Chapter 2 - Background


Chapter 2 - Background

2.1        The bill relates to two policy objectives, namely:

  • realising the digital dividend (Schedule 1); and
  • achieving the digital television switchover, in particular by enabling the roll‑out and improving the operation of digital television services provided by satellite (Schedule 2).

2.2        This chapter provides an overview of the policy and regulatory context of these objectives and outlines the key provisions of the bill.

The policy and regulatory context

2.3        The committee's discussion of the relevant policy and regulatory context of the bill is organised chronologically. This part of the report first examines the digital switchover (which is most relevant to Schedule 2), followed by the digital dividend (which is most relevant to Schedule 1).

The digital television rollout and the digital-only switchover

2.4        The rollout of digital television transmission in Australia commenced in 2001, following the decision of the Australian Government in 1998 to mandate the digital broadcasting of commercial and national free-to-air television services.[1] In December 2007, the Minister for Broadband, Communications and the Digital Economy, Senator the Hon Stephen Conroy (the minister), announced that all free-to-air television broadcasters in Australia will complete the switch from analog to digital-only transmission by 31 December 2013.[2] The minister released a digital switchover timetable in October 2008, providing for the progressive switch-off of analog transmissions on a regional basis.[3]

2.5        The Digital Switchover Taskforce within the Department of Broadband, Communications and the Digital Economy (DBCDE) is responsible for coordinating and overseeing the switchover.[4] The Australian Communications and Media Authority (ACMA) is responsible for regulatory and technical matters associated with the switchover, including administering digital conversion schemes, managing the spectrum, and providing advice and other support to the minister and DBCDE.[5]

2.6        According to the ACMA, the rollout of digital television transmissions is complete in metropolitan areas and is nearing completion in most regional areas.[6] Viewers in areas where digital services have been rolled out receive both analog and digital services by virtue of a simulcast period.[7] Once the simulcast period has ended, viewers will receive digital-only services. The first full digital switchovers occurred in June and December 2010, at five locations in regional Victoria and South Australia respectively.[8]

The 'same coverage' objective

2.7        A key objective of the switchover is to ensure that digital transmissions achieve the same level of coverage and potential reception quality as analog services.[9] As discussed below, this objective is incorporated in the regulatory framework for commercial and national broadcasting services. It is also complemented by policy and industry based measures, designed to facilitate compliance with regulatory obligations or to address services falling outside the scope of the regulatory conversion framework.

Regulatory conversion schemes

2.8        In accordance with the requirement in Schedule 4 of the Broadcasting Services Act 1992 (the BSA), the ACMA has formulated plans for the progressive conversion of commercial and national broadcasting services to digital mode. These plans are required to address, by way of planning and licensing provisions, several policy objectives directed to achieving 'same coverage'.[10]

The Viewer Access Satellite Television platform

2.9        Consistent with the 'same coverage' objective, the minister announced, on 5 January 2010, that the government would fund a new direct-to-home (DTH), free-to-air satellite service for viewers in digital television 'black spot' areas—in essence, those areas which receive a deficient terrestrial digital signal.[11]

2.10      The satellite service, known as the Viewer Access Satellite Television (VAST) platform, was made available from 15 December 2010, and is being rolled out progressively in accordance with the digital switchover timetable.[12] To access VAST, viewers in eligible areas[13] require DTH satellite reception equipment. The government administers a satellite subsidy scheme (the SSS), which provides eligible households with financial assistance to purchase and install the necessary equipment, including a satellite dish, cabling and a set top box with a smart card.[14]

2.11      The amount of the subsidy varies according to the location of eligible households, to reflect the fact that different satellite equipment is required to suit the conditions of different regions, and that installation costs may vary between regions. DBCDE's Digital Switchover Satellite Subsidy Scheme Guidelines state that:

the subsidy will be a minimum of $400 per household, with higher subsidy amounts of $550 and $700 available for households in designated 'very remote' and 'far north tropical' areas ... In addition to these amounts, households in designated Remote Indigenous Communities may be eligible for $280 worth of additional assistance.[15]

2.12      The guidelines state further that 'the cost of installing VAST will be greater than the subsidy amount and each household will be required to make a fixed standard co-payment. It is expected that this contribution will be between $200 and $350 depending on the geographic location of the household'.[16]

2.13      The legislative framework for VAST is contained in s 38C of the BSA, which was inserted by the Broadcasting Legislation Amendment (Digital Television) Act 2010. The committee inquired into the provisions of the amending legislation in May 2010.[17] As explained below, Schedule 2 of the bill proposes some amendments to the legislative framework for the VAST platform to facilitate the roll out of the service in Western Australia.

Australian government funding—digital terrestrial services

2.14      On 9 November 2010, the minister announced that, as part of the digital switchover program, the government will provide $34 million over four years to improve digital terrestrial coverage. This funding will enable commercial television broadcasters in terrestrial licence areas in regional South Australia, remote and regional Western Australia, and remote and central Australia to install additional digital transmitters.[18]

Industry based initiatives

2.15      In addition to the measures outlined above, the commercial free-to-air broadcasters are funding enhanced digital terrestrial coverage measures for services which are outside the scope of the regulatory conversion framework and thus not subject to conversion requirements. In his announcement of 5 January 2010, the minister indicated that free-to-air broadcasters had committed to:

  • providing 'gap fillers', which are additional digital transmitters to fill coverage gaps; and
  • upgrading many community operated analog retransmission facilities, known as 'self-help' facilities, to operate in digital mode.[19]

2.16      To explain the latter initiative, analog 'self-help' retransmission facilities are a solution for viewers in areas unable to obtain adequate terrestrial reception from existing broadcaster-operated transmission facilities. Self-help facilities are operated and maintained by third parties, such as local governments and community groups. These facilities are not covered by the digital conversion schemes administered by the ACMA under Schedule 4 of the BSA. Consequently, they are not subject to the digital conversion obligations or policy objectives established under the BSA.[20]

2.17      In its December 2010 Report on Digital Transmission and Reception, DBCDE reported that there are over 600 self-help facilities in Australia, located mainly in regional and remote areas.[21] The report stated that analog self-help sites are potentially, but not necessarily, areas of digital signal deficiency. Potential digital signal deficiencies in areas serviced by self-help facilities may be addressed where:

  • the broadcasters' wider digital footprint reaches the area;
  • the broadcasters or current community based self-help facility operator converts the site to digital; or
  • a local government or community group establishes and operates a new digital self-help facility.[22]

2.18      Free TV Australia and Regional Broadcasting Australia (RBA) have provided to government lists of existing self-help facilities to be digital-enabled in regional and metropolitan licence areas. Mechanisms for digital-enabling these sites include the conversion of infrastructure to digital transmission, the installation of broadcaster‑operated 'gap fillers', or obtaining digital coverage through broadcasters' wider digital footprints. As at December 2010, the broadcasters' lists identified 79 sites for conversion from analog to digital, and 44 sites that may be covered by a wider digital footprint and broadcaster-operated 'gap fillers'. These lists are being updated periodically as the switchover progresses and broadcasters complete more detailed site assessments.[23]

2.19      The December 2010 Report on Digital Transmission and Reception indicated that the conversions of listed self-help sites will be managed and funded by the broadcasters, but will require the involvement of the relevant community site operators. The report noted that the final decision whether to proceed with a conversion—and the terms of the conversion—is a matter for negotiations between the relevant broadcasters and community site operators. As at December 2010, the broadcasters' offer to self-help operators is to fund the digital upgrade and maintenance of self-help infrastructure for 10 years. The existing operators would be responsible for the maintenance and operation of the facility, with the broadcasters holding the licence for the transmitter.[24]

2.20      The report noted that any remaining signal-deficient areas—including any analog retransmission sites which are not converted to digital by broadcasters—will progressively be able to access the VAST service.[25]

2.21      As discussed in chapter 3, the future role of self-help facilities was the subject of public and industry comment in this inquiry. A number of submitters—primarily local governments, regional development associations and broadcasting industry bodies—commented on the potential impact of VAST services on terrestrial, self-help facilities.

The digital dividend

Size, location and potential uses

2.22      As mentioned in Chapter 1, an important consequence of the digital switchover is the freeing up of a significant amount of spectrum previously utilised by analog services. This freed-up spectrum—or more precisely, the benefits able to be realised from new uses of this spectrum—is referred to as the digital dividend.

2.23      On 24 June 2010, the minister announced the government's intention to release a contiguous block of 126 Megahertz (MHz) of spectrum as a digital dividend. The digital dividend will cover the frequency range of 694 to 820 MHz inclusive, in the upper ultra-high frequency (UHF) band, which is currently occupied by television channels 52–69.[26]

2.24      The minister's announcement followed the release by DBCDE of the Digital Dividend Green Paper (the green paper) in January 2010, and subsequent consultation period. The green paper proposed the release of a 126 MHz-wide spectrum, and sought public comment on the potential uses of the spectrum, the potential benefits of such uses to the Australian community and economy, and the costs associated with the restacking of existing digital services.[27]In the green paper, the minister described the UHF band as the 'waterfront property' of the radiofrequency spectrum due to its 'ability to carry signals over long distances, penetrate buildings and carry large amounts of data'. The green paper identified a range of new communication services as potential uses for digital dividend spectrum, including super-fast mobile broadband. The green paper emphasised, however, the need to balance the potential new uses of the spectrum with the maintenance of high-quality, free-to-air digital services.[28] In addition, some submitters to the green paper process supported the allocation of spectrum to a range of non-commercial uses—including, for example, emergency and national security services, other essential government communications, and utilities and transportation services.[29]

2.25      The government has identified the allocation of the digital dividend spectrum as an important microeconomic reform.[30] The minister indicated that the government intends to auction the spectrum in the latter part of 2012. He noted the government's intention to make the spectrum available 'as soon as possible after the switch-off of analog television services on 31 December 2013'.[31]

2.26      While several OECD countries have realised, or are in the process of realising, digital dividends upon completion of their digital switchovers,[32] some commentators have argued that Australia is in a unique position. It has been suggested that several other countries—including the US, the UK and 'most other European countries'—planned for a digital dividend in advance of their digital channel allocations. Accordingly, it is said that the task of 'restacking' may be 'a particularly acute problem in Australia and a peripheral issue elsewhere'.[33]

The process for realising the digital dividend

2.27      There are three stages in realising the digital dividend:

  • completing the switchover to digital television by 31 December 2013 (the 'switchover');
  • clearing existing digital television services from the block of spectrum earmarked as the digital dividend (the 'restack'); and
  • reallocating the cleared spectrum to new users (the 'reallocation').[34]
Recent developments relevant to the bill

2.28      The restacking stage has been the subject of recent policy and regulatory attention—including in Schedule 1 of the bill.

2.29      In July 2010, the minister issued a direction to the ACMA, covering a range of restacking issues.[35] The direction sets out the government's high-level objectives for realising the digital dividend, which the ACMA must take into account in exercising its spectrum management and planning functions under the Radiocommunications Act 1992 (the RCA) and the BSA respectively.[36] High-level objectives in the direction include a requirement to clear the band earmarked as digital dividend, and to complete restacking as soon as possible, with a target of the end of 2014.[37]

2.30      To implement the direction, the ACMA is developing a set of guiding principles for the restack. It is undertaking a consultative process, including the following measures:

  • releasing a discussion paper in February 2011, outlining and seeking public comment on a proposed channel planning approach and planning principles;[38] and
  • establishing a Restack Planning Advisory Group comprising broadcasting industry representatives.[39]

2.31      In addition to the ACMA's development of guiding principles for the restack, Schedule 1 of the bill seeks to provide the ACMA with improved restacking powers, in respect of both spectrum designation and planning. DBCDE released an exposure draft of the bill in December 2010.[40]

2.32      The ACMA has also commenced consultations on the third stage of realising the digital dividend, in relation to the configuration and reallocation of the spectrum.[41]

Outline of the bill

2.33      The bill proposes amendments to the BSA, the RCA and ancillary legislation, including the Copyright Act 1968. As mentioned above, the key amendments, contained in Schedules 1 and 2, relate to:

  • the digital dividend—in particular the ACMA's planning powers and functions in relation to restacking; and
  • the digital switchover—in particular the roll-out in remote Western Australia of digital television services provided by the VAST platform.

2.34      Schedule 3 contains transitional provisions in respect of decisions made by the ACMA before the commencement of the amendments in Schedule 1.

Schedule 1—the digital dividend

2.35      Schedule 1 proposes technical amendments to the ACMA's exercise of its planning powers under the BSA, and its spectrum management functions under the RCA, to facilitate the release of the digital dividend.

Television Licence Area Plans

2.36      The key measure in Schedule 1 is contained in provisions enabling the ACMA to make a new form of licence area plan, known as a Television Licence Area Plan (TLAP).[42] TLAPs are intended to supersede existing forms of plans made under the BSA, namely:

  • licence area plans (LAPs),[43] to the extent that they deal with the planning of television broadcast services; and
  • digital channel plans (DCPs) made under the digital conversion schemes noted above—namely the Commercial Television Conversion Scheme 1999 and the National Television Conversion Scheme 1999.[44]

2.37      According to the Explanatory Memorandum, TLAPs are designed to provide greater efficiency and flexibility in restack planning than is currently available under the existing framework of LAPs and DCPs.[45]

2.38      Item 6 of Schedule 1 provides that TLAPs will:

  • specify the channels that are to be available in particular areas of Australia to provide commercial, national and other television broadcasting services;
  • allot, or empower the ACMA to allot, digital channels to particular commercial television broadcasting licensees, national broadcasters and other providers of broadcasting services;
  • determine the characteristics, including technical specifications, of the transmission of commercial, national and other broadcasting services using those channels;
  • determine, or empower the ACMA to determine, any technical limitations on the use of a particular channel;
  • determine, or empower the ACMA to determine, whether the use of a particular channel is contingent upon any event or circumstances;
  • allot, or empower the ACMA to allot, different channels for different periods to particular broadcasters, to allow for channel allotments to change from time-to-time within the licence area; and
  • allot, or empower the ACMA to allot, two or more channels to particular broadcasters, enabling the ACMA to plan and implement, where necessary, temporary simulcast measures while technical solutions are implemented. This provision could permit, for example, a temporary simulcast period to enable the reconfiguring of central antenna systems for multi-unit dwellings.[46]

2.39      Other key provisions to support the flexible and efficient administration of TLAPs include:

  • a specification that a TLAP need not identify a particular television broadcasting service by name. This means that multi-channelled digital television services do not have to be dealt with in a separate TLAP;[47]
  • suspension of certain statutory planning criteria mandated by the BSA, in respect of planning of the broadcasting services bands;[48]
  • streamlining, for a limited time, the statutory consultation requirements imposed upon the ACMA under the BSA, in relation to the preparation or variation of TLAPs, or to the performance of functions or exercise of powers under those plans;[49]
  • enforcement provisions to ensure compliance with TLAPs, including, statutory compliance obligations and licence conditions, with injunctive remedies and civil and administrative penalties for breach;[50]
  • provisions enabling the making of binding ministerial directions to the ACMA on the exercise of its powers to make or vary a TLAP;[51] and
  • provisions that a written determination made by the ACMA in relation to the exercise of its powers under a TLAP is not a legislative instrument; nor is a decision made by the ACMA under a TLAP subject to external merits review.[52]

2.40      The bill provides that TLAPs will take effect:

  • not before the end of the simulcast (or simulcast equivalent) period for the relevant licence area; and
  • before the 'designated restack day', which is defined as 31 December 2014, or such later date as the minister specifies in writing (subject to certain criteria guiding the exercise of his or her discretion, generally relating to the existence of 'serious difficulties' of a technical or engineering nature).[53]

2.41      According to the Explanatory Memorandum, this timing is intended to enable LAPs and DCPs to continue to operate until the relevant TLAP comes into force.[54] The Explanatory Memorandum further notes that it is likely that a TLAP will not come into force until after the end of the simulcast (or equivalent) period.[55]

Spectrum management powers

2.42      In addition, Schedule 1 contains provisions directed to resolving uncertainties or inconsistencies in the RCA in relation to the ACMA's spectrum management functions and powers. Key measures include:

  • clarifying current uncertainties about the minister's power to vary designations of spectrum as 'broadcasting services bands' (and thus subject to the regulatory scheme in the BSA), by expressly conferring a power of variation;[56]
  • allowing, in certain circumstances and for the purposes of the restack, a frequency band that relates to spectrum within the broadcasting services band to be inconsistent with a 'frequency allotment plan' made under the BSA;[57] and
  • technical amendments to licensing provisions in the RCA to facilitate restacking. In general terms, these provisions streamline processes and reflect the amendments to the digital television conversion schemes in the BSA due to the introduction of TLAPs.[58]

Schedule 2—the digital switchover

2.43      Schedule 2 sets out provisions directed to achieving the digital switchover through the roll-out and administration of the VAST platform, in particular its roll-out in remote Western Australia. Key provisions include the following amendments to the BSA:

  • extending the conditional access scheme governing VAST to remote Western Australia (the Western Australia TV3 Licence Area);[59]
  • empowering the ACMA to declare an area 'service deficient' and thus entitled to access VAST where, after a specified time post-switchover, the number of terrestrial commercial digital television services is less than those required to be provided on the VAST service;[60]
  • measures to ensure that viewers who have already purchased and installed DTH satellite reception equipment to access VAST will not subsequently lose their access if digital terrestrial reception is extended to their area;[61] and
  • amendments to the Copyright Act 1968, clarifying that the retransmission of VAST services is subject to the general broadcast retransmission provisions in Part VC of the Copyright Act.[62]

2.44      Schedule 2 also contains provisions directed to other digital switchover matters, including the following key amendments to the BSA:

  • provisions enabling broadcasters to seek exemptions, in certain circumstances, from their existing legal obligations under DCPs to roll out digital terrestrial facilities;[63] and
  • provisions allowing remote commercial TV entities to transmit digital channels in standard definition only before the end of switchover.[64]

2.45      The committee has been made aware of the urgent nature of these amendments. The committee was informed that the roll out of the VAST service may be delayed in the Western Australia TV3 licence area if the legislation is not passed.[65] The committee was advised that the government's aim is to roll-out the VAST service in Western Australia early 2011, prior to the scheduled digital switchover timeframe of the second half of 2013.[66]

Committee view

2.46      The committee supports the government's policy objective to maximise the benefit that the digital dividend spectrum will bring to the Australian community and economy. A robust, flexible and efficient regulatory framework is critical to the successful completion of the switchover, restacking and reallocation processes.

2.47      The committee notes the urgent nature of the two key reform measures in the bill. An effective regulatory framework is especially critical in the restacking task, given the significant workload involved, particularly in the planning stages. Similarly, the successful implementation of the digital switchover schedule—including the roll-out of VAST services prior to switchover—requires timely regulatory reforms.

2.48      The committee further acknowledges the importance of balancing interests in regulatory efficiency with upholding the needs and interests of local communities in the maintenance and improvement of existing levels of coverage and signal quality. The committee notes the importance of community consultation in this respect. These issues are discussed in chapter 3.

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