before the Committee, Telstra argued
... without rapid take-up of digital TV and datacasting services,
consumers will not be able to benefit from the competitive provision of
services using the spectrum that will be freed up once the analog simulcast is
turned off ... There are layers of prescription and limitation on datacasting
services that really give us a lack of commercial certainty. The bill under
discussion today effectively loses its unique opportunity. This is because
datacasters are not interested in investing in spectrum, with the business
cases really having only a 15-year anchor point, whereas with the free-to-airs
there is an expectation of renewal. There are also many regulatory reviews
which will impact on their business, anyway. These factors probably also mean
that the cost of the datacasting spectrum will be low rather than high because
of the inherent risk in entering into this business, especially in entering
against businesses that will already have had secure bands and will be secure
in that business.
Optus expressed similar concerns:
From Optus’s point of view, we have a concern at the degree of
uncertainty that that brings to the environment and also the lack of parity
between the way the datacasters are treated and the way the free-to-air
broadcasters, who have expectations of renewal, are treated.
In response to questioning from the Committee,
Fairfax indicated that the reviews of datacasting (Schedule 6, review due in
2003 and Post-2006 Regulatory Arrangements review, due in 2005) should look at
the issue of the length of the licences and be conducted as quickly as
possible. Fairfax commented:
Most importantly there is a need for certainty. I can understand
that none of us are quite sure how this service will develop and how indeed
other services which may be provided through spectrum will develop as well. So
I can understand the notion of a review period. But I think it is very
important that the people who are thinking of bidding for these licences have a
clear understanding of what are the terms under which those reviews will be
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