REPORT THE PROPOSED SWITCHOVER FROM ANALOGUE BROADCASTING TO DIGITAL BROADCASTING IN SOUTH AFRICA

REPORT THE PROPOSED SWITCHOVER FROM ANALOGUE BROADCASTING TO DIGITAL BROADCASTING IN SOUTH AFRICA DIGITAL BROADCASTING MIGRATION WORKING GROUP Final version - 17 November 2006

Document Status The preparation of this report has been facilitated by the Digital Broadcasting Migration Working Group ( WG ), established by the Minister of Communications. The report has been compiled by acknowledged industry experts with the aim of providing recommendations on specific terms of reference set by the Department of Communications. While every effort has been made to ensure accuracy and to provide a consensus view when required, it should not be assumed that all member organisations of the WG support all aspects of the report. The views expressed in the report are those of the industry experts working in the WG and are not necessarily binding on the organisations that the experts represent in the WG. 2

TABLE OF CONTENTS Acronyms...5 1. INTRODUCTION...8 2. SCOPE OF DIGITAL BROADCASTING...10 2.1 DEFINING DIGITAL TELEVISION STANDARDS AND DELIVERY PLATFORMS...11 2.1.1 Digital Terrestrial Television...11 2.1.2 Satellite Digital Television...11 2.1.3 Digital Cable Television...12 2.1.4 Internet Television and IPTV...12 2.1.5 Digital Mobile Television...14 2.2 DEFINING DIGITAL RADIO STANDARDS AND DELIVERY NETWORKS...14 2.2.1 Digital Terrestrial Radio...15 2.2.2 Digital Satellite Radio...17 2.2.3 Internet Radio and Mobile Radio...18 2.3. STANDARDS, FORMATS AND APPLICATIONS RELATED TO DIGITAL BROADCASTING...19 2.3.1 Image Quality and Digital TV Formats...19 2.3.2 Aspect Ratios...21 2.3.3 Interactive Broadcasting and Return Path Channels...21 2.3.4 Electronic Programming Guide (EPG)...23 2.3.5 Set-top Box (STB)...23 2.4 POLICY APPROACH TO TELEVISION AND RADIO...31 2.5 POLICY CONSIDERATIONS IN PLATFORM SELECTION...33 3. PUBLIC POLICY OBJECTIVES FOR DIGITAL BROADCASTING SWITCHOVER36 3.1 GLOBALISATION AND NEPAD...37 3.2 GLOBAL INFORMATION ECONOMY...38 3.3 NATIONAL GOVERNMENT POLICIES...39 3.4 GOVERNMENT INTERVENTION...40 3.5 PUBLIC POLICY ADVANTAGES OF DIGITAL BROADCASTING...41 4. PUBLIC INTEREST ISSUES IN SWITCHOVER FROM ANALOGUE TO DIGITAL BROADCASTING...44 4.1 PUBLIC TRUSTEE MODEL...45 4.2 PUBLIC INTEREST OBLIGATIONS...47 4.3 PUBLIC INTEREST IN A DIGITAL BROADCASTING ENVIRONMENT...49 4.3.1 Fostering Democracy and Democratic Values (Diversity)...49 4.3.2 Reflection of National Identity, Culture and Character...53 4.3.3 Universal Access and Redress...59 4.3.4 Consumer Protection...60 4.3.5 Public Broadcasting...60 4.3.6 Community Broadcasting...67 4.3.7 Minimum public interest requirements...70 4.4 IMPLEMENTATION POLICY CONSIDERATIONS...75 5. IMPACTS OF TRANSITION ON BROADCASTERS AND THE EXISTING LICENSING REGIME...77 5.1 CONTENT DELIVERY AND THE CONTENT VALUE CHAIN...78 5.1.1 Content Delivery in a Digital Environment...78 5.1.2 Digital Content Value Chain...89 5.3 EVALUATION OF EXISTING POLICY AND LICENSING REGIME...92 5.3.1 Policy and Licensing of Digital Terrestrial Television in Europe...92 5.3.2 Policy and Licensing of Digital Sound Broadcasting in Europe... 103 5.3.3 Existing Digital Broadcasting Satellite Model in South Africa... 106 5.3.4 New Legislative Framework and Digital Broadcasting Licensing... 107 3

5.4 APPROACHES TO NEW BROADCASTING SERVICES, ICT ACTIVITY AND BROADCASTING ON NON-TRADITIONAL NETWORKS... 124 5.4.1 New Broadcasting Services... 124 5.4.2 ICT Activities within the traditional broadcasting spectrum... 126 5.4.3 Broadcasting on non-traditional networks... 128 5.5 IMPACT OF TRANSITION ON EXISTING BROADCASTING SERVICES AND PROTECTION OF RIGHTS... 129 5.5.1 Impact of Transition... 129 5.5.2 Protection of rights in transition... 130 6. IMPLEMENTING DIGITAL BROADCASTING IN SOUTH AFRICA... 132 6.1 OPTIONS FOR DIGITAL SWITCHOVER... 133 6.2 ECONOMIC MODELING OF DIGITAL SWITCHOVER IN SOUTH AFRICA 137 6.2.1 Scenario One... 138 6.2.2 Scenario Two... 138 6.2.3 Scenario Three... 138 6.3 LICENSING AND SURRENDER OF ANALOGUE FREQUENCIES... 139 6.3.1 Digital Radio... 139 6.3.2 Digital Television... 139 6.3 DRIVERS OF CONSUMER ADOPTION... 148 6.4 CO-ORDINATION OF DIGITAL MIGRATION PROCESSES... 149 6.5 DIGITAL TELEVISION SWITCHOVER PROCESS... 150 6.5.1 Digital Switch-on... 150 6.5.2 Digital Switchover... 150 6.5.3 Analogue Switch-off... 151 6.6 DIGITAL DIVIDEND... 151 6.6.1 Where does the Digital Dividend come from?... 151 6.6.2 Digital Broadcasting needs post-2015... 153 4

Acronyms 3G Third Generation Mobile Technology capable of carrying voice, data and multimedia AM Amplitude Modulation; often used to refer to medium wave broadcasting API Application Programme Interface ATSC Advanced Television Systems Committee BEE Black Economic Empowerment BFN The Black Filmmakers Network CA Conditional Access CAM Conditional Access Module CODEC Encoder/Decoder COFDM Coded Orthogonal Frequency Division Multiplex CSN Community Services Network (TV channel operated by M-Net) DAB Digital Audio Broadcasting (usually applied to Eureka 147) DBAB Digital Broadcasting Advisory Body DMB Digital Multimedia Broadcasting DR Digital Radio DRM Digital Radio Mondiale drm Digital Rights Management DSB Digital Sound Broadcasting DTG Digital TV Group DTH Direct to Home satellite delivery of content DTT Digital Terrestrial Television DTV Digital Television DVB Digital Video Broadcasting DVB-C Digital Video Broadcasting Cable DVB-H Digital Video Broadcasting-Handheld DVB-S Digital Video Broadcasting Satellite DVB-S2 Digital Video Broadcasting Satellite version 2 DVB-T Digital Video Broadcasting Terrestrial DVD Digital Versatile Disk ECA The Electronic Communications Act, No. 36 of 2006 EDTV Enhanced Definition Television EPG Electronic Programming Guide 5

ETSI European Telecommunications Standards Institute FCC Federal Communications Commission FM Frequency Modulation; sound broadcasting system in the VHFband FTA Free-to-air HD High Definition HDTV High Definition Television IBOC In-Band On-Channel ICASA Independent Communications Authority of South Africa ICT Information & Communication Technology IPO The Independent Producers Organisation IPTV Internet Protocol Television ISDB-T Integrated Services Digital Broadcasting for Terrestrial ITU International Telecommunication Union ITU RRC-06 ITU Regional Radiocommunication Conference for the planning of digital broadcasting LSM Living Standards Measure MAPPP-SETA Media, Advertising, Publishing, Printing And Packaging Sector Education Training Authority MBMS Multimedia Broadcast/Multicast Service MediaFlo Media Forward Link Only MFN Multi-frequency Network MHP Multimedia Home Platform MPEG Moving Picture Experts Group MPEG-2 Compression technology developed by MPEG currently in use for digital broadcasting MPEG-4 Improved compression technology developed by MPEG currently being introduced globally for digital broadcasting MW Medium Wave OS Operating System The PANSALB Act Pan South African Language Board Act, No.59 of 1995 PDA Personal Digital Assistants PPV Pay-Per-View PVR Personal Video Recorder QAM Quadrature Amplitude Modulation 6

RCT Return Channel- Terrestrial return path from viewer to broadcaster in interactive broadcasting QPSK Quadrature Phase Shift Keying RDS Radio Data System RF Radio Frequency RRC Regional Radiocommunication Conference for the planning of digital broadcasting services SABC The South African Broadcasting Corporation SADIBA The Southern African Digital Broadcasting Association SATFA South African Table of Frequency Allocations SDMB Satellite Digital Multimedia Broadcasting SDTV Standard Definition Television SFN Single Frequency Network SMS Subscriber Management Service STB Set Top Box SW Short Wave TBN Trinity Broadcasting Network TDN The Digital Network Group TV Television VHF Very High Frequency; sound and television broadcasting services in the band 88-254 MHz VOD Video on Demand VOIP Voice Over Internet Protocol UMTS Universal Mobile Telecommunications System UHF Ultra High Frequency; broadcasting services in the band 470-3000 MHz WG Digital Broadcasting Migration Working Group WARC ITU World Administrative Radio Conference 7

1. INTRODUCTION Digital technologies are changing the way services are delivered, leading to a blurring of the boundaries between types of services and the means of delivery, and eroding the traditional distinctions between text, audio and video. This process of change is often referred to as convergence, alluding to the convergence that is taking place between the previously separate sectors of print media, data, telecommunications and broadcasting. The pace of change is not uniform across all sectors. In South Africa, for example, convergence first took place at the level of transactions where digital technology allowed consumers to carry out a number of familiar activities such as banking, buying and selling in new ways. This led to the promulgation of the Electronic Communications and Transaction Act, No. 25 of 2002, to regulate this new way of transacting electronically and create certainty in the market on the use of electronic transactions. The next area where convergence has been active is that of telecommunications, which has grown to be more than just the provision of voice services and value added services to include broadcast content delivery. This convergence between telecommunications and broadcasting led to the promulgation of the Electronic Communications Act (ECA), No. 36 of 2006, and the Independent Communications Authority of South Africa Amendment Act, No. 3 of 2006 (ICASA Amendment Act). However, as mentioned previously the pace of change is not uniform and this convergence between telecommunications and broadcasting is likely to be a protracted affair if left to market forces alone unless specific steps are taken to ensure that the current public, commercial and community terrestrial broadcasting services switchover 1 from analogue transmission networks to digital transmission networks, thus opening the doorway to an enhanced and perhaps interactive broadcasting experience for the public. The Minister of Communications ( the Minister ), in her Budget Speech in 19 May 2005, announced the establishment of a Digital Broadcasting Migration Working Group ( WG ) to develop recommendations and contribute towards the development a national strategy for the migration of broadcasting systems from analogue to digital. The Minister indicated that the WG would consist of representatives from the broadcasting industry, Independent Communications Authority of South Africa (ICASA), government, civil society, organised labour and consumer groups. The WG was mandated to assist government in creating a digital agenda that informs broad communication policy in South Africa, as well as key national economic policy that integrates the knowledge economy into the vision of the information society. The first meeting of the WG was held on 26 August, at the Indaba Hotel in Fourways, Johannesburg. This inaugural meeting focused on setting the terms of reference for the WG and organising the WG into working committees. At this plenary meeting four committees were established, namely the: Policy Working Committee; Content Working Committee; Economic Working Committee; and Technical Working Committee (the terms of reference of each working committee are set out in Appendix A). 1 Switchover, for the purposes of this report, is defined as the progressive migration of households from analogue-only reception to digital reception of broadcasting transmissions. 8

Given the differing terms of reference, each committee determined the research and drafting process it would follow in developing its recommendations. In respect of the technical and policy working committees, the broader working committee divided the work among smaller task teams who then provided drafting for discussion and agreement. In respect of the content working committee, a questionnaire was developed and completed by members of the independent production sector, in order to assess the level of production readiness. Both the Independent Producers Organisation (IPO) and the Black Filmmakers Network (BFN) were asked to consult their members on their state of readiness for digital production. The BFN subsequently provided a report and briefing to the committee. Broadcasters were also asked to make a presentation outlining their state of readiness for a digital domain. Presentations to the committee were made by the SABC, M-Net and e.tv. The committee also approached the MAPPP-SETA to provide advice on its training and development activities for a digital domain. Finally, the committee was of the view that a specialised legal expertise was required to make meaningful recommendations on intellectual property issues. Consultants were briefed to advise the committee in relation to various matters arising from the migration of broadcasting services from analogue to a digital. In respect of the work of the economics working committee, the need was identified for an economic modelling exercise in order to determine the economic viability of digital switchover in South Africa. The economics working committee subsequently drew up a task directive and approached the Department of Communications (DoC) for funding in order to engage economic experts to conduct the above study. Consultants were engaged to provide an economic model that would allow for scenario planning taking into account the costs and benefits to government, the consumer, broadcasters and the signal distributors. The scenarios presented in the economics report provide a broad framework for the impact of Digital Terrestrial Television (DTT), based on three alternative timeframes. The model that has been developed by the consultants is appended to this report and should be used to develop further scenarios in managing the digital switchover process on an ongoing basis. The WG would recommend that the Minister not disband the WG immediately after the handing in of the report on digital switchover in South Africa. This would put government, the regulator and even the proposed independent body in a position to access or utilise the collective expertise of the WG in developing a digital switchover strategy and managing the switchover process. 9

2. SCOPE OF DIGITAL BROADCASTING The scope of work of the WG was clearly set out by the Minister as being limited to developing recommendations and contributing towards the development of a national strategy for the switchover of broadcasting systems from analogue to digital broadcasting in South Africa. It is clear from this scope that the digital switchover of existing analogue broadcasting networks is not limited to the terrestrial broadcasting platform, as the broader term of digital broadcasting is used. This led to the WG attempting to determine what is captured in the scope of the term digital broadcasting. The WG decided that Digital broadcasting essentially means the practice of using digital techniques to encode audio and video signals and to transmit digital data rather than analogue waveforms on networks. Coupled with the use of advanced digital compression techniques this will result in more efficient bandwidth usage compared to analogue broadcasting services, allowing a content provider more room to provide broadcasting and electronic communication services, or to provide a higher-quality signal than has previously been available. It was decided by the WG, that in line with implementation globally, digital broadcasting can still be divided into two streams, namely television and radio (audio or sound broadcasting). In practice though, it was admitted that this distinction is difficult to maintain in a digital era as sound-broadcasting services can now be provided by digital television technologies and video can be broadcast using digital radio technologies. The WG, therefore distinguished on the basis of the primary content offering between services and the following definitions were identified. Digital television (DTV) means the use of digital modulation and compression to transmit video, audio and data signals to consumer access devices (or receiver sets), and Digital Sound Broadcasting (DSB) or Digital Radio means the use of digital modulation and compression to transmit audio programmes (music, news, sports, etc.) only. In the future when multimedia content, irrespective of the nature of the content, is distributed on any network and on multiple platforms it is likely that this distinction between television and radio will fade away to be replaced by a distinction between fixed, nomadic and mobile delivery of multimedia content. Broadcast systems were invented on the basis that signals would propagate terrestrially. Although satellite broadcasting systems became a possibility in the 1960 s, terrestrial networks continue to be the primary delivery systems for television and radio broadcasting services. All broadcast systems require significant frequency spectrum which are a finite resource. One of the main benefits of a switchover to digital broadcasting is the freeing up of such valuable frequency spectrum, as well as improving the quality and quantity of broadcasting services. There have been a number of developments over the past twenty years and various technology platforms are capable of providing digital television and radio. Around the world, satellite direct-to-home (DTH) operators have been launched, new digital cable networks have been built and many analogue cable networks upgraded. Recently, traditional telecommunications networks (broadband) and mobile telecommunications networks have begun offering broadcasting content (television and radio programming services) using digital technologies, allowing offering such as Internet Protocol Television (IPTV) and 3G mobile television. 10

The implication of these different technologies is that as the switchover from analogue to digital broadcasting takes place, there is no reason why the traditional focus on the terrestrial platform should be maintained. In fact a scenario is possible whereby multiple platforms (cable, broadband, terrestrial or satellite) collectively and individually could provide full digital television or radio services. The WG felt that despite recent moves towards technology neutrality, in legislation such as the ECA, there was still merit in distinguishing for the purposes of this Report between the different technologies by which digital content is delivered to the public or subscribers. 2.1 DEFINING DIGITAL TELEVISION STANDARDS AND DELIVERY PLATFORMS In line with the traditional policy approach in South Africa, with regards to broadcasting, of distinguishing between delivery on the basis of terrestrial, satellite and cable/broadband the following means of delivery and relevant technologies were identified by the WG. 2.1.1 Digital Terrestrial Television Digital Terrestrial Television (DTT) means the implementation of digital technology to provide a greater number of channels, especially when using Standard Definition Television (SDTV); and/or better quality of picture when using Enhanced Definition Television (EDTV) or High Definition Television (HDTV); and sound when using Dolby Digital 2 through a conventional aerial instead of a satellite dish or cable connection. The main technology standards used are Advanced Television Systems Committee (ATSC) standard in North America, Integrated Services Digital Broadcasting (ISDB-T) standard in Japan, Digital Video Broadcasting (DVB-T) in Europe. These and other transmission standards were developed to replace traditional analogue terrestrial broadcasting with a digital broadcasting equivalent. 2.1.2 Satellite Digital Television Satellite Digital Television means the implementation of digital technology to combine large numbers of channels onto available bandwidth via satellite for reception by consumers via satellite dishes. The greater radio frequency bandwidth available to satellite operators usually allows them to outperform DTT operators in terms of the number of channels offered. The costs of satellite dishes have been reduced in the past three years making them affordable to the average consumer. 2 Dolby Digital, also known as AC-3, is a digital audio coding technique that reduces the amount of data needed to produce high quality sound. Dolby Digital takes advantage of how the human ear processes sound. Dolby Digital is used with digital versatile discs (DVDs), high definition television (HDTV), and digital cable and satellite transmissions. It has been selected as the audio standard for digital television (DTV) in the United States of America. The European DVB standard, however, does not use Dolby Digital for audio, but instead uses MPEG standard technology for both the audio and video signals. 11

The technology standard used globally is Digital Video Broadcasting - Satellite (DVB-S), although the other main standards such as ATSC and ISDB have also made provision for satellite direct-to-home broadcasting (DTH) in the standards. Digital satellite television is based on the DVB-S (EN 300 421) standard and has been deployed in South Africa since 1995. Digital satellite television has similar spectrum efficiency advantages to DTT. DVB-S2 (EN 302 307) is the next generation of DVB family standards that is 30% more bandwidth efficient than DVB-S. In addition, digital satellite television has the benefit of providing universal service at a more affordable transmission cost than DTT. DVB-S2 (TR 102 376) is the successor to DVB-S announced in 2005. It offers a 30% efficiency gain achieved through: New modes of operation, namely Variable Coding and Modulation (VCM) and Adaptive Coding and Modulation (ACM). New error correction code called Low Density Parity Code (LDPC), and New modulation schemes DVB-S2 is targeted not only for traditional broadcast, but also for interactive services and professional applications like contribution and distribution for DTV networks. 3 2.1.3 Digital Cable Television Cable television (often shortened to cable) means a system of providing television, radio or sound programming and other services to consumers via radio frequency signals transmitted directly to people s televisions through fixed optical fibres or coaxial cables as opposed to the over-the-air method used in traditional television broadcasting in which a television antenna is required to receive signals. Although prevalent in other parts of the world, cable television was never introduced in South Africa. In North America and Europe analogue cable television is being upgraded to digital. Digital cable television means a type of cable television that delivers more channels than possible with analogue cable by using digital video compression. Digital cable also enables bidirectional (two-way) communication, enabling services such as the ability to purchase pay-per-view (PPV) programming and video on-demand (VoD) services. 2.1.4 Internet Television and IPTV Traditionally, television was only distributed via cable, satellite or terrestrial systems. However, with the increase in Internet connection speeds, advances in technology and decreases in connection costs a new trend has emerged where traditional broadcast television content and internet only television content has become accessible on the Internet and traditional telecommunications broadband networks. A clear distinction is being made between Internet Television and Internet Protocol Television (IPTV), which lends itself to regulatory distinctions as well. Internet television is seen, in terms of the internet model, as being similar to the normal consumer internet experience in that the model is open to any rights holder as it is based on the same publishing model that exists on the World Wide Web (Internet), namely that anybody can create a website and publish that on a global basis. In fact, Internet Television operates in the same fashion as it is accessible from any type of computer (or any other consumer device that can access the internet) and connection, it is also not 3 Eutelsat S.A. High Definition TV via Satellite (Paris, France: Eutelsat S.A., 2006) 12

tied to a specific household or Set Top Box (STB). In other words, it gives the content publisher the ability to reach consumers anywhere in the world on multiple devices independent of any specific carrier or network operator using streaming technology based on the Moving Pictures Expert Group (MPEG) 4 compression standard usually. The content publisher may be from the formal media sector or the informal sector (user generated content). The model can be free-access or restricted access subject to payment. Internet Television is transmitted over the Internet using the Internet Protocol (IP), which sometimes results in it being called Internet Protocol Television (IPTV). However, most advocates of the open model Internet Television approach reserve the term IPTV for another model, namely the model of marketing video and television-type content through secure and protected IP telecom networks. 5 IPTV in this context is not television that is broadcast over the internet, but the method of sending information over a secure, private network that is geographically bound. IPTV is generally funded and supported by large telecom providers who intend providing a competitive product for digital cable and satellite broadcasting services. Traditionally, voice and broadband telecommunication networks have been viewed as a way of delivering voice, internet or data type services, however, convergence is leading to broadband networks being seen as a way of delivering a range of data, voice and video services to households. The IPTV service is often provided in conjunction with Video ondemand and may also include Internet services such as Web access and voice-overinternet protocol (VOIP), where it may be called Triple Play and is typically supplied by a broadband operator using the same infrastructure. In businesses, IPTV may be used to deliver television content over corporate local area networks (LANs) and business networks. IPTV STBs are essentially cut down PC's in their own right and are capable of interacting with other devices such as PDA's, mobile phones, and the Internet to provide a truly flexible solution allowing local information to be tailored to specific regions (e.g. weather and news from a local area). 6 The nature of internet television being based on a global internet model means that similar to the internet it is not possible to regulate this type of service as it usually operates outside the borders of countries in which it is received. IPTV in contrast, works on the same model as cable and satellite television as it entails the deployment of infrastructure and devices to access it within the borders of a country which are all managed and operated by the broadcasting service and network operator. The fact that the infrastructure deployed is based in regions and in suburbs which are connected to consumer premises (households) makes it possible to subject IPTV to regulation similar to that in place for traditional broadcasting networks. In South Africa, where there is no legacy cable television infrastructure to upgrade to digital, a greenfields roll-out of IPTV seems to make more sense than introducing digital cable television. An advantage of IPTV is that it uses Internet protocols to provide two-way communication for interactive television. It is also possible to receive Internet based service notifications for things such as incoming email while watching IPTV. If IPTV is packaged with a digital phone, a caller ID could pop up on screen when the telephone rings. IPTV is already being introduced in international markets, with providers in many countries including Japan, Hong Kong, Italy, France, Spain, Ireland, and the United Kingdom. 4 MPEG is the name of a family of standards used for coding audio-visual information (e.g. movies, video, music) in a digital compressed format. The major advantage of MPEG compared to other video and audio coding formats is that MPEG files are much smaller for the same quality. The use of MPEG is not restricted to the Internet it is the preferred compression standard on terrestrial and satellite platforms as well. 5 Good, R. IPTV vs Internet Television Key Differences. <http://www.masternewmedia.org/2005/06/04/iptv_vs_internet_television_key.htm> (4 June 2006) 6 Ibid. 13

2.1.5 Digital Mobile Television Digital Mobile Television is a new television broadcasting service that has become possible due to convergence, where the content is broadcast or streamed not to traditional television sets but to mobile phones or other portable devices. There are three main radio technology families for delivering broadcast content to mobile phones or devices: In-band cellular broadcast techniques such as the Multimedia Broadcast/ Multicast Service (MBMS) extension to Universal Mobile Telecommunications System (UMTS); Terrestrial digital broadcast networks and their extensions, such as Digital Video Broadcast transmission to Handheld terminals (DVB-H) based on DVB-T standards, Terrestrial Digital Multimedia Broadcasting, based on T-DAB standards (T-DMB), Media Forward Link Only (MediaFLO), a Qualcomm proprietary solution improving DVB-H, and ISDB-T, a Japanese digital television allowing HDTV as well as reception on handsets; and Hybrid satellite/terrestrial systems, such as Satellite Digital Multimedia Broadcasting (SDMB) in Korea, MobaHO! in Japan, and the recent DVB-H adapted for S-band and the hybrid operation concept, which Alcatel is proposing to the DVB Forum as an extension of DVB-H. It is important to note that these technologies all offer varying degrees of mobility and reception performance versus cost of deploying a network for mobile reception. 7 The principle of technology neutrality in regulation should prevail and mobile services could be allowed on any of the multitude of mobile digital broadcast platforms available, including T-DAB, DMB, DRM, DRM+ and DVB-H. There is also a potential in South Africa that DVB-H and DVB-T could be used in hierarchical modulation mode, both being broadcast from the same transmitters in a digital broadcasting network. However, such a choice by the broadcasting service and/or electronic communications network service would introduce some limitation in terms of coverage and number of services, as DVB-H requires denser coverage. This would therefore result in DVB-H being confined to only using Quadrature Phase Shift Keying (QPSK) modulation. The decision to use this mode should therefore be left to the commercial decision of broadcasting services operating on a DTT platform. 2.2 DEFINING DIGITAL RADIO STANDARDS AND DELIVERY NETWORKS There are numerous digital terrestrial sound broadcasting standards in operation throughout the world, as well as some new standards that are currently under development. The ITU Regional Radiocommunication Conference (RRC-06) on Digital Broadcasting has adopted the Eureka 147 DAB standard for countries in Africa and Europe. Eureka 147 is able to operate in the frequency ranges 174-240 MHz (Band III) and 1452-1492 MHz (L-Band). However, globally most of these services have been deployed in Band III. 7 Satellite-evolution.com. Mobile Television: Stronger Together, Weaker Apart in Satellite Evolution EMEA March/April 2006, pp. 28-36 <http://www.satellite-evolution.com/portal/_portal.cgi?page=emeaissues2006.htm> 14

The sound broadcasting sector, in South Africa, are of the opinion that the existing AM 8 and FM 9 services do not meet the needs of all South African listeners. The analogue services in the congested spectrum are currently unable to deliver on the published policy objectives to amongst others adequately serve the 11 official national languages provide the expansion of Greenfield station s service coverage and facilitate the licensing of new services in key markets 10. In certain cases, a shortage of spectrum in the Very High Frequency (VHF) - FM band prevents the licensing of new sound broadcasting services, or the expansion of existing broadcasters coverage. The introduction of digital sound broadcasting services could remedy this situation. It is argued, that the same reasoning and motivation for the introduction of DTV applies to radio and that the digitisation of radio is critical to ensure its continued relevance in a converged digital environment in the future. It should be noted that Digital Radio, in addition to what is listed below, can also be provided in the form of audio bouquets using any of the standards and platforms identified above for DTV. In the context of DSB, it is once again possible to distinguish between terrestrial, cable/broadband and satellite delivery together with the accompanying technologies or standards. 2.2.1 Digital Terrestrial Radio Digital Terrestrial Radio is more commonly known as digital audio broadcasting, which is used both to identify the generic technology of digital audio broadcasting, and specific technical standards, particularly the Eureka 147 (DAB) standard. The technology used includes Digital Radio Mondiale (DRM) globally in medium wave (MW) and short wave (SW) bands In-Band On-Channel (IBOC) in North America, Integrated Services Digital Broadcasting (ISDB-Tsb) in Japan, and Eureka 147 in Europe, Canada and parts of Asia. The main objective of radio stations converting to digital systems is to enable higher fidelity, greater noise immunity, and new services. However, since FM stereo with good reception provides hi-fi sound, digital radio systems around the world find it difficult to motivate consumer take-up based on improved audio quality alone, its introduction is also hampered by a lack of global agreement on standards. Eureka 147-DAB uses Coded Orthogonal Frequency Division Multiplexing (CODFM) modulation which is also used for the DVB family of standards and is designed to operate in Band III (174 MHz to 240 MHz) and the L-Band (1452 MHz to 1492 MHz). Roll-out of large area coverage of T-DAB services has been largely in Band III. The T-DAB rolled-out in Europe has been predominantly in Band III. The ITU Regional Radiocommunication Conference on Digital Broadcasting 2006 (RRC-06) has recommended the adoption of the Eureka 147 (DAB) standard for countries in Africa and Europe. Mass produced receivers for T-DAB (Eureka 147) are available from more than 15 different suppliers in numerous mobile, portable, car and home forms. Prices have fallen to below $77 11, but this is still more than what the lower LSMs (Living Standard Measure) in South Africa can afford. 8 AM broadcasting is broadcasting using amplitude modulation and is also often used to refer to mediumwave broadcasting (MW). 9 FM broadcasting is broadcasting which makes use of frequency modulation. 10 Independent Communications ASA. The Review of Ownership and Control of Broadcasting Services and Existing Commercial Sound Broadcasting Licences, Position Paper. (Johannesburg: ICASA, 13 January 2004) 11 www.worlddab.org 15

In the United States of America (USA) digital radio schemes maintain compatibility with traditional analogue broadcasting schemes based on a 200 khz channel allocation grid for FM and a 10 khz channel allocation width for AM, enabling an approach known as IBOC. With IBOC, both analogue and digital signals are sent in the same channel, allowing older analogue radio sets to still receive the signal. There is an increase in noise and the associated degradation to the analogue signal to noise ratio is managed through increasing the power ratio between the analogue carrier and digital signal blocks. This has the benefit of simplifying the problem of frequency allocation in the USA, since the existing radio broadcast frequencies can be used for digital transmissions. Initially, three schemes were being promoted in the USA all based on CODFM modulation, these have now collapsed into one scheme known as High Definition (HD) Radio for digital broadcasting using existing FM and AM stations. As the South African FM radio band plan is based on 100 khz channels and not 200 khz, as is the case in the US, it is not possible to introduce HD Radio in South Africa without replanning the entire South African radio broadcast frequency allocations and retuning every FM transmitter. Accordingly, the WG do not consider this technology to be viable or relevant to the South Africa situation. In addition to the T-DAB technology and HD Radio there is also DRM. Digital Radio Mondiale is an international non-profit consortium focused on designing and implementing an open-source platform for digital radio broadcasting, especially on shortwave. DRM uses COFDM technology and can operate in several modes with varying degrees of spectrum bandwidth requirements, signal robustness and audio quality. One hybrid mode allows both digital signals and analogue signals to be combined and broadcast simultaneously. In this mode the digital audio quality is highly limited and voice based speech codecs are used. With multiple 9 khz channels combined DRM can deliver FM-like quality stereo services. The main advantage of DRM is that it provides a means of radically improving the audio quality of services using frequencies below 30 MHz. Depending on the mode selected DRM can also transmit other digital data besides digitised music, including text, pictures, and computer programs (data-casting) as well as RDS-type 12 metadata or programme-associated data like DAB does. DRM has been designed especially to use older transmitters designed for audio AM, so major new investments are not required for early adopters. The encoding and decoding can be performed with digital signal processing, so that small computers added to a conventional transmitter and receiver can perform the rather complex encoding and decoding. The WG hold the view that it may benefit South Africa to investigate opportunities for the introduction of broadcasting services using the DRM standard. DRM+ is an extended version of the existing DRM standard, which is being developed to operate in all broadcast bands below 120 MHz; i.e. primarily the VHF-FM Band 87.5-108 MHz. DRM+ is being developed to meet a requirement by certain European and South American broadcasters who need a switchover path to digital broadcasting for both AM and FM systems using a single standard. Given the current utilisation of the FM Band in South Africa, and the demand for additional sound broadcasting services, DRM+ may provide a solution to the problem in future. The standard for DRM+ is expected to be adopted by European Telecommunications Standards Institute (ETSI) in 2007, and the design, development and testing phases are expected to be completed by 2008-2010. 12 Radio Display System (RDS) is a radio broadcast technology for displaying the artist, album, and track title information on FM radio receivers. 16

As currently envisaged the standard will require bandwidth within the FM band and will require broadcasting services in the FM band to be switched off before the DRM+ services can be introduced. DRM receivers are not currently available nor mass produced. Japan in contrast to other countries has adopted a different technology that it developed called ISDB as its DTV and DSB format to allow radio and television stations to convert to digital. This standard, which has not been used outside of Japan, would not be recommended by the WG as there do not appear to be worldwide economies of scale developing to reduce the costs of the radio sets based on this standard. 2.2.2 Digital Satellite Radio Digital Satellite Radio can be described as a satellite-based direct-broadcast radio service in which digitally encoded audio entertainment material is broadcast to terrestrial-based receivers, either directly from an orbiting satellite, or in cases in which the receiver is in a shielded location--from the satellite to the receiver via a terrestrial repeater station. Unlike, Digital Terrestrial Radio, Digital Satellite Radio services are commercial business entities, which offer a package of channels as part of their service requiring a subscription from end users to access its channels. Currently, the main providers are WorldSpace, XM Satellite Radio and Sirius Satellite Radio. Satellite radio uses the 2.3GHz S band in North America, and generally share the 1.4GHz L band with local Digital Audio Broadcast (DAB) stations elsewhere. It is a type of direct broadcast satellite, and is strong enough that it requires no satellite dish to receive. Due to the high orbit of the satellites, two or three are usually sufficient to provide coverage for an entire continent. Local terrestrial repeaters may be required to enable signals to be available if the view of the satellite is blocked, for example, by high rise building in metropolitan areas. XM Satellite Radio and Sirius Satellite Radio dominate the American market with satellites providing coverage for the continental USA. This dominance extends into Canada as both satellite radio providers are partners in two of three satellite radio services which have applied for licences in Canada and been approved by the Canadian Radio-television and Telecommunications Commission (CRTC). Elsewhere in the world, WorldSpace tends to be the main sound broadcasting player and it has its own satellites covering most of Europe, Asia and Africa. Only proprietary WorldSpace receivers can receive the signal and many of the programs are available only to subscribers. Of course all the satellite subscription television broadcasting services also provide an audio bouquet in addition to their television bouquets. The main difference being that they target the household, rather than the car and mobile receiver market primarily addressed by satellite sound broadcasting services. In 1992 the ITU World Administrative Radio Conference ( WARC 92 ) allocated the frequency band 1 452 1 492 MHz to the broadcasting service and the broadcastingsatellite service. In terms of the provisions of ITU Radio Regulation No 5.345 ( RR 5.345 ) the use of the band 1 452-1 492 MHz by the broadcasting-satellite service, and by the broadcasting service, is limited to digital audio broadcasting and is subject to the provisions of Resolution 528 ( Res 528 WARC 92 ).The South African Table of Frequency Allocations (SATFA) confirms the allocation of the band 1452-1492 MHz to digital audio broadcasting and states in the foot note that This band has been allocated internationally for use for digital broadcasting (S-DAB and T-DAB). Due to the fact that satellite radio experiences dead spots (satellite shadows) and multipart interference in metropolitan areas in between skyscrapers, the Federal Communications Commission (FCC) adopted rules allowing for the licensing of 17

complementary terrestrial repeaters operating in the same frequency band to resolve the problem. The receiver switches automatically from satellite to terrestrial repeater without any interruption in service. The WG suggests that when ICASA licenses satellite sound broadcasting services they must plan and assign terrestrial frequencies for complementary terrestrial repeaters. 2.2.3 Internet Radio and Mobile Radio Internet Radio is a broadcasting service, which is transmitted via the Internet using streaming technology based on any number of audio compression standards and media players. Internet Radio can be the re-broadcast of a licensed terrestrial radio station, but many internet radio stations are independent of traditional terrestrial radio stations and only exist on the Internet. As the service is streamed over the internet it is possible to access the stations from anywhere in the world. Internet users tend to find internet stations by going to online radio networks, such as Live 365 or SHOUTcast which list thousands of Internet Radio stations covering a variety of music genres. The Internet Model means that it is not really possible to regulate Internet Radio at a national or local level and regulators in most overseas jurisdictions tend to exempt Internet Radio from licensing regimes. In contrast, Mobile Radio is a new sound broadcasting service that has become possible due to convergence, where the content is broadcast or streamed not to traditional radio sets but to mobile phones or other portable devices. As this service is linked to national, regional or local networks, it is capable of being regulated in the same manner as traditional broadcasting services. It utilises the same three main radio technology families for delivering broadcast content to mobile phones or devices, as were identified for digital mobile television RECOMMENDATIONS: Based on the above discussion on digital broadcasting standards, the WG makes the following technical recommendations, namely that: 1. Based on decisions taken at the ITU Regional Radiocommunication Conference 2006 (RRC-06), the DVB family of standards should be adopted in South Africa for digital television broadcasting. 2. The principle of technology neutrality in regulation prevails and mobile broadcasting services must be introduced on any platform using any mobile digital broadcasting standard. 3. In the digital switchover process, provision should be made for the introduction of at least one DVB-H mobile broadcasting service on the frequencies planned at RRC-06 for metropolitan digital transmission networks in South Africa. 4. The Eureka 147 (ETSI EN 300 401) and Digital Radio Mondiale (DRM) (ETSI ES 201 980) standard be adopted as complementary standards for digital sound broadcasting in South Africa. 5. The temporary allocation for T-DAB in 238.432-239.968 MHz in the current National Table of Allocations must be made permanent and licensed without further delay to allow for the introduction of a multi-channel Digital Sound Broadcasting Service in South Africa; 6. As there is currently no global standard for digital satellite sound broadcasting, market forces should be allowed to dictate the take up of digital satellite sound broadcasting in South Africa; and 7. When ICASA licenses satellite sound broadcasting services the regulator must plan and assign terrestrial frequencies for complementary terrestrial repeaters. 18

2.3. STANDARDS, FORMATS AND APPLICATIONS RELATED TO DIGITAL BROADCASTING 2.3.1 Image Quality and Digital TV Formats Standard TV signals are made up of 625 lines of resolution, Digital Versatile Disks (DVDs) are digitally made movies, which means are of a better visual quality than movies broadcast on standard TV. HDTV allows for even better resolution. RESOLUTION COMPARISON 13 There are 18 "standard" digital television formats. Each one provides a different picture quality. The 18 standards fall into 4 broad categories: 480i - (square-screen only) digital version of the best current television signals; 480p - (square or widescreen) also known as "standard definition"- has the same detail as today's television signal but looks sharper;. 720p - (widescreen only) this HDTV format provides an image just about as good as 1080i, while allowing other 480p signals to be broadcast at the same time; and 1080i - (widescreen only) the HDTV format that allows the most detailed image available from broadcast TV. The number refers to the number of lines of vertical resolution. The letter refers to the way the TV makes the picture, either Progressive (p) or Interlaced (i). Because a "p" image looks sharper than an "i" image, the number of lines of resolution can be reduced and still result in a good-looking image. So a 720p image looks just as good as a 1080i image. At these resolutions, image clarity is more a result of the quality of the film the program was shot on, and the quality of the transfer to video, rather than the resolution it is transmitted in. The standards falling under the 480i and 480p format categories are referred to as SDTV. The WG would suggest the use of the 480p for SDTV as it allows for sharper image quality and can accommodate both 4:3 and 16:9 ratios. The main HDTV standards, as mentioned above, are 720p, 1080i and 1080p. 13 These images are not actual TV images, since you can't truly demonstrate different resolutions on paper. They are accurately rendered approximations designed to demonstrate the real difference between the video formats. Source: http://www.wnep.com/global/story.asp?s=709431 (Used in this document with the permission of webmaster) 19

Another aspect to standards that needs to be considered is the compression standard used. Obviously, the higher the definition or resolution, the higher the data rate required to transmit the picture for real time video. Therefore, the higher the efficiency of the compression system, the lower the bandwidth required for transmission of the signal. For this reason, only MPEG4 Part 10 should be considered for HDTV transmission (emission). The 1080p standard will deliver the highest quality video, but is not yet a viable option for broadcasting. Most HDTV displays (plasma displays) require progressive scanning and convert interlaced formats to progressive prior to display. Progressive scanning is therefore the preferred standard. The choice is therefore between 720p/50 and 1080i/25. The 1080i system offers more than twice (1920X1080 = 2.07 million pixels) the number of pixels of the 720p system (1280X720=0,92 million pixels). The WG holds the view that South Africa should therefore adopt the 720p standard now, with a view of moving to 1080p as the technology improves (See Annexure D Technical Report for a more detailed analysis). Based on current compression standards it would not be advisable to implement HDTV terrestrially during the digital switchover, as one HDTV channel would significantly reduce the number of channels that could be accommodated on a single frequency. It would therefore not be wise to roll out HDTV terrestrially initially, but to first wait for spectrum to become free with the switch-off of analogue services. Any spectrum planning exercise should keep in mind the spectrum requirements of future terrestrial HDTV. In the mean time, HDTV could be rolled out on DTH or IPTV. In Europe, an HD ready label scheme has been put in place to enable consumers to identify equipment capable of providing an HD picture. The HD Ready label for TV sets requires: the 16:9 wide screen format; a minimum resolution of 720 lines (and 1280 dots per line); compatibility with the two HD production and reception formats (1080i and 720p); dual analogue input (YUV, DVI and HDMI), to ensure compatibility with other audio-visual equipment in the household (decoder, camcorder, player and recorder). In South Africa, the benefit of a labelling scheme would be to allow consumers to make an informed choice when purchasing a TV set, with a view to being ready for when HDTV broadcasts commence on digital broadcasting platforms. RECOMMENDATION: The WG makes the following technical recommendation, namely that South Africa consider implementing a HD Certified labelling scheme and adopt the following minimum standards for High Definition TV (HDTV): MPEG4 Part 10 with AAC and Dolby AC3 support; 720p standard now, with a view of moving to 1080p; and HDMI interface. 20