Ready, Get Set, Go Digital A Digital Action Plan for Australia

Address to 2006 ACMA Conference

23 November 2006
Canberra

Thank you Chris.

Introduction

It has been an exciting year for ACMA and I congratulate Chris and his team for all of your hard work in 2006.
As an agency you are at the centre of some major developments in the communications landscape, the most recent of which is the Australian Government’s comprehensive reforms to the media industry.

It is an interesting time to be in the world of communications as convergence reshapes our perception of industry structures and blurs the lines between what we used to think of as the distinct industries of telecommunications and media.

I have spoken over recent weeks about the challenges and opportunities presented by the new media landscape.

As technology evolves and the needs and demands of consumers have become increasingly complex, the relatively straightforward relationship between the broadcaster and the consumer has all but disappeared.

Industry, regulators and consumers are now involved in a complex relationship characterised by the capricious forces of market demand, constant innovation and almost unlimited choice.

It is this passion for new services and improved technology that is driving the international switch to digital.

Digital television is more efficient, more interactive, offers better picture and sound quality and delivers innovative new services to consumers.

Across the globe Governments are considering how best to help their countries make the digital switch.

For our part, the Government wants to work towards a Digital Australia for the many benefits it brings not only to consumers but to the broader economy - the so-called digital dividend.

The Digital Challenge

The switch to digital is a key element of a package of broader reforms to the Australian media landscape passed by Parliament earlier this year.

As part of these reforms, Australian consumers will see the emergence of a range of new digital only services to help make the digital experience more attractive.

Not only will brand new digital channels emerge but the free-to-air broadcasters – including the ABC and SBS - will be able to boost their range of services with additional digital multi-channels.

Digital is about more than just improved picture and sound quality and new channels, as the switch to digital will also deliver a significant digital dividend to all Australians.

It will bring to an end the costly simulcast period and free up valuable spectrum for better and more efficient use. In short, the digital dividend provides opportunities for even more new services and a return to taxpayers.

Over the next few years Australians will hear more and more about digital – its benefits, the new channels that will be on offer and information about Australia’s transition to digital switchover which will commence in 2010-2012.

During the transition to digital television the Government’s priority is consumers. We want to ensure that all Australians can benefit from the switch to digital.

The Government will work closely with the broadcasting industry to ensure the transition to digital switchover is as smooth as possible and keep consumers informed every step of the way.

This is an exciting moment for Australian television - the journey to a Digital Australia has begun.

The story of Digital so far

Digital television in Australia has already come a long way.

Digital transmissions in mainland State capital cities commenced on 1 January 2001 and have now begun in all regional television licence areas.

Around 85 per cent of the Australian population has access to digital services from all their local free-to-air broadcasters.

Approximately 96 per cent of the population has access to at least one free-to-air digital service and the roll out of transmitters to new areas in country Australia is continuing.

It is estimated that at the end of September 2006, household take-up of free-to-air digital television had reached 1.8 million homes, or around 23 per cent of the Australian population.

ACMA research to be released today shows take-up digital television has more than doubled since 2005 with these estimates showing 29 per cent of Australian households had adopted free-to-air digital.

Combined with digital subscription television this figure rises to around 41 per cent of Australian households with some form of digital television.
The range of digital receiver equipment is increasing with more than 180 models currently available.

At the same time, basic set top box prices are continuing to fall. A basic set top box now costs around $90.
Meanwhile, the Australian Government is investing around $1 billion in the digital conversion of ABC, SBS and $250 million to help regional commercial broadcasters convert to digital.

From these figures it is not difficult to build the economic case for making the transition to digital switchover as expeditiously as possible.

However, as I have said before – achieving digital switchover is not as simple as giving everyone a digital set-top box and calling time on the analogue signal.

The roll-out of digital transmission needs to be completed, consumers need to be made aware of the benefits of digital so take-up increases, technical and transmission matters need to be addressed and we need to be responsive to the many issues likely to arise along the way.

That is why the Government has prepared a Digital Action Plan – Ready, Get Set, Go Digital - that I am releasing today.

It will ensure that industry, broadcasters, manufacturers, retailers, technicians and consumer groups are working together with Government to make the transition to digital a smooth one.

And, of course, we must ensure that all Australians are on board for the journey to digital and are well informed along the way.

For this is the biggest change to television since it went colour and while it does not mean that every Australian will have to buy a new TV, it will require informed choices and action on behalf of every Australian household with a TV.

We must achieve digital switchover in a managed, responsible and practical way.

The Digital Action Plan outlines a range of steps the Australian Government, industry and regulators will take to ensure a smooth transition to digital switchover
The Digital Action Plan will be an iterative process. We cannot anticipate every technical or other difficulty we may encounter on our journey to digital.

But we can be prepared and that is the rationale for having a Digital Action Plan.

For the first step along the road, we already have a number of initiatives in train to speed up our transition to digital.

New Digital Services

The first matter we need to address as we head towards digital switchover is accelerated take-up of digital television.

Even though I believe we are fast approaching a tipping point in digital take-up, clearly there is a way to go.
Relying on market forces alone to drive digital take-up clearly has not been enough.

So, as part of the media reform package that passed Parliament earlier this year there were significant opportunities for the emergence of new digital services for Australian consumers to accelerate take-up.
While many have been critical of the Government’s decision not to allocate a fourth look-alike commercial television licence, I think they miss the point.

The Government will allocate two new TV licences next year, one could enable new in-home digital services delivered over your ordinary television and the other that could be used for more innovative new services that may include mobile TV.

Channel A and Channel B respectively provide a very real opportunity for exciting new services to emerge that will not be just the same as the free-to-air services we can already access.

However, the allocation process for these channels is complex and requires careful planning.
ACMA has commenced preparation for this process and the allocation of the licences will take place next year.

We want to deliver new and different services to consumers during the transition to digital to help make the viewing experience more interesting.

So the Government has also lifted the genre restrictions on national broadcaster multi-channels, giving the ABC and SBS the chance to make full use of their extensive and valuable archive material.

From 1 January 2007 the commercial free-to-air broadcasters will be permitted to show content on one high-definition multi-channel and they can add to that with a standard definition multi-channel from 1 January 2009.

And at switchover or before should technical advances or unanticipated delay in getting to switchover occur, we will revisit the issue of the lifting the remaining restrictions on multi-channelling.

In the meantime, over the next few years there is the likely opportunity that Australian consumers will have access to up to eight new in-home channels, up to 30 new channels on mobile TV and up to five digital multi-channels and even more from 2009.

Access to these new services will assist greatly in encouraging Australians to take-up digital television.

Switchover Date

Even though we now have around 23 per cent of Australians with free-to-air digital, clearly take-up is not at a stage we could contemplate meeting the original dates for switchover.

Digital switchover was originally scheduled to occur in Brisbane, Sydney, Melbourne, Adelaide and Perth on 31 December 2008 and in regional areas on either 31 March 2011 or 31 December 2011.

But with a comprehensive plan for the transition to switchover and new services to entice Australian consumers to make the switch we can have a realistic and achievable target of 2010-2012.

A firm and final timetable for digital switchover commencing between 2010 and 2012 will be a valuable incentive for broadcasters to complete digital roll out and for viewers to make the transition to digital.

The simultaneous transmission of analogue and digital signals, while essential for a smooth transition to digital television, is expensive for broadcasters and taxpayers.

It is also an inefficient use of spectrum, which could be reassigned for other broadcasting and communications services such as wireless broadband, mobile TV and digital radio.

Comparable countries around the world are finalising their digital television switchover timetables and both the US and UK have already realigned their original switchover dates.

In the United States, for example, switchover is set for 17 February 2009.

In the United Kingdom, switchover will occur progressively in the period 2008-2012 and Germany expects switchover to be completed by 2010.

By broadly aligning Australia’s switchover date with the rest of the developed world, we are in a good position to take advantage of the knowledge and experience of countries that have already commenced on the path to switchover.

Therefore as part of the Digital Action Plan ACMA will be asked to report back to me as soon as possible with an analysis of the technical and other factors which may influence a timetable for switchover in Australia.

The Government will then announce a firm timetable for digital switchover as soon as practicable next year, including consideration of whether the switchover should be done region by region, or nationally.

Digital Australia

Getting to digital switchover will require concerted action on behalf of the industry, manufacturers, Government and the regulator.

To coordinate our transition to digital and to implement the Digital Action Plan, a dedicated switchover body – Digital Australia - will be established at a cost of more than $17 million over four years.

Digital Australia will be based in Sydney and set up as soon as possible.

To ensure close collaboration between Government, the regulator and industry, Digital Australia will be a dedicated body under the auspices of my department.

Digital Australia will provide a clear focal point for all Australians wanting to know more about digital switchover, when it is occurring and how it is being managed.

Digital Australia will educate Australians about the benefits of digital television to help drive take-up and inform consumers about the need to convert to digital transmission as switchover approaches.

It will identify sections of the community which may have special needs in the lead-up to switchover and co-ordinate efforts to meet those needs.

And Digital Australia will harness the expertise of industry in the switchover process. Broadcasters, receiver importers, antenna installers and retailers will all be called upon to participate.

ACMA’s current roles in terms of regulating industry, administering digital conversion schemes and spectrum management and other technical matters will continue.

Importantly, ACMA will focus on assessing digital signal coverage and will begin working on the availability and possible use of spectrum following switchover.

Industry Group

The success of the Digital Action Plan will also rely on close collaboration with and cooperation within the industry.

In recognition of this, the Government will appoint an industry representative group to advise the Government and Digital Australia in its work.
As with Digital Australia, we will set-up the industry group as soon as possible to guide our transition to digital.

I expect to make announcements about the make-up of the industry group and the senior management of Digital Australia early next year.

Educating consumers about digital

A key role for Digital Australia and industry will be educating consumers about the switch to digital.

Among the general population, there seems to be a relatively modest level of understanding of digital television and the impending switchover.

This, combined with the higher sales of analogue television receivers compared to digital units, suggests that consumer knowledge is a significant barrier to digital take-up.

In addition, many consumers may need access to detailed information about the roll out of digital services, aerial and cabling issues, interference issues and where to go for technical support.

It is therefore vital that comprehensive and extensive education campaigns for digital television be developed to increase consumer confidence and help drive digital take-up.

The development of these campaigns will be a task for industry and Digital Australia.

Labelling receivers

These public information and education campaigns will be complemented by a consistent and easily-understood system of digital receiver labelling.

Every weekend across Australia consumers are wandering around electrical stores buying television equipment they think will last them for years and years.

Now the switch to digital does not make your analogue television obsolete, but clearly consumers must be informed that to continue to receive television in the future they will need to buy a set-top box or a television with an in-built digital tuner.

Mandatory labelling at point of sale will help consumers to examine digital television issues more closely when making their next television or home entertainment purchase.

In the UK as part of their transition to digital a digital tick sign of approval for equipment was implemented.
There is currently no industry-wide labelling scheme for digital television and related digital devices.

I acknowledge the joint initiative in 2002 of the Australian Electrical and Electronic Manufacturers’ Association and the Consumer Electronics Suppliers Association in publishing the Digital Television Marketing Code.

However, this code is not aimed at providing advice to, or raising the awareness of, consumers about digitisation, switchover, and the limitations of analogue equipment.

The Government’s media reform legislation gives ACMA the power to oversee the development of industry codes of practice.

This will enable the creation of a labelling scheme which, in the first instance, would be a code of practice registered with ACMA.

I look forward to industry working with ACMA in developing this code for the labelling of digital television reception equipment.

Testing and conformance

The Australian Government has previously committed to working with industry to set-up a digital testing and conformance centre.

Government leadership in this area, along with industry assistance, will ensure that appropriate testing of digital signals and receivers takes place and that consumers can feel assured that their digital equipment will function effectively during its normal lifetime.

A range of physical equipment will be needed for such a centre, together with an appropriate operational plan that would ensure the facility is self-supporting and sustainable.

Given the range of possible options, my Department will undertake further work to inform decisions about its set up, and to bring industry participants to agreement on the form and function of a testing and conformance centre.

Survey and research work by ACMA

The Digital Action Plan will need to be informed by changes that occur in the marketplace and be able to respond to issues that arise for consumers and industry as we head towards switchover.

The Government will provide ACMA with $5.6 million to conduct research and monitoring tasks that will contribute to a faster and smoother transition to digital television services.

ACMA will also undertake research to better understand technical impediments to digital television take-up and to investigate other issues such as improved measurement of digital signal coverage and the performance of digital receivers.

I mentioned earlier that ACMA will commence work on issues associated with the return of analogue spectrum at the end of the simulcast period.

Community television

The Government has committed to working with the community television sector as it makes the transition to digital as part of the Digital Action Plan.
The sector is being encouraged to explore options for a simulcast arrangement with a digital platform operator.

However, should no opportunity for a simulcast arrangement materialise, prior to digital switchover, the Government will consider the allocation of the Channel 31 analogue channel, for digital services.

This allocation will be made with a “must carry” requirement including as a condition of the allocation, digital community television services must be carried on that spectrum.

Analogue community television services would then cease and community television broadcasters would operate in digital mode.

In the meantime, to prepare the sector for digital broadcasting the Government will also introduce into the Parliament any necessary legislative amendments to ensure that community television licensees are authorised to operate in digital mode.

Assistance to transition to digital

Inevitably, some Australians may find it difficult to make the switch to digital – due to either personal circumstances or geographic location.

One of Digital Australia’s most important tasks is to ensure that all Australians can access the benefits of digital television.

The analogue signal cannot be switched off in an area until everyone has access to the available digital signal.

Digital take-up in Australia has not yet reached a level where the number and demographic of households who require extra help is apparent.

However, until that level of understanding is reached, Digital Australia will be prepared to provide information and support to communities and individuals who may find the switch a little more challenging.

The Government will also keep a close eye on digital take-up and will discuss with Digital Australia how best to assist those who by reason of age, disability or some other circumstance may be struggling to convert to digital.

The Government will continue to look at ways to ensure that as switchover draws near, no Australian household misses out on this exciting digital transition.

Closer to switchover

A range of issues will therefore need to be considered over the coming years as digital take-up increases.

These include the conversion of self-help retransmission facilities and whether there is a need to address digital reception black-spots in advance of analogue switch-off.

These issues will be addressed within the framework of the Digital Action Plan, as digital conversion progresses.

The media reform package also includes a number of statutory reviews over the remainder of the simulcast period which provide an opportunity to revisit some regulatory settings in light of the progress of the Digital Action Plan.

These include the ongoing rationale for and operation of the anti-siphoning scheme; the regulation of content on commercial broadcaster multi-channels; and the future allocation of commercial television licences and the move to full multi-channelling.

Digital switchover provides a natural point for the Government to take a look at these policy settings and consider opportunities for more new services for consumers.

Conclusion

Broadcasters, manufacturers, retailers, antennae technicians, Government and television viewers all have a stake in digital conversion.

The Digital Action Plan I am launching today provides the framework for a managed transition and achievable timetable to digital switchover, and for the coordination and participation of all stakeholders.

This is an exciting time in the history of television in Australia.

As we head towards digital switchover in 2010-2012 we will all have a role to play.

But I can assure all Australians that no-one will be left behind as we all take part in the exciting evolution of television. Thank you.