- Background to Submission
The New Zealand Television Broadcasters' Council (TBC) represents the common interests of
its members, the majority of the national free to air (FTA) broadcasters. The members of the
TBC are TVNZ, MediaWorks TV and Maori Television (MTS).
The TBC's members have a strong interest in the development of a digital television platform
that will provide the opportunity for a wide range of FTA television channels. This will provide
viewers with more options at no direct cost to them and will provide advertisers with more
options to target their clients and potential clients.
The increased bandwidth needed for High Definition (HD) and 3D broadcasts will also need to
be provided for in the final spectrum plan.
We support the concepts of efficient spectrum planning and implementation and recognise
the strong possibility of a "digital dividend" to the government if excess spectrum is created
through efficient planning.
The planning taking place will set the parameters for the operation of television and other
telecommunications platforms for the foreseeable future, likely fifty years or more. For that
reason, we will be taking an extremely long term view of the spectrum needs of the television
industry in this submission.
- Assumptions
Several assumptions will need to be made about the growth of the television industry and the
capacity each channel will require. Twenty one years ago, New Zealand was served by two
FTA channels, TV One and TV2. Currently, there are eleven national terrestrial services with
an additional service committed to by MediaWorks for early next year and many more
regional services currently operating. Three of these services are HD; TV One, TV2 and TV3,
but a significant amount of television production is being done in HD, and consumers are
buying HD sets in greater numbers. It is quickly becoming the standard for broadcast
television, so it is reasonable to assume that all of the existing national services will become
HD in the not too distant future. It should also be assumed that any new entrants will either
launch in HD or will have plans to move to HD in the medium term.
In the past two years there has been considerable growth in 3D technology. So far this has
been limited to cinema viewing, but Sony has recently announced the release of the first 3D
consumer television, which will at first be used by "gamers" to experience 3D on their Sony
PlayStation games. But with content now being produced in 3D it is reasonable to expect that
at least the major channels will develop plans for 3D transmission in the next few years.
Trends in broadcasting suggest that, in the future, broadcasts will have more consumer
options available, such as multiple languages and closed captioning for the hearing impaired
or for translation purposes to other languages. These options will all add to the bandwidth
required for each television service. The capacity assumptions made in the rest of this
submission assume any HD or 3D signal will also have the bandwidth to carry three languages
of audio and closed captioning in one language.
The cost of entry into the business of television is falling rapidly. The transmission and
playback equipment is a fraction of what it was only a decade ago and, with the increase in
niche channels worldwide, programme supply is increasing exponentially and that suggests
there will be the potential for new entrants into the industry, along with the likelihood of
existing operators adding new channels. As advertisers demand more precise targeting of
their audiences, niche channels will provide the television industry with a way to reach those
targeted audiences and allow FTA television to continue to experience advertiser growth.
Although the size of the New Zealand market will always limit the choice in mass media, the
population will not likely remain static. Statistics New Zealand projects that the country will
reach five million within 20 years and Auckland will be a city of 1.93 million. More population
means an increased ability to sustain more FTA broadcasters.
- Capacity Analysis
The proposal from MCH contains 22 channels of spectrum in the UHF band, each capable of
handling about nine Standard Definition (SD) signals. That suggests a possible universe of 198
broadcast services, which would seem to be very generous indeed. Of the 22 channels, 12 are
full national coverage, the others are for urban areas only. There are also two guard band
channels, one each at the high and low end of the spectrum, for a total of 24 channels.
Each national or urban licence requires two channels, one for main service and one for infill,
so there are actually only 11 or 12 licences available, or a total of up to 108 SD services. Note
that Kordia is shown on the MCH plan as having three licences, but no infill on two of them.
In discussion with Kordia, we are informed that they have infill licences in place that can be
used with the two full coverage licences so, under certain conditions, 12 national licences
should be available.
Using the assumptions in point B, however, reduces the number of services accommodated
substantially. Each HD service takes about three times the bandwidth of an SD service, and
3D adds another 10% onto the bandwidth requirement of an HD service. That means each
channel of spectrum could handle two 3D HD services or three HD services, a total of 36 HD
services or 22 3D HD services.
If we look at the proposed 12 licences, and assume that four of the existing FTA services will
be 3D HD and the other eight will be HD, five national licences will be required.
Of the 12 licences, five are leased to SKY, one to TVNZ, one to MediaWorks, three to Kordia,
one to NZRB and one to the Crown which is unallocated. It is clear from the above analysis
that the existing national FTA broadcasters have just enough spectrum capacity to move their
existing services to HD or 3D, as only five licences are available for general use; the rest are
controlled by the Crown, SKY or NZRB. That makes no allowance for new services that may
want to enter the market. Should SKY decide to not renew some of the frequencies currently
in use for its UHF service, those frequencies would provide expansion capability for FTA
television. If SKY should determine it wishes to retain the licences, that expansion capability
is much less certain. It cannot be assumed that they will join the pool of FTA broadcasters
beyond providing Prime on a FTA basis. In fact, it is likely in their interest to ensure that the
frequencies are used for anything but FTA, as more FTA choice weakens the SKY proposition
and could harm their Pay TV business.
That leaves open the question of what uses would be permissible with the licences in Blocks A
and B. Since the government is including the SKY licenses in the television block, it follows
that all owners of such licences should be required to use them primarily for the propagation
of FTA television signals.
To summarise, the plan has assumed five licences to FTA operators and Kordia, and those
licences can accommodate a total of 15 HD signals, or nine HD and four 3D signals. Without
some form of control over the use of the other licences, the FTA capacity in New Zealand will
be constrained at those numbers. There is even some doubt that Kordia would use all of its
licences for FTA television, as other options exist in the mobile broadcast area.
RECOMMENDATION #1:
In response to questions 13 and 14, we recommend that all 12 licences (and any additional
that are provided for) be regulated so as to require FTA services as the primary use on each
licence and that each frequency is filled to reasonable capacity within two years of Digital
Switch Over (DSO). Should the frequencies not be so occupied within that time period, the
licences should revert to the Crown, which should then auction them off or hold them for
use exclusively by new or existing FTA operators.
- Use of Guard Band Frequencies
The guard bands at the top and bottom end of the television spectrum are provided to avoid
interference between television signals and other users in adjacent bands. We would suggest
that a good use for those bands would be as low power infill. That would provide a much
lower risk of interference with adjacent spectrum due to the low power and limited range of
the transmission used for infill and could possibly make available another national frequency
that is currently planned for infill use only. We believe it could be possible to get as many as
14 national licences out of the existing allocated spectrum with proper use of the guard band
frequencies.
In order to use these frequencies, there will need to be appropriate restrictions on the uses of
adjacent frequencies to avoid interference. If those restrictions can be applied, this would be
a feasible way to expand the frequencies available for use by FTA broadcasting.
RECOMMENDATION #2:
That channels 25 and 48 on the UHF spectrum are used as low power infill channels in order
to free up more national licences for general FTA television allocation and that appropriate
restrictions are developed for adjacent frequencies to allow this to happen without undue
interference. If the guard bands cannot be provided as interference free, then other
options such as adding more spectrum to the proposed television Block A should be
pursued.
- Maori Television Spectrum
The MCH discussion paper recognises the review of the Maori Television Service Act 2003
which has put forward several recommendations relating to the management rights held by
MTS. Those include the preservation of the Management Rights to four channels of spectrum
which could equate to two national sets of frequencies (two main sets and two infill sets).
That is in conflict with the proposal which appears to suggest only one national set of
frequencies. If the government continues to recognise the management rights of MTS to two
national sets of frequencies, the proposed plan will come under further stress, as MTS has not
been allocated any sets of frequencies under the plan and the Crown is retaining only one set,
which could possibly be allocated toMTS. This issue clearly needs resolution before a final
plan can be reached.
RECOMMENDATION #3:
That MTS management rights be resolved with government prior to any final development
of the spectrum plan.
- Rural Broadband
The discussion paper suggests two frequency blocks be reserved for rural broadband, and
provides a portion of the television spectrum for urban areas only.
We suggest that the use of spectrum in that way may not be wise. It is not possible to fully
predict population shifts in New Zealand in coming decades. If, as a simple example, mining
exploration should be successful in finding unexpectedly large scale deposits of valuable
mineral in a lightly populated area, a city and surrounding towns could develop to such an
extent that broadcasters might feel it is commercially feasible to extend coverage to the area.
If the frequencies were not available due to development of rural broadband in that area, the
area could be disadvantaged by not having access to as many FTA signals as it otherwise
would have.
RECOMMENDATION #4:
That Blocks A and B as designated in the MCH plan be combined into a single Block A for
core television use.
- Transition Costs
To achieve the most efficient use of bandwidth, and therefore the greatest possible digital
dividend, many existing broadcast frequencies may need to be changed. There will be costs
associated with this and, while these have not been identified at this time, it would seem a
logical principle that either the government or the purchasers of the new licences in the block
identified by MCH as Block D (694 – 806 MHz) should be responsible for those costs. These
costs could include the actual work in altering the frequencies, the planning time required to
determine what changes will need to be made, any consumer education that might be
required and any other costs associated with the actual changing of frequencies.
RECOMMENDATION #5:
That costs for frequency changes required for the efficient use of spectrum are the
responsibility of either the government or purchasers of frequencies in Block D.
- Regional Television
Currently, regional television stations operate in many areas of the country. Those within the
geographic areas of Digital Terrestrial Television (DTT) coverage have an option to switch to
digital transmission, but those outside the current DTT coverage area will have fewer options once digital switch over occurs.
While regional broadcasters have a very loyal following, most deliver an extremely limited
audience. To provide access for all of these channels to either satellite or expanded
terrestrial digital transmission coverage would be cost prohibitive. The TBC view is that
regional broadcasters should not receive preferential funding agreements from NZ On Air or
other government agencies, but that government funding be considered to expand the
coverage area of the current DTT signal, which would take in more of the existing regional
broadcasters, giving them a digital option, reducing the problem and providing more of the
general population with access to the more robust DTT system.
Another option that is available to regional broadcasters is the use of vacated VHF spectrum
once DSO is completed. There has been no identified use for this spectrum so it would seem
feasible that some regional broadcasters could use VHF analogue delivery in their local areas.
If this option is to be developed, some restrictions to ensure that the frequencies are not used
for mass audience broadcasters would be necessary so as not to thwart the switch over
process.
RECOMMENDATION #6:
That the limited resources available through NZ On Air and other government funding
agencies not be used to provide subsidies for transmission costs of regional broadcasters,
but Kordia be encouraged to provide regional spectrum where available to enable those
regional broadcasters within the DTT area to make the digital transition.
RECOMMENDATION #7:
That government consider the benefits of expanding the existing DTT network to reach up
to 87% of the population, and that VHF frequencies be considered for use by those regional
television stations that are outside the DTT coverage area.
- In Closing
The spectrum planning that is occurring currently will affect all New Zealanders for decades to
come. Not surprisingly, the planning is occurring with no input from the general public, the
end users of the spectrum, as most people have little knowledge or understanding of the
technical issues being dealt with.
That being said, we must all keep the public at the front of our minds when making these
decisions. They are decisions that future generations will get the benefit of (or pay the price
for).
Public benefit must be considered in the widest possible context, not only the immediate
financial return to the government, but what the likely best outcome for the public will be in
terms of services offered.
The TBC and its members remain committed to efficient use of spectrum and the expansion
of FTA services within New Zealand, for the benefit of all New Zealanders. We support the
government ministries in this process and remain willing and able to provide further input
and assistance as appropriate.
