Beyond switchover—the future technical evolution of digital terrestrial television in AustraliaReport on submissionsOCTOBER 2012

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Executive summary 1

Meeting the challenge of ever-improving technical standards 2

Technological innovation issues 8

Technological migration options 16

acma | iv

Executive summary

This document is a summary of submissions to the Australian Communications and Media Authority (ACMA) in response to its discussion paper Beyond switchover—the future technical evolution of digital terrestrial television in Australia.

The views expressed in the submissions are presented against the set of questions the ACMA posed in the discussion paper. The ACMA believes the summary gives an accurate overview of the submitters’ positions on the issues raised in the ACMA’s questions. While many submissions answered the questions raised directly, some provided opinions. This approach makes it more difficult to identify responses to key issues. The ACMA has analysed those submissions to give what it believes is a fair and accurate representation of responses to the issues raised in each of the questions.

The ACMA recommends that readers refer to original submission documents, using the pages cited in the footnotes, if they wish to access the full context of the quotes provided. The submissions are available on the ACMA’s website.

The ACMA acknowledges that the discussion paper and the feedback provided to questions and issues raised in that paper marks a beginning to its engagement with the prospect of future digital terrestrial television broadcasting (DTTB) technical evolution and transition. Further consultation and analysis will be necessary to any ACMA strategy with regards to new technical standards for the DTTB platform.

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Meeting the challenge of ever-improving technical standardsThe first section of the discussion paper was concerned with whether the ACMA, as regulator, should do anything to meet the challenge of ever-improving DTTB technology.

The paper requested that submissions address several questions about the ACMA’s activities within the broadcasting technical standards space—both in the sense of specific standards and in a more general sense of what principles the ACMA should apply to introducing any new standard. Submitters were also asked to comment on the discussion paper itself.

Q1. Should the ACMA do anything to meet the challenge of ever-improving technical standards?

Responses largely advocated a more active, ongoing ACMA presence in the standards space. Although, as should be expected, opinions varied as to the nature the ACMA presence should take.

Telstra, FOXTEL, Sony and Consumer Electronics Suppliers Association (CESA) promoted the ACMA facilitating interactions and discussions within industry:

The main focus of the ACMA should be to facilitate and communicate.1

(W)e do think that the ACMA should adopt an approach of guiding and supporting industry to develop standards.2

ACMA should have a major role in guiding and facilitating standards directions in Australia and the process should not be left to the market.3

(W)e would prefer that the ACMA host and participate in the discussions between broadcasters, suppliers and other stakeholders.4

In addition to supporting the position ‘that the ACMA establish an industry working group as a priority’5, the Ai Group proposed that the ACMA support the August 2012 redevelopment of the receiver standard—‘(t)he ACMA and Government could assist by providing support for that proposal to underscore that the standard has a positive Net Benefit for the Australian community.’6 FOXTEL submitted that the ACMA consider funding standards development—‘support for Standards Australia from the ACMA could include identifying and encouraging relevant stakeholders to participate in standards development and providing funding for the development of DVB-T2 documentation’.7

1 Telstra submission, p. 4.2 FOXTEL submission, p. 7.3 Sony submission, p. 3.4 CESA submission, p. 2.5 Ai Group submission, p. 9.6 Ai Group submission, p. 7.7 FOXTEL submission, p. 8.

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Media Access Australia (MAA) and Alan Hughes suggested that the ACMA conduct its own research and develop its own standards expertise:

MAA sees value in the ACMA undertaking further research into the advancement of receiver technology, the levels of MPEG-4 capable receivers already in the market and estimates of how this might change over time, based on current consumption patterns and the new generation of receivers being developed.8

The Australian Broadcasting Control Board used to inspect broadcasters and monitor the technical quality of transmission. This provided a pool of people who were technically competent on the newest techniques and aware of the issues which reduce quality and cause interference. […] (t)he ACMA […] needs to regain this level of technical expertise. This will mean that they can evaluate new technical standards in the Australian environment.9

Alan Hughes, Australian Broadcasting Corporation (ABC) and Australian Communications Consumers Advocacy Network (ACCAN) suggested regulatory intervention and mandating technical standards:

In any future transition to next-generation DTTB technologies, the ABC would welcome the ACMA using its powers under section 130B of the Broadcasting Services Act 1992 to impose well-defined and enforceable minimum receiver standards by way of a legislative instrument.10

ACCAN recommends that the ACMA use its regulatory powers to encourage the adoption of next-generation digital terrestrial television broadcast technologies to ensure that all Australia’s FTA broadcasters have the capability to provide essential assistive services to all Australians.11

Other responses more generally on ACMA action, called for the provision of adequate (additional) spectrum so that the digital terrestrial television (DTT) platform could develop technically and provide the range of services required by viewers to maintain the viability of the platform:

While it is acknowledged that spectrum allocation is a matter for government, the ACMA’s role in advising the government on spectrum issues means that it is appropriate for it to consult on these issues, develop a position and advise the government accordingly. To facilitate testing of any new platform and service standards, Free TV recommends that the currently unallocated sixth 7MHz DTV channel (Channel A) be immediately reserved to provide space for testing and field trials of new technologies.12

Some suggestions, such as the reworking of multiplex licensing to allow shared and managed multiplex, would require legislative change.

Broadcast Australia (BA) suggested that the ACMA undertake its own program of end-user preference research to be informed of the type of DTT platform sought by viewers.13

8 MAA submission, p. 3.9 Alan Hughes submission, p. 5.10 ABC submission, p. 5.11 ACCAN submission, p. 4.12 Free TV submission, p. 4.13 BA submission, p. 6.

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In summary, there was some leaning towards the ACMA using its codes and standards powers and taking an interventionist approach to determining the technology choices made in Australia. This approach would need to meet statutory criteria for the ACMA to exercise its powers. The ACMA’s role includes facilitating the development and deployment of new, innovative technologies that provide consumer benefit. The ACMA does not have a mandate to direct the advancement of a technology merely to safeguard its implementation.

Predominantly, however, the emphasis of respondents was on the importance of the ACMA supporting the development and implementation of industry standards. Respondents noted that the ACMA has a significant role in facilitation and communication and this is expected to ensure that safeguards are inherent in the standards development processes. Early and effective engagement decreases the need for later intervention and allows standards utilisation to meet social policy objectives and decreases implementation costs to industry.

Q2. The approach and scope of this discussion paper.

Those submissions that addressed the question of the paper’s scope suggested that the discussion paper was too narrowly focused on terrestrial television broadcasting and would have benefitted from examining the provision of television content through other platforms such as satellite, cable and on-line (IP):

(W)e are disappointed that the scope of the discussion paper is limited to future technical standards for existing terrestrial broadcasting services. Consideration of digital television technical standards should be informed by broader considerations of future broadcast spectrum use.[…] We acknowledge the need for the ACMA to consider the more immediate issue of the new DTTB standards however we consider that there is scope for the ACMA to consider the longer term implications of IPTV and LTE for broadcast delivery of television.14

The ACMA consideration of television standards needs to take a holistic view of the television platform and device ecosystem, noting that consumer demand will be shared across many platforms and devices in the future. It also needs to take account of the NBN and mobile environments, and the reality that viewing devices are becoming more flexible and are no longer necessarily tied to a single platform or service.15

BA thought the paper too narrowly focused on the MPEG-4 and DVB-T2 standards:

The scope should be widened to deal with any future technology developments that may warrant consideration for deployment, not only AVC (MPEG4) and DVB-T2 that have been referenced in the paper.[…] Having a framework that is neutral in terms of technology will both make it flexible, future proof, and give certainty in planning for services using new technologies for stakeholders.16

14 ASTRA submission, pp. 2–3.15 Telstra submission, p. 5.16 BA submission, p. 9.

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Q3. Are there principles that should be codified in regard to regulation of technical migration, within the framework set by the principles for good regulatory process? What factors should these principles consider?

Most responses identified the efficient use of spectrum as an important principle. Spectrum efficiency was understood in two senses. One sense was as allowing spectrum to remain unencumbered and therefore available for allocation for non-incumbent uses:

These principles should be based on the ACMA’s existing spectrum management principles, which focus on efficiency and moving spectrum to its highest value use.17

As the switch to digital broadcast has seen a growth in the number of services offered and the resulting near-capacity use of available spectrum, it is important that the management of current available spectrum be used in the most efficient manner.18

The growth in demand for mobile and wireless applications has led to a large increase in the demand for spectrum over the last decade and this trend will only increase. This creates pressure on incumbent users, such as broadcasters, to demonstrate that they are using spectrum efficiently and delivering high value services to end users.19

Planning for technological migrations should aim to […] (e)ncourage the development and availability of new technologies and services.20

The other sense was that incumbents could use their own existing allocations more efficiently through new technical standards, thereby facilitating introduction of their own new and/or innovative services:

For SBS, the availability of new technologies that will allow it to enhance its services and provide them more efficiently and effectively provides a compelling argument for their uptake.[…] It is important that broadcasters have the ability to use their spectrum in the most appropriate and efficient manner. Broadcasters should be able to allocate spectrum dynamically and flexibly according to the content and changing audience preferences.21

Policy should be adopted that facilitates the introduction of innovative new services while not compromising principle 2 (above).22. Milestones for consumer device minimum penetration, minimum time in market and measurement of these should be developed and codified.23

Whether the ACMA intervenes in this process or not, we believe it must be proactive in assessing and facilitating opportunities for introducing AD services wherever technical advances provide bandwidth savings.24

17 FOXTEL submission, p. 10.18 ACCAN submission, p. 4.19 Ai Group submission, p. 4.20 Ai Group submission, p. 6.21 SBS submission, p. 2.22 Principle 2 is ‘Consumer disruption must be minimised and consumer investment in reception equipment must, within reason, be protected.’ BA, p. 9.23 BA submission, p. 10.24 MAA submission, p. 3.

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In order for broadcasters to increase services both mainstream and assistive, efficiencies in the use of current spectrum allocations will need to be found.25

Maintenance of present quality of the DTT platform was referred to by BA and Free TV (who also argued for support for the ongoing primacy of the platform).

Existing transmission quality standards should not be compromised—any transition to new technologies should not materially reduce service offerings in terms of range or technical quality to the consumers using a legacy technology during or after technology transition.26

The service is free for all Australians, providing valuable public goods such as access to news and current affairs, as well as an investment in the production and distribution of a diverse range of quality Australian content. The maintenance, improvement and future accessibility of these services should be central to the ACMA’s consideration of these issues.27

Minimising disruption, either to consumers or to industry, was also a concern in several submissions including the submission from BA.

Consumer disruption must be minimised and consumer investment in reception equipment must, within reason, be protected. The benefits to the consumer, who will have the largest investment in any legacy technology […] private citizens have already spent in excess of $16 billion, and are estimated to spend another $7.5 billion on reception systems and equipment specifically designed to watch and record terrestrially radiated digital free-to-air television.28

A light degree of regulation was advocated by Telstra, Ai Group29 and BA.

Telstra is of the view that industry and market forces should drive technical migration and regulation should only be considered as a last resort. Telstra considers that the principles which the ACMA has already adopted in its Principles for Spectrum Management framework are adequate for dealing with any regulation of technical migration issues.30

Mandated consumer devices standards should be ‘light touch’ and should not distort otherwise natural market forces. However, for certainty of all in the industry (including broadcasters and consumers), there should be a clear and defendable evolutionary timetable.31

25 ACCAN submission, p. 4.26 BA submission, p. 9.27 Free TV submission, p. 2.28 BA submission, pp. 9–10.29 Ai Group submission, p. 6.30 Telstra submission, p. 5.31 BA submission, p. 10.

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One submission advocated heavier regulation in the form of compulsory standards and the use of simulcasting to encourage consumer take-up of new technologies—followed by cessation of simulcasting to further encourage late adopters to move across.32

Harmonisation with international standards was cited by Sony.

(I)nternational standards should be the basis for the development of Australian standards for DTTB. Harmonisation of standards should be a key objective of the standards setting process.33

32 Alan Hughes submission, pp. 6–9.33 Sony submission, p. 3.

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Technological innovation issuesThe second section of the discussion paper focused on the issues and challenges the technological evolution raises for Australian free-to-air television and whether there is pressure for change. This section examined the context within which technological change might occur—whether that might be the international development (and therefore the availability locally) of particular standards or whether it be the technological composition of the existing receiver population or the profile of the existing broadcasting chain.

Specific questions that submitters were asked to respond to included:

Q4. What issues technological evolution raises and whether there is pressure for change in Australia.

Consumer demand for new, innovative or additional services was mentioned by a number of submitters.

Consumer demand for innovative and higher quality services will remain an important driver of technological evolution.[…] The benefits of policy settings which encourage more efficient use of spectrum by FTA providers include enabling them to return excess spectrum to the market so that it can be allocated for new and innovative services.34

It is important that the technical capability to provide assistive services does not interfere with the provision of current services. The adoption of MPEG-4 alongside existing MPEG-2 technology on current multiplexes provides both community and industry benefits, allowing for the provision of new services over MPEG-4 while allowing current services to continue over MPEG-2. […] Therefore, it is ACCAN’s view that adoption of next-generation digital technologies such as MPEG-4 should be implemented in the near future.35

Telstra notes that consumers have a growing desire to view content in a non-linear fashion and at locations outside the home environment. Some are also seeking more content, higher definition content, and new services like 3D. These demands are creating pressure to progress the delivery of services over fixed and mobile broadband telecommunications networks and also to improve the capacity of over-the-air networks.36

For SBS, the availability of new technologies that will allow it to enhance its services and provide them more efficiently and effectively provides a compelling argument for their uptake. This includes providing more services that respond to the increasing cultural and linguistic complexity of Australian society.37

34 FOXTEL submission, pp. 3, 11.35 ACCAN submission, p. 4.36 Telstra submission, p. 5.37 SBS submission, p. 2.

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Other submissions placed the demand for new services within the context of the need to compete with other platforms:

In the general public interest it is vital that this delivery platform continues to represent a high value proposition to end users. Hence the platform needs to be able to

Increase the number of free-to-air television channels it carries as soon as practicable to enhance the entertainment and information utility Australians can derive from their unprecedented investment in digital terrestrial television reception systems and equipment.38

Planning for the evolution of these services must recognise the place of free-to-air terrestrial television services in Australia. Although there are a growing number of platforms for the delivery of audio-visual content, free-to-air television is the only service that does not require a paid subscription of some form. […] The service is free for all Australians, providing valuable public goods such as access to news and current affairs, as well as an investment in the production and distribution of a diverse range of quality Australian content. The maintenance, improvement and future accessibility of these services should be central to the ACMA’s consideration of these issues.39

The opportunity and the need to improve spectrum-utilisation efficiency were also cited in several submissions.

The growth in demand for mobile and wireless applications has led to a large increase in the demand for spectrum over the last decade and this trend will only increase. This creates pressure on incumbent users, such as broadcasters, to demonstrate that they are using spectrum efficiently and delivering high value services to end users.

As the Beyond Switchover paper observes, broadcasters’ current utilisation of spectrum has limited their ability to deliver new or higher quality services. This has implications for the availability of new types of services or service enhancements, such as 3D and audio description, the ability to offer new content or channels and broadcasters’ capacity to maintain service standards such as HD.40

Telstra also notes the ACMA comment on page 15 of the discussion paper that ‘the Australian situation of relative spectrum abundance is likely to have reduced the pressure for the augmentation of existing technical standards, compared to many other countries’. This is consistent with Telstra’s view that the current broadcasting spectrum policy regime is inadequate and does not provide sufficient incentive for broadcasters to use spectrum efficiently.41

FOXTEL supports the development of a policy and regulatory environment that encourages expeditious migration of Australian free-to-air (FTA) television providers to next generation platform standards.[…] Migration to these standards will enable FTA providers to increase spectral efficiency and potentially make spectrum available for other uses.42

38 BA submission, p. 3.39 Free TV submission, p. 2.40 Ai Group submission, p. 4.41 Telstra submission, p. 8.42 FOXTEL submission, p. 2.

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Additional spectrum for migration and the complexities of actually migrating were issues raised by BA.

Technological evolution also raises the issue of a lack of spectrum to enable both evaluation of technologies and technology transitions under the current regulatory approach. It is likely that some transitions will require existing spectrum license holders to share RF channels/multiplexes, at least during transition phases.43

The role of standards in addressing the legacy issue was referred to in submissions by CESA and BA.

The revised receiver standard need not be mandated but could be highlighted to suppliers so that they should seek to supply only products that meet the requirements of the standard to avoid the legacy issue.44

… any transition to new technologies should not materially reduce service offerings in terms of range or technical quality to the consumers using a legacy technology during or after technology transition. For example, given the significant investment by consumers, and their performance expectations, there should be no reduction in HD services from those available today.45

In addition to the comments on spectrum noted above and its agreement that product availability and consumer demand would drive change, the Ai Group also cited the development of new standards and the implications for the Australian market.

As a smaller consumer market, Australia’s approach to standards needs to be informed by international standards development and the adoption of technologies or technical standards in other markets. When Australian standards harmonise with international standards they allow for greater economies of scale in production by enabling common parts and specifications.46

MAA raised concerns that the inevitable complications involved in upgrading platforms should not disguise any existing capacity to introduce assistive technologies (such as audio description (AD)) now.

This issue of the extra spectrum required to provide AD has long been given by Australian broadcasters as a reason why it is not yet possible to introduce the service here. There seems to be considerable confusion about this, however. MAA has received advice that the bandwidth requirements for receiver-mixed audio description (which consists of the description track alone) are so minimal that they could be accommodated within broadcasters’ current multiplexes, but others disagree.47

43 BA submission, p. 10.44 CESA submission, p. 2.45 BA submission, p. 9.46 Ai Group submission, p. 3.47 MAA submission, p. 3.

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Q5. Whether Australia should be planning to introduce upgraded platform or service standards for DTTB, and if so:> which standards?> how quickly?> why?

Overwhelmingly, submissions supported the introduction of upgraded standards. Many supported adopting MPEG-4 (Alan Hughes, SBS, ACCAN, Sony, Ai Group, BA)—either as a sole implementation or in combination with DVB-T2.

Recent developments indicate that the market is ready to start transmitting services using MPEG-4. Other factors need to be considered in this equation, including receiver readiness, about which there appears to be limited information, and the mix of current services and the availability of appealing content that could drive take-up. SBS considers that it is better to start running MPEG-4 services as soon as possible in order to drive take-up.48

… it is ACCAN’s view that adoption of next-generation digital technologies such as MPEG-4 should be implemented in the near future.49

Currently, the combination of DVB-T2 and MPEG-4 described in the discussion paper represent the most plausible near-term migration path for DTTB in Australia.50

Sony recommends that ACMA start planning now for the introduction of new platform standards for DTTB, commencing with MPEG-4. The intention should be to introduce MPEG-4 by 2014 …51

Priority should be given to working out a transition path to MPEG-4 as this is the platform standard for which there is the greatest maturity from a standards perspective and also the greatest market readiness in terms of consumer equipment penetration.52

Given the already high penetration of compatible devices, the transition to AVC (MPEG4) should start as soon as possible. The 6th mux should be allocated now, for implementation in 2014, post DSO.53

Estimations varied about when the implementation of new technologies (in particular MPEG-4) should occur.

SBS considers that it is better to start running MPEG-4 services as soon as possible in order to drive take-up.54

Ai Group strongly recommends that the first priority in any transition should be a migration to MPEG -4 (H.264 /AVC). This is the most mature of the platform standards discussed in the Beyond Switchover paper and the standard for which there is the greatest market readiness from a consumer perspective.55

48 SBS submission, p. 2.49 ACCAN submission, p. 4.50 ABC submission, p. 1.51 Sony submission, p. 3.52 Ai Group submission, p. 2.53 BA submission, p. 12.54 SBS submission, p. 2.55 Ai Group submission, p. 6.

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Given the already high penetration of compatible devices, the transition to AVC (MPEG4) should start as soon as possible. The 6th mux should be allocated now, for implementation in 2014, post DSO.56

‘Sony recommends that ACMA start planning now for the introduction of new platform standards for DTTB, commencing with MPEG-4. The intention should be to introduce MPEG-4 by 2014 and not wait for further developments with respect to H.265 (HEVC).57

Telstra concurs with the ACMA view that any changes to “over-the-air” digital terrestrial television standards that might negatively impact the success of the digital switchover and restacking work programme should be deferred until after this work is completed.58

We do however acknowledge that at some time in the future, the broadcasters will want to and should be allowed to introduce changes to platforms and service standards. We are not sure that this needs to be regulated by the ACMA but could perhaps be accommodated by an agreement between broadcasters and receiver suppliers (and the ACMA?) that no change will be made to broadcast specifications before a certain date, for example 3 years time, and taking into consideration time for re-stacking and reconfiguration of multiplexes to accommodate new technologies. In the mean time, the receiver standard should be updated to provide all of the possible changes agreed to by broadcasters and receiver suppliers that may occur with their respective recommendation level, together with a time-line.59

There was also support for DVB-T2, although submissions favoured a delay pending further work on implementation and market developments.

A transition to T2/HEVC should happen as soon as the market is ready. […] in 2025 all muxes could start a transition to T2/HEVC, being able to offer new HD+ and other services to “pull” consumers. By 2030, a full transition to DVB-T2/HEVC should be able to be completed.60

DVB-T2 is at a less developed stage than MPEG-4, from both a standards and consumer product perspective. Ai Group recommends that a migration to DVB-T2 is addressed separately from the transition to MPEG-4.61

Based on previous broadcast cycles, SBS estimates that an appropriate time to commence transition to DVB-T2 will be around 2015 to 2020.62

56 BA submission, p. 12.57 Sony submission, p. 3.58 Telstra submission, p. 3.59 CESA submission, p. 1.60 BA submission, pp. 12–13.61 Ai Group submission, p. 8.62 SBS submission, p. 4.

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Telstra cautioned on focusing on MPEG-4 and DVB-T2, in the context of the continuing switchover and restack.

Telstra notes that MPEG4 and DVBT2 are likely to be regarded as legacy standards by the time the digital television restacking work is completed. Therefore industry should seriously consider the opportunity to “leapfrog” these standards and move to the next generation of standards.63

Free TV favoured testing a number of service standards still under development (3D TV and UHD), but argued against the introduction of AD technologies as part of a wider technical-migration process, or at least until after a further review in 2014. AD technologies were strongly supported by MAA.

Audio description is therefore an established service on television internationally. It does not require advances in broadcast technology to operate. MAA is concerned that the discussion paper portrays audio description as a form of ‘enhancement’ that is discussed in the same category as 3D TV and other options, rather than the vital access service that it is. It further suggests that AD may need MPEG-4 or DVB-T2 to make it feasible.

This issue of the extra spectrum required to provide AD has long been given by Australian broadcasters as a reason why it is not yet possible to introduce the service here. There seems to be considerable confusion about this, however. MAA has received advice that the bandwidth requirements for receiver-mixed audio description (which consists of the description track alone) are so minimal that they could be accommodated within broadcasters’ current multiplexes, but others disagree.64

… we maintain our view that whilst both captioning and audio-descriptions are services that seek to improve access to electronic media for people with a sensory disability, these services raise quite distinct issues for television broadcasters, regulators and users. They should not be dealt with as part of this process.65

BA supported the consideration of standards still under development—in particular advocating a future DVB-T2/HEVC combination following an interim DVB-T/MPEG4 stage.66 BA also argued that any future standards framework should be capable of accommodating a FOBTV (i.e., global) standard.67

One submission supported requiring the use of native 1920x1080 HD (as opposed to 1440x1080) programming across the entirety of broadcasters’ primary channels.68

Most submissions did not explicitly respond to the underlying question of why a new platform or service standard might be desirable or necessary. To some extent, views on this question can be inferred from responses to question four—such as the attraction (to both viewers and broadcasters) of new offerings.

63 Telstra submission, p. 3.64 MAA submission, p. 2.65 Free TV submission, p. 8.66 BA submission, pp. 12–13.67 BA submission, p.12.68 Alan Hughes submission, p. 11.

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BA inferred that there had been considerable investment by the industry and consumers in the current FTA platform. It noted that it was incumbent upon the government to put in place the conditions that allowed the platform to evolve including adopting new standards. BA put forward a prospective timetable for implementation that would give broadcasters the opportunity to make new types of services available.

Q6. Whether the ACMA should consider any other technical standards than those canvassed in this chapter.

The following technical standards were nominated:> DVB-T2 Lite (offering lower-resolution broadcasting to handheld devices) (Alan

Hughes)> A move to progressive rather than interlaced scanning (at the same time as

services were made MPEG-4) (Alan Hughes, BA)> MHEG-5 (interactivity enabled by firmware) (Alan Hughes)> HEVC (H.265) (BA, Sony, SBS, Alan Hughes)> HE-AAC (Alan Hughes, Sony)> EMBMS (Evolved Multimedia Broadcast Multicast Service) (Telstra)> 3D TV (non-frame compatible) (Alan Hughes); (unspecified 3D) (Free TV, BA)> UHD (BA, Free TV)> Amendments to both AS1417 and AS1367 (standards that predominantly deal with

antenna design and installation parameters) (Alan Hughes).

Q7. The rate of uptake and penetration of television receivers that are compatible with more advanced standards, including future prospects and any other issues you see as relevant.

A number of submitters cited evidence that the level of MPEG-4 compliance in receivers was considerable. With major manufacturers such as Sony specifying the percentage of new sets being sold that is MPEG-4 compliant, the ACMA believes that current sets provided to market are highly likely to be MPEG-4 capable. Sony submitted that all Sony sets sold in Australia since 2009 have been compliant (and since 2008 have included AD capability).69 Ai Group did not specify a number, but claimed that most receivers now supplied to the market were compliant.70 BA cited market research that over two-thirds of main TV sets were compliant.71

BA stated that there was a minimal price premium for DVB-T2 over DVB-T receivers. They argued that there are four DVB-T2 chipsets available and that as overseas jurisdictions introduce DVB-T2 (in particular, the UK and Germany), DVB-T2 receiver capability will increase as it becomes the default standard.72

69 Sony submission, p. 8.70 Ai Group submission, p. 3.71 BA submission, p. 4.72 BA submission, p. 16.

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Q8. The expected useful life of ‘legacy’ digital television receivers, including the length of time required before replacement of MPEG-2/DVB-T content can be expected to be uncontroversial.

The ACMA construes that there is general agreement among submitters that the expected useful life of legacy receivers is getting shorter over time and that there will be risks associated with any migration.

Views on the impact of legacy equipment on any transition were divided. It was noted that the presence in the market of later technology devices that are backward compatible to current standards will assist future transition to the later technology. However, several submissions noted that the size of the legacy pool was a significant factor and that this could lead to long implementation time frames.

Both BA and Sony claim that there were considerable numbers of MPEG-4 compatible devices already in the marketplace. BA estimated the lifecycle of receivers to be as low as five years. Recognising the exigencies of restack, BA posited that a replacement date of 2019 would cause ‘minimal obsolescence of active devices still in the marketplace’.73

The ABC noted that the legacy issue was a significant one—that the ‘overwhelming majority’74 of receiver equipment was incompatible with DVB-T2, MPEG-4 and ‘any likely future standards’.75 Free TV suggested that a minimum of two years notice would be needed between the decision to adopt new standards and the time at which new services using those new standards could be introduced.76

Alan Hughes suggested that leaving an MPEG-2 content stream available to viewers without MPEG-4 receivers will prevent the introduction of MPEG-4 content streams. This would leave viewers owning legacy receivers ‘without TV to watch.’77

BA estimated the life-cycle of receivers to be as low as five years.78 Sony cited GfK research showing a DTV receiver life-cycle to be 6.3 years.79

73 BA submission, p. 17.74 ABC submission, p. 2.75 ABC submission, p. 2.76 Free TV submission, p. 5.77 Alan Hughes submission, p. 23.78 BA submission, p. 17.79 Sony submission, p. 8.

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Technological migration optionsThe third section of the paper considered the processes by which technological change might occur. It made a distinction between technology replacement and technology supplementation as two approaches to introducing new broadcasting technologies. The overarching question put to submitters was: what are the potential options for promoting standards migration and how might they be implemented? It then asked some detailed questions that sought to ascertain submitters’ views on the ‘technology pathway’ and the ‘regulatory pathway’.

Q9. Any strategies you believe are both feasible and desirable for introducing new technical standards, including:> which standards> how they might be introduced, including transmission and receiver readiness

issues> any ACMA measures that would assist.

Both Free TV and SBS argued that the ‘sixth channel’ should be made available for experimenting/testing and simulcasting.

To facilitate testing of any new platform and service standards, Free TV recommends that the currently unallocated sixth 7 MHz DTV channel (Channel A) be immediately reserved to provide space for testing and field trials of new technologies.80

Spectrum should be reserved for broadcasters to experiment with and transition to new technologies as they evolve. For example, channel 27, or the sixth channel, could be set aside for such experiments.81

BA agreed with SBS that Channel 27 could be used for such purposes. The ABC also saw value in using Channel 27 for broadcasting purposes, albeit from the standpoint of releasing additional spectrum for digital radio.

… the ABC notes that the discussion paper identifies potential additional spectrum in the form of a nominal ‘Channel 27’ in the UHF bands. The Corporation welcomes ACMA’s willingness to entertain the possibility of creating a new multiplex in this way. The creation of a Channel 27 would provide a potential home for the sixth multiplex—or next-generation DTTB services—while allowing VHF Channel 10, once cleared, to be allocated to digital radio.82

This multiplex could be left ‘fallow’ now to enable new digital free-to-air terrestrial transmission technology and service tests and trials and eventually provide extra assistance for the introduction of such new transmission technologies as DBVT-2 and H 265 compression.83

80 Free TV submission, p. 4.81 SBS submission, p. 3.82 ABC submission, p. 4.83 BA submission, p. 6.

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Free TV, however, argued against the Channel 27 proposition.

The other two proposals by the ACMA (using UHF channel 27) are not appropriate for the testing and development of these technologies. In particular, it would be inappropriate to consider testing and assessing MPEG-4 in a 6 MHz channel. Receivers are set up for 7 MHz channels so any testing in a 6 MHz channel will not produce useful results for broadcasters in any event.

Re-allocating Channel 27 as a 7 MHz channel would require clearance of a large number of fixed and mobile services. Free TV assumes clearance of a considerable number of existing fixed and mobile services would require a long lead time.84

Sony’s submission did not refer to additional spectrum, but did argue for a MPEG-2/MPEG-4 simulcast period achieved using the existing allocation of spectrum. Along with BA, Sony argued that compelling content as a market force would drive uptake of new receiver technology.

ACMA should establish a simulcast period where MPEG-2 and MPEG-4 are broadcast at the same time. However, the main channel content would be in MPEG-2 with new/additional content in MPEG-4. If MPEG-4 content is of interest to consumers, this will encourage the transition to MPEG-4.85

We believe it would be far more effective to seed the market with new services (as already outlined) and allow market forces to drive adoption of these services and smooth evolution of the installed base of consumer equipment. At the end of the day it is exactly this approach that drove many consumers to move from analogue to digital and it is reasonable to assume that a large proportion of the market would do the same again if new compelling digital services are made available.86

FOXTEL and Telstra also argued that market forces could drive technological change. However, in these two submissions it was the ‘appropriate’ pricing of existing spectrum allocations that would encourage broadcasters to adopt newer, more efficient standards rather than the consumer market for receivers responding to attractive content.

We consider that market-based pricing of spectrum will be the most important driver for FTA providers to move to more efficient platform standards as it will then be in their business interest to innovate to use less spectrum.87

In particular, the ACMA and Government can help facilitate industry adoption of new technology standards by implementing the recommendation in the Convergence Review Interim Report2 to separate content regulation from the licensing of broadcasting spectrum, and move the allocation and management of spectrum from the Broadcasting Services Act to the spectrum licensing regime under the Radiocommunications Act. This change would result in terrestrial ‘over-the-air’ television broadcasting moving to a technology neutral environment in which a market price is paid for access to spectrum. This environment would give broadcasters increased flexibility and incentive to introduce new technologies and services.88

84 Free TV submission, p. 4.85 Sony submission, p. 10.86 BA submission, p. 17.87 FOXTEL submission, p. 2.88 Telstra submission, p. 4.

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Contemplating the possibility that additional spectrum may not be available for technological transition, the ABC suggested that ‘hot swaps’ to new standards could be possible as long as sufficient compliant devices were deployed. The ABC identified a role for the ACMA in imposing (i.e., mandating) minimum receiver standards to facilitate such a transition.

The ABC believes there may be a way to achieve a transition from the current combination of DVB-T and MPEG-2 to DVB-T2 and MPEG-4 in the absence of additional spectrum.

The Corporation observes that if all DTTB receivers in the field were MPEG-4-capable and able to dynamically detect and adapt to the deletion or insertion of channels in a DVB-T transport stream, it would be theoretically possible to ‘hot swap’ MPEG-4 versions of channels for MPEG-2 services with minimal audience disruption.

In a similar fashion, if Australia were to adopt a standard for next-generation DTTB set-top boxes that ensured backwards compatibility and permitted dynamic retuning, it would be likewise theoretically possible to ‘hot swap’ between multiplexes transmitted in DVB-T2 and DVB-T.89

In any future transition to next-generation DTTB technologies, the ABC would welcome the ACMA using its powers under section 130B of the Broadcasting Services Act 1992 to impose well-defined and enforceable minimum receiver standards by way of a legislative instrument. The Corporation’s experience of the original DTTB standards, which were never legislated, has been that adherence to them by receiver manufacturers has often been piecemeal, making the development of services that rely upon particular features difficult. Establishing enforceable minimum standards would provide a consistent technical base upon which broadcasters can provide a consistent audience experience.90

This contrasted with the responses that many submitters provided to question one, which asked about possible actions by the ACMA. These responses are provided earlier in this summary, but largely argue for an ACMA role that focuses on facilitating an industry-sponsored receiver standard.

As a matter of principle, the move to new technical standards should be shaped by industry and market forces. Telstra is of the view that the industry is generally in a better position than government to determine which technical standards are commercially viable and most appropriate to deliver what consumers are seeking. Industry has strong commercial incentives to migrate to new standards and avoid the loss of consumer ‘eyeballs’ during transition phases.

The role of the ACMA should be focused on facilitation and communication, along with representing Australian industry positions at international standards forums. Regulation should only be considered as a last resort.91

The revised receiver standard need not be mandated but could be highlighted to suppliers so that they should seek to supply only products that meet the requirements of the standard to avoid the legacy issue. Consumer groups

89 ABC submission, p. 2.90 ABC submission, p. 5.91 Telstra submission, p. 3.

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could also advise consumers to look for products that include the features specified in the standard to ensure continued reception.

A similar process could be used for the introduction of any new technology.

Although we do not believe regulations are required at this time, we would prefer that the ACMA host and participate in the discussions between broadcasters, suppliers and other stakeholders and monitor the situation to see if any market failures develop that may require regulation.92

Sony nominated several technical standards (MPEG-4, HbbTV/HTML5, HE-AAC and DVB-T2) as feasible and desirable. Sony made the point that MPEG-4 and HbbTV/HTML5 could be incorporated into receivers for little or no added cost—the MPEG-4 codec being required for IP video delivery via USB and so must be incorporated into connected receivers by default. Sony acknowledged that DVB-T2 adds costs to receivers (in contrast to BA’s position) and so may not be included by default if not needed in particular markets.

The current solution for DVB-T2 still results in an additional cost to the receiver. Although it is foreseen that this cost will come down over time, it is not as yet clear when DVB-T2 technology will be part of every receiver regardless of whether it is required for a particular market or not.93

DVB-T2 services have already been launched in a number of countries, and adopted as a standard in many more. Price premiums for T2/AVC (MPEG4) receivers over DVB-T/AVC (MPEG4) receivers are now minimal.94

Sony also made the point that new services using DVB-T2 would be needed to attract viewers and justify the added costs.

The ABC view on the matters raised in this question is probably reflected in its responses to question nine regarding spectrum use. SBS did not support the option of reconfiguring existing spectrum allocations.

SBS submits that the most sensible transition path for DVB-T2 is to use additional spectrum, that is, the unoccupied UHF Channel 27 option, expanded to 7 MHz, or the sixth channel. SBS does not support the option of reconfiguring existing spectrum allocations.95

Telstra argued that use of efficient compression technologies would free up capacity on existing broadcaster multiplexes. This position implies the need for some reorganisation of mux use between broadcasters whereby a single mux is vacated and then upgraded. Telstra also argued that third-party ownership of muxes could allow for efficient leasing of capacity by broadcasters.

Telstra also suggests that the migration to new over-the-air technical standards could be streamlined if broadcasters decided to adopt an alternative business model whereby they lease shared multiplex capacity from one or more third parties (rather than owning and operating their own transmission platforms). This approach would increase the opportunity for multiplex and spectrum capacity to be aggregated and rationalised during migration phases,

92 CESA submission, p. 2.93 Sony submission, p. 10.94 BA submission, p. 16.95 SBS submission, p. 3.

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and thereby maximising the capacity that can ultimately be freed up for the introduction of new standards and services.96

BA also supported a shared approach to broadcaster allocations in the long term. BA saw DVB-T2/HEVC as a longer term DTTB technical configuration.

Technological evolution also raises the issue of a lack of spectrum to enable both evaluation of technologies and technology transitions under the current regulatory approach. It is likely that some transitions will require existing spectrum license holders to share RF channels/multiplexes, at least during transition phases. This will require regulatory change, which was already proposed in the draft recommendations outlined the CRC review.97

Responses to this question were similar to those received to question one on standards and indicate quite strong support for a consultative cross-industry approach (possibly to be facilitated by the ACMA) to standards evolution. Responses to question five—for instance, those dealing with access to the so-called sixth channel—are also largely relevant here.

Q10. For MPEG-4, the ACMA also seeks submissions on:> When or in what circumstances augmentation of existing multiplexes with

MPEG-4 content is desirable?> Whether inclusion of MPEG-4 as a requirement in the Australian receiver

standard, or measures to directly mandate MPEG-4, would increase the uptake of MPEG-4-ready receivers without imposing substantial additional costs on Australian television viewers.

Many of the positions relevant to these questions have been expressed in response to other questions on standards more generally and the role of the ACMA.

FOXTEL did not support the need for mandatory standards and endorsed the role currently played by Standards Australia. FOXTEL supported inclusion of both MPEG-4 and DVB-T2 into AS4933.1-2010 (the industry standard for receivers). While FOXTEL supported ACMA participation in regard to inclusion of MPEG-4, it proposed a more proactive approach in developing a standard for DVB-T2. FOXTEL also proposed introducing a labelling scheme that would offer benefits for consumers making informed choices regarding future DTV purchases.

FOXTEL submits that the ACMA should support Standards Australia to develop an optional Australian standard for DVB-T2, which draws on standards developed by the Digital Video Broadcasting Project, the relevant international consortium.

[…]

As a complementary measure, the ACMA could assist in the development of a labelling scheme to assist consumers to make an informed choice to purchase devices that are DVB-T2 (as well as MPEG-4) enabled.98

FOXTEL also stated that migration to new platform standards should not take place prior to the completion of the switchover.

96 Telstra submission, p. 7.97 BA submission, p. 10.98 FOXTEL submission, pp. 7–8.

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Expeditious migration of FTA providers to next generation platform standards is desirable, although it is noted that this would not occur before digital switchover is complete.99

In contrast to this voluntary approach, Sony argued that MPEG-4 should be made mandatory in preparation for its introduction in 2014. The transition path significantly reflects the one suggested by Alan Hughes—the additional services are provided in MPEG-4 with the primary service available in MPEG-2, prior to a final cessation of MPEG-2 according to a timetable established and publicised by the ACMA.

Sony recommends that ACMA start planning now for the introduction of new platform standards for DTTB, commencing with MPEG-4. The intention should be to introduce MPEG-4 by 2014 and not wait for further developments with respect to H.265 (HEVC).

Sony believes it is important that MPEG-4 is incorporated in an Australian receiver standard and that ACMA mandates this standard. Both audio and video aspects of the standard will need to be considered.

A potential migration path to MPEG-4 would involve a simulcast period for MPEG-2 and MPEG-4, where the main channel content would be in MPEG-2 with new/additional content in MPEG-4. If MPEG-4 content is of interest to consumers, this will encourage the transition to MPEG-4.100

The ABC (who also supported mandatory MPEG-4) questioned the value of the efficiency gains achieved by a MPEG-2 to MPEG-4 only transition, particularly where significant numbers of MPEG-2-only devices remain in use.

The overwhelming majority of existing receiver equipment in Australia is incompatible with DVB-T2 and MPEG-4—or indeed with any other likely future transmission and encoding standards. Migration to a new standard will thus require all households to acquire new receivers, meaning that it will necessarily take place over an extended period. Further, if it is not to be a transition for technology’s sake, the new DTTB standard should enable new and/or improved services that create an incentive for audiences to purchase new receiver hardware.

[…]

the ABC’s experience indicates that a switch from MPEG-2 to MPEG-4 will only deliver an efficiency improvement in the order of 20%. It is unclear whether the benefits of such a transition would be sufficient to warrant the likely costs to audiences and industry.101

Free TV supported a priority transition to MPEG-4, but argued that further research was needed as to the level of MPEG-4 ownership before any action could be taken. Free TV suggested that MPEG-4 be made ‘essential’ or ‘highly recommended’ in the Australia receiver standard—to encourage its inclusion in receivers. The Free TV submission also argued that MPEG-4 services could be made available now to assist in take-up and without impacting negatively on the switchover/restack processes.

While the ACMA paper notes that the proportion of MPEG-4 capable receivers is likely to be substantial, there are further steps that can be taken to improve the penetration levels of MPEG-4 receivers. In the first instance, the ACMA

99 FOXTEL submission, p. 11.100 Sony submission, p. 3.101 ABC submission, pp. 2–3.

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should conduct research to assess the availability of MPEG-4 receivers in the market now, with projections for 5 years into the future.

To encourage take-up, it is also recommended that the relevant Australian DVB-T receiver standard (AS4933) be amended to make MPEG-4 “essential” or “highly recommended”. This would encourage CE manufacturers to introduce dual and backward compatible decoding in Australian DVB-T receivers as a first step towards the upgrade.

The best method of increasing the penetration level of MPEG-4 capable receivers and to ensure correct operation of the receivers is to have an MPEG-4 service on air. This can be achieved without a negative impact on digital conversion or the restack.102

BA argued that the sixth channel be used to ‘seed’ MPEG-4 services, allowing for a wholesale transition on the other five muxes once ‘installed device milestones’ are reached. BA did not consider that mandating MPEG-4 was necessary given the natural increase in its availability. It also made the general point that mandating standards could inadvertently lead to an ‘Australian’ standard that would increase manufacturing costs and create an MPEG-4 legacy issue for future transitions.

Whilst standards mandating may also offer improved device compatibility, it also increases the risk of an Australian specific standard, increasing the cost of equipment for this market, creating a potential immediate legacy AVC (MPEG4) device population, and the potentially lengthy process un-necessarily delaying a transition.

What might be more effective is an ACMA/industry campaign to promote AVC (MPEG4) equipment, and a labelling scheme similar to that previous used for ASO to identify HD ready equipment. This, together with the new and improved services seeded and available only on AVC (MPEG4) will create demand from consumers to update their legacy equipment.103

BA also suggested an approach that included publicity and education, together with new and improved services to create demand for MPEG-4 devices.

102 Free TV submission, p. 6.103 BA submission, pp. 18–19.

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