Senator the Hon Helen Coonan Minister for Communications, Information Technology and the Arts Deputy Leader of the Government in the Senate

A Digital Action Plan for Australia

Address to Broadcast Engineering News Australian Broadcasting Summit

Sydney

Tuesday 4 April 2006

Thank you Malcolm [Long; MC, Director of AFTRS and ACMA Member ]

Introduction

Thank you for the opportunity to address this Summit and talk about some of the challenges facing the Broadcasting Sector.

Quite clearly the spread of digital technology opens up tremendous opportunities for the future of television, radio and convergent devices.

Digital technology is rejuvenating the old platforms of television and radio broadcasting. In a world where our computers are obsolete in a matter of years or even months, digital is the biggest thing that has happened to the box since it went colour in the 1970s.

In the US, respected TV news anchor Edward Murrow said forty years ago that the ‘new medium of television had the potential to educate, illuminate and inspire' .

But he added that this could only happen to the extent that people were going to use it to that end – ‘otherwise, it is merely lights and wires in a box' .

Digitisation of broadcasting heralds the arrival of a new era. It gives us another opportunity to harness innovation and deliver services to consumers that educate, illuminate and inspire.

But with these opportunities come challenges. I think these challenges can be summed up to some extent by the expression “ the future is not what it used to be ”.

Things are changing so quickly. Regulation needs to allow for innovation while at the same time providing stability for investment in new technology.

One thing is clear – if we do not equip Australia to meet the digital challenge, then we will be left behind.

Today I would like to focus on two main challenges:

the conversion to digital television, and

the introduction of digital radio in Australia.

Digital Television

Last month I released a discussion paper outlining proposed reform options for the media industry in Australia.

At the heart of those proposals is the formation of a Digital Action Plan to energetically drive Australia to digital switchover.

In a world that is becoming increasingly digitised, it is essential that Australia keeps pace with international developments – both in television and radio.

Digital switchover provides a natural point for a range of new digital services in Australia to emerge. It frees up valuable amounts of new spectrum in the congested Broadcasting Services Bands and provides a natural end point for restrictions on multichannelling and the end of high definition TV quotas. It also the point at which we can have a serious look at other industry settings such as the anti-siphoning scheme, while always recognising the desire of Australian viewers to continue to be able to watch significant sporting events on free-to-air television.

Governments across the world will be judged on how they meet the digital challenge. Australia must strive for digital switchover in line with timeframes set by other major countries with which we share technology, consumer goods and programming.

It is essential that the Government, in consultation with industry and the broader community, takes a proactive and energetic approach to this challenge.

Any proposal for a Digital Action Plan for Australia would need three key elements:

A roadmap and time frame for the closure of analogue television services and the end of the simulcast period;

Consideration of what incentives and assistance may be needed for consumers and industry to make the switch to digital; and

A coordinated taskforce of Government, agencies and other stakeholders to drive digital switchover.

I will look at each of these in turn.

Roadmap and time frame for switchover

In keeping with the global shift toward digitisation, it is essential that Australia develop a detailed roadmap and timetable to facilitate a timely and effective switchover process.

While I have said on many occasions that I do not think the current legislated switchover date of 2008 is achievable – I do not believe we need to push the date back indefinitely.

I flagged when I released the discussion paper that I was keen to aim for switchover in Australia to commence between 2010 to 2012, to coincide with other industrialised nations.

For instance, the European Commissioner for Information Society and Media has specified the beginning of 2012 as a deadline for switchover in all member states.

Analogue switch-off is scheduled to be completed in Germany in 2010 and the UK Government recently confirmed that switchover there will occur between 2008 and 2012 on a market by market basis.

And the US has now selected a firm nationwide date for analogue switchover of 17 February 2009 for full power television stations.

It is worth pointing out to the naysayers that many of the countries now driving towards switchover, reported a rather sluggish start to their digital experience.

During US Congress' recent deliberations on resetting their switchover date, one columnist pointed out that 10 years previously New Year's Eve 2006 ‘probably looked as safely distant as the dark side of the moon' .

Yet once the forces of industry, Government and other stakeholders were mobilised and galvanised, a firm date was set and a pathway was forged to get there.

In Australia the transition of television broadcasting to digital services started in 2001 and significant progress has been made in the rollout of the digital signal across Australia.

More than 85 per cent of the Australian population now has access to digital services from all their local free-to-air broadcasters and around 96 per cent of the population has access to at least one digital service.

Despite this excellent progress, digital take up in Australia has not progressed as quickly.

Take-up of free-to-air digital television was around 15.5 per cent of Australian homes at the end of last year. When you take into account the number of homes that have taken up digital subscription television, that figure rises to around 27.5 per cent, although that does not include access to all the free-to-air broadcasters.

Interestingly, there are anecdotal examples of communities surging ahead of the national average when it comes to digital.

Take Tasmania - a market with only two analogue commercial services. The introduction of a third, digital only service has led to a greater level of take-up, with Hobart estimated to have more than 25 per cent of homes with digital television.

As well as a clear date for switchover, with a geographically diverse country the size of Australia we need to ensure that the broadcasters have met their equivalent coverage obligations with the digital roll out before we switch off the analogue signal.

Even though the majority of Australians now have access to a digital signal, many digital transmitters remain to be converted or rolled out, particularly in smaller population centres in regional Australia.

Therefore, consideration must be given to whether switchover will occur on a national or region by region basis. International approaches vary.

As I indicated earlier, both the UK and Germany are switching over region by region whereas in the United States switchover will occur nationwide on the same date.

There are advantages of both approaches and whichever is chosen, it will need to balance the interests of consumers and broadcasters and will inevitably involve significant technical planning.

Incentives – industry

As well as the technical planning for the rollout of digital, international experience also shows us that we will need to consider appropriate incentives for both industry and consumers to move to digital television.

A definite timetable for switchover, with appropriate benchmarks along the way, will in itself provide an invaluable incentive to industry to move towards complete digitisation.

For example, a firm switchover timetable and end date will give manufacturers and importers of television equipment certainty about the need to provide and promote appropriate digital stock.

Other possibilities, such as mandating that equipment be supplied with digital receivers or that analogue equipment is labelled so people know that they are buying something that will need to be replaced or converted to digital within a few years, will also be given consideration in the development of the Digital Action Plan.

As with the introduction of any new technology, there may be some technical glitches with the operation of new and existing equipment and the delivery of new services.

Consumer confidence in switchover will be enhanced through effective measures to address any technical issues which could diminish a viewer's experience of digital, and engineers and other technicians will have a very important role to play.

For instance, a testing and conformance centre could not only help improve products but also build up greater consumer confidence in digital TV. Equally, there will be issues relating to reception in blocks of flats (technically referred to as “multi unit dwellings”), technical standards for equipment and transmissions.

All of these aspects will be considered by any Government and industry collective that may be formed to get Australia to switchover.

Incentives – consumers

The sci-fi author William Gibson once said: “The future is already here - it is just not evenly distributed” and that is certainly true of digital television.

The challenge in forming the Digital Action Plan is how best to encourage greater take-up of digital TV in Australia.

Just as with industry, confidence in the switchover process and date will be an important factor in encouraging more consumers to switch to digital.

Research undertaken in the UK in 2004 found that certainty about the switchover date was the catalyst for many households to willingly convert to digital.

There are a number of other possibilities for encouraging take-up including subsidy schemes, advertising campaigns and consumer education campaigns.

We know, again from international experience, that there is a saturation point for take-up. It may be that once countries hit a certain point with take-up then there needs to be encouragement to get those who lag behind over the last hurdle.

This may mean subsidies, targeted information campaigns and support for people such as pensioners and people with disabilities.

Another issue for consideration is multiple television sets. Most Australians have more than one TV set in their homes – many have four or five.

But as with most technical conundrums, technology may find a way.

At present, for many consumers entry level set top boxes may provide the most economical solution for converting second and subsequent sets. Set top boxes are available from $75 and this price is likely to drop as demand increases. Set top boxes are also becoming smaller, with small devices not much bigger than a pack of cards now available.

Some manufacturers are heading towards integrated digital TVs with an increasing number of models becoming available each month.

At the moment, there appear to be no products on the market that would enable multiple televisions in a household to be converted using one set top box, but these may well come.

Further, the home media centre is becoming a reality with a number of recent product launches. These products can be a video-on-demand service, gaming system, music jukebox, and home content distribution system all rolled into one with the ability to connect to portable and wireless devices.

Managing switchover

The preparation and management of switchover will be a challenging and substantial task requiring a proactive and collaborative approach between Government, ACMA, broadcasters, industry and others.

AMCA has played a significant role in planning for the rollout of digital television – and will continue to have a significant regulatory and technical planning role in the switchover process.

The industry group Digital Broadcasting Australia has done good work over the last few years in providing information to consumers, retailers and installers on digital TV.

I think one of the particular strengths of Digital Broadcasting Australia has been the involvement of the entire breadth of the digital television industry from broadcasters and manufacturers to retailers and antenna installers. This co-operative approach is one that will need to continue.

However, the additional work involved in achieving analogue switchover is substantial, particularly in the areas of market preparation and resolution of technology and equipment issues.

Accordingly, there may be a need for the creation of new processes or organisations for the coordination of the switchover process.

The UK has formed a coordinating body - SwitchCo, also called Digital UK.

The UK body is a coalition of public service broadcasters and representatives of the supply chain.

It has been empowered to administer the timetable for digital rollout, communicate with the public, and liaise with manufacturers, retailers, operators and consumer groups.

While I recognise the significant differences between the UK market and here, it may well be that existing structures are not best placed to undertake the important task of coordinating and implementing switchover.

In any case, it is imperative that we all take a proactive and collaborative approach to driving digital uptake and achieving digital switchover.

The formation of structures necessary to implement the roadmap to switchover will be a key part of considerations in forming the Digital Action Plan.

New digital services

New services and better signal and picture quality will play a significant part in driving consumers over to digital.

In addition to the development of the Digital Action Plan the discussion paper on media reform proposes the introduction of a range of new, digital only services.

Under current legislative provisions, from January 1, 2007, the restrictions on the uses of datacasting transmitter licences (DTLs) will be substantially lifted and new DTLs could be used to provide a wider range of services.

These may include datacasting services or pay –TV and niche (narrowcast) free to air channels to fixed or mobile devices using currently reserved spectrum.

ACMA has now released a discussion paper on technical planning and marketing issues surrounding the allocation of these licences and spectrum.

The industry's response may give some indication of the types of services which may be suitable for this spectrum.

Already I have been interested in preliminary ideas brought forward to me as part of informal consultations with industry.

I have made it clear that I am not so interested in “look alike” services that replicate existing television services, but rather, new and innovative services that are likely to add to consumers' digital experience. The discussion paper refers to services such as mobile television using the DVB-H standard, or datacasting services. As part of considering options for new services on the reserved spectrum, the Government is also interested in “in home” services that can be received on current digital television receivers to assist in driving take up of digital television.

The discussion paper also proposes to allow limited digital multichannelling by the commercial networks using HDTV programming until the multichannelling restrictions are lifted at digital switchover (or earlier should there be any significant changes in the lead up to analogue switchover which alters the balance in favour of an earlier adjustment).

And the genre restrictions that apply to the multichannels operated by the national broadcasters – ABC and SBS – would be lifted subject to restrictions on showing anti-siphoning sport.

This would allow the ABC and SBS to innovate and use their substantial archival footage and produce dynamic new digital content.

I will be very interested to get industry's views on both the types of services that may emerge, and the level of interest in providing them, should the Government choose to allocate datacasting transmitter licences in the near future.

Digital radio

Digital technologies are not only transforming our televisions. Soon, radios in Australia will be able to pause and rewind, show pictures or commentary, playlist information and they will sound better.

Last October I announced the details of a policy framework to guide the introduction of digital radio in Australia.

Under the framework, Australia will implement terrestrial digital radio based upon European Digital Audio Broadcasting (DAB) Standards, also known as Eureka 147.

Digital radio will supplement existing analogue radio services in Australia for a considerable period and may never be a complete replacement.

Today I can announce that the Government has agreed to the drafting of enabling legislation for the implementation of digital radio, consistent with the policy framework I announced in October.

The framework will allow for a staged rollout of digital radio in Australia with broadcasters in state capital markets commencing services by 1 January 2009.

The commencement date of 1 January 2009 for digital radio is consistent with the two to three year period I foreshadowed in October that will be required to complete the necessary technical steps.

This is a realistic estimate of the time needed to put in place a complex legislative and regulatory framework for a new broadcasting technology. It allows for the necessary planning and licensing tasks to be completed and for industry to roll out the required infrastructure. In the Government's view, this commencement date, which is now less than 3 years away, is realistic and achievable.

I am aiming to have the legislation completed by the second half of this year and to have the regulatory requirements such as Digital Radio Introduction Schemes and the associated planning instruments, in place by mid-2007.

Assuming this timetable is achieved, there may be some scope for broadcasters to commence services earlier than 1 January 2009 if industry is able to complete its activities – arrangements for multiplex transmission services and the infrastructure rollout – more quickly than anticipated. However, there is no doubt that this is a significant task.

As I explained in October, the rollout of services in other areas including regional markets is to be considered subsequently, and on the basis of broadcaster interest in delivering digital services in a particular licence area.

As you may be aware, there are still questions to be resolved in respect of the most suitable technology for digital radio in regional areas. The role of digital radio technologies such as Digital Radio Mondiale (DRM) in regional markets needs to be considered further. The Government will continue to work with industry and others to determine which technologies, or combination of technologies, would best serve people living in regional and remote Australia.

There will be a moratorium on the allocation of new Broadcasting Services Bands digital commercial radio licences for six years from the commencement of the first digital broadcasts.

While this moratorium will preclude new commercial entrants to the Broadcasting Services Bands in digital for the period of the moratorium, there will be no new restrictions on current or potential commercial digital radio services operating outside the Broadcasting Services Bands. I understand that some operators are talking to ACMA about options in this regard.

Other elements of the framework include dedicated spectrum for the two national broadcasters and a guaranteed minimum level of broadcast capacity of 128 kilobits per second on a multiplex for incumbent commercial broadcasters.

There will also be access to more digital capacity for these broadcasters, if it is available, provided it is used for new services.

In addition, the legislation will provide for:

the digital radio multiplex licensees achieving specified rollout and coverage requirements in the state capital markets by the end of the moratorium period;

the new licence categories required to give effect to the framework;

powers for ACMA to plan and licence digital radio services and to oversee digital radio rollout including by developing Digital Radio Introduction Schemes;

mechanisms to enable existing commercial, and if they choose, wide-coverage community broadcasters, with the first right of refusal to elect to jointly hold multiplex licences for services in their area;

multiplex licences to be issued to a joint venture for an administrative charge only, where a valid election is made; and

an access regime for digital radio multiplexes, developed in consultation with the ACCC, with the aim of ensuring fair and reasonable access to multiplex transmission services.

As I have indicated, provision is made in the framework for national and community broadcasters to participate in digital radio. Further consideration of funding for these broadcasters will occur in the 2007-08 budget process. This will provide the opportunity for a number of technical issues relating to their rollout to be considered in more detail. This timing would still allow the national and community broadcasters to be ready for a 2009 start date.

International experience indicates that most radio services, including music based services, operate at 128 kilobits per second or below using current DAB compression standards.

However, compression technology has made many advances since DAB services were first rolled out and the Government and industry are continuing to look carefully at these developments and the timing of their possible incorporation into the DAB standard in time for commencement of digital radio services in Australia.

Although industry will certainly have the opportunity to be involved in consultations on the detail of the legislation and further development of the framework, the Government's immediate priority is to move ahead with the enabling legislation for the introduction of digital radio in Australia.

Detailed planning for the allocation of spectrum and licensing of multiplex operators can then proceed so the first digital radio broadcasts can commence in the state capitals at the beginning of 2009, if not earlier.

Conclusion

So, following my comments today I hope it is clear that I am interested in both television and radio in Australia being more than just ‘lights and wires in a box'.

It is a very exciting time for broadcasting. Internationally, we are on the cusp of the full transition to digital, an opportunity to invest and innovate for the industry and an opportunity to enhance services for consumers.

The Government, regulators, industry and other stakeholders all need to work together to ensure that Australia can does not miss out on these opportunities and that as a result, consumers are provided with a richer and more diverse media environment.

I don't think anyone is under the illusion that the tasks ahead of us are small, but it is critical that we have this conversation on the future of our media now; that all interested parties have an opportunity to express their views and concerns, and that out of this process we formulate a plan to take Australia into the digital age.

I look forward to receiving your views on the transition to digital television and the development of the Digital Action Plan in response to the discussion paper on media reform, and wish you well for the rest of the conference.

Thank you.