DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Research Report November 2008 Prishtina
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Copying and use of this document is prohibited without the permit of the Independent Media Commission 2 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Table of Contents Abstract... 4 THE HISTORY OF DIGITAL TRANSMISSION IN THE EUROPEAN UNION... 6 General conditions and legal issues in digitalization... 6 THE ROLE OF THE INTERNATIONAL TELECOMMUNICATION UNION... 8 RELATIONS: REGULATOR TRANSMISSION ENTITY TRANSMISSION NETWORK VIEWERS OF ANALOGUE AND DIGITAL TRANSMISSION... 10 THE ROLE OF LEGAL REGULATORS LEGAL FRAMEWORK CREATED... 11 Summary... 15 Frequency allocation for Multiplex and Multiplex management... 16 Public notification on digitalization process... 16 THE ROLE OF TELECOMMUNICATIONS INDUSTRY... 17 Financial support... 17 THE DIGITAL SWITCHOVER PROCESS EXPERIENCE IN OTHER... 20 Necessary resources for a switchover: human and material public and private... 20 CONCLUSION... 22 Other influential elements in introducing DTT... 23 Drafting a strategy for digital switchover... 23 Recommendations:... 25 Difficulties encountered in our research...26 A TERMINOLOGY GLOSSARY OF DIGITALIZATION... 27 REFERENCES:... 31 copyright 2008KPM 3
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Abstract The purpose of this study is to analyse experiences of regional countries and European Union Member States in the process of terminating analogue broadcasting and enhancement to digital broadcasting. This study shall be used by the Independent Media Commission to open a public debate on drafting a Strategy on Digital Broadcasting in the Republic of Kosovo. The ICM has commissioned the MPR Group to compile the study, denying it though any right to dissemination of this study to other institutions. This research has gone through internet and relevant documents related to digitalization of frequencies, such as various strategies from regional countries and documents coming from international conferences on this field. Also, direct information from regulators of several countries to be studied have been taken into account. All these materials have been analysed, resulting into the best and most suitable experiences that can be applicable and possible for the Republic of Kosovo. Hence, we thing that this study has realized the ICM s intention to inform a public debate on drafting a relevant strategy on digital transmission in the Republic of Kosovo, and we believe it shall be a good guide towards drafting a Strategy. 4 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU INTRODUCTION European Union Member States have already begun changing from analogue televisive frequencies towards digital transmission, in compliance with the objective of the EU for a total transfer to digital transmission in all Europe, by 2012. Digital television broadcasting has numerous advantages in comparison with the analogue technology. The key element related to this development is the fact that digital technology still uses the frequency band, though at a much higher efficiency rate. This means that citizens will have a wider choice of channels, and also it provides more television providers access to the public. In comparison with the analogue broadcasting, which as stated above, takes a wide range of frequency band, digital broadcasting has much less, or even none, intereferences, while the visual and audio quality is much higher. Also, the electricity demand is much lower on the digital broadcast side, which means that the operational costs of digital broadcasting are much lower, and the impact of radio-television waves to our environment is much smaller. The digital technology provides the possibility of combining televisive broadcasting with additional services, which should bear a great importance for educational programs, and providing opportunities for disabled persons to take part in programs, by using interpretation for the visually impaired, reducing background noise for the hearing impaired, sign language for the deaf, etc. These are several reasons of the television world, including production and electronig distribution is progressing towards digital technology. The progress towards digital broadcasting in Europe is still ongoing. Several EU countries have already completed their digitalization process. Also, many countries have already launched their Digital Terrestrial Transmission (DTT) 1 services, and have initiated planning on terminating analogue transmission. Still, terminating analogue transmission is not the easiest task, both in the technical aspect and legal infrastructure wise. Termination of analogue services may have terrible consequences if viewers are not adequately prepared to accept their digital TV signals, which means that a great number may be hampered their access to television. Obviously, no country in the world would not wish to risk impairing citizens access to TV programs, and it would strictly ensure that all proper steps are taken to provide access to all citizens to these services. Nonetheless, this shall require careful planning and involvement of the whole transmission/media industry, and specially the regulatory authorities. 1 DTT, DVB-T or DVB-H, digitial transmission methods, where basic audio and video signals are converted, regulated and encoded into a digital format and dispersed as such; compression enables a frequency band of width 8 MHz VHF and 7 MHz UHF to provide three up to five different programs, the digital method has a transmission gain of 10 db in comparison to the analogue method, due to a greater sensitivity of digital receivers and signal reception procedures (moduling, coding report, interval saving, encoding), it enables mobile reception; Reception requires a boundary, from within or outside, coverage of a greater area requires a network which may operate as a Single Frequency Network SFN or Multi Frequency Network MFN, the latter being more efficient, but yet difficult to plan and implement copyright 2008KPM 5
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Experiences of countries which have already completed the termination of analogue transmission or have already engaged in wide planning towards this process, may provide useful lessons for countries in an initial stage of planning, like Kosovo is. THE HISTORY OF DIGITAL TRANSMISSION IN THE EUROPEAN UNION General conditions and legal issues in digitalization In September 2003, the European Commission had published a Statement on transferring from analogue transmission to the digital (from digital switchover to switch=off the analogue), presenting the benefits of transferring into digital transmission, researching on several directives of transmission regulation policies, and inducing a debate on EU Directives, on the usefulness and the future utilization of frequency ranges freed from the withdrawal of analogue television broadcasting. In November 2003, the European Union Policy Group 2 on Frequency Ranges (RSPG), had published an opinion on the impact of switching over to the digital transmission to the range. The report developed its positions taking into account an analysis of switching plans of Member States, published by the e-europe Framework 3, the 2005 Action Plan and the RSPG opinions. The Statement had also presented the findings of studies commissioned by the EU Commission on range advertisement and liberalization, and on transmission wave management. The primary objective of switching to the digital transmission is providing the possibility of expanding the frequency range or width, since at the moment it is a scarce or limited resource, and it does not provide the necessary space for transmission in analogue broadcasting, especially in televisive broadcasting. Thus, in comparison to digital transmission, analogue broadcasting needs a wider frequency range. Lacking digital transmission, the existing frequency range may very soon be overloaded. This results into an increased transmission cost, and represents a considerable obstacle to investment in new technologies. Termination of analogue transmission and replacement with digital transmission, by using several types of various transmission technologies and platforms would considerably free the frequency range, thereby fulfilling the EU objectives. 4 2 http://ec.europa.eu/information_society/policy/radio_spectrum/ref_documents/index_en.htm 3 eeurope 2005 European Information Society Development Action Plan was approved in June 2002 in Sevilla, and its objective is to develop e-business, e-learning, e-healthcare, and e-administration, built upon safe frequency links; the point 3.1.4 of the Action Plan related to measures on use of frequency links lists radio frequency wave measures, use of frequencies in less populated regions, elimination of barriers for wider frequency utilization, content of various platforms and switching to digital transmission. It provides on an situation assessment in important EU Member State markets and adoption of national implementation plans for switching to digital transmission; the e-europe 2005 Action Plan is completed by the end of 2005 to be replaced by the i2010 Strategic Framework 4 Digital Switchover in the European Union, European Satellite Operators Association ESOA ; 4thDecember 2006, Riga; www.esoa.net; 6 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU A special attribute of this objective lies on an ongoing development of an informed society, with knowledge based information, open access for all consumers, and non-discriminatory access to data transmission services offered by service providers. The problem of a digital division, which would reserve the benefits of an informed and networked society for a so-called info-elite, and alienating large parts of society from such development, may be avoided by providing the infrastructure enabling all consumers to fully access to services and audio-video content of communication. In this context, digitalization of transmission bears a very important role as a content and data dissemination tool to the information society. Migration from analogue to digital technology also allows for a greater capacity to all platforms (terrestrial, satellite and cable). Migration from analogue to digital technology also allows for a greater capacity to all platforms (terrestrial, satellite and cable) and provides for a more efficient utilization of the frequency range, which is specifically relevant to terrestrial transmission. These would have a positive effect on providers, but also consumers. For content and service providers, dissemination would be easier and less costly in the financial aspect in a digital era, due to a greater data capacity availability. Following migration towards digital data transmission, consumers may expect more channels, and new types of content and services. http://www.esoa.net/v2/events/assets_20061204_digitalswitchover/20061204_digitalswitchover_presantation _ESOA.pdf copyright 2008KPM 7
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU THE ROLE OF THE INTERNATIONAL TELECOMMUNICATION UNION The International Telecommunication Union 5 (ITU) is a leading United Nations agency responsible for information technology and communication, a focal point for network services and development, in both government and private sectors. For more than 140 years, the ITU has coordinated the global dividends 6 of radio frequency range utilization, it has promoted international cooperation in defining satellite orbits, it has been active in improving communication infrastructures in the developed world, and has set standards for the whole world, guaranteeing interconnection sustainability in a wide communication system. The Geneva Agreement 2006: the International Telecommunications Union approved a frequency range for transmission services in 2006, which is of essential importance for digital terrestrial transmission of both audio and video broadcasting. The Geneva Agreement 2006 (GE-06) provides on use of frequencies by Europe, Africa transmitters and parts of Asia 7. This agreement creates two separate plans for analogue and digital environments in these regions. Hence, the GE 06 Agreement is a mandatory international treaty, signed by national administrations and registered with the United Nations. Frequency management before GE-06: In Europe and several parts of Asia, GE 06 replaces the existing Stockholm Treaty (ST-61) 8 which had regulated frequency management in analogue transmission environments. Since the ST-61 Treaty had also regulated use of frequencies for services in bands I and II, several parts of the ST-61 and other deriving agreements remain applicable. While allocating only 5,300 State requests, the ST-61 has provided the necessary flexibility to ultimately allow for the functioning of 80,000 analogue transmitters. One may only hope that the GE-06 will also allow for such flexibility in the future. In 2004, the first session of the Regional Radio Communications Conference was held for three weeks in Geneva, to set forth planning parameters for an entirely digital transmission environment. The second session convened in 2006 and developed a digital plan, but also the analogue plan, based on revisions made to ST-61 and GE-89 9. This Conference concluded successfully with the adoption of the GE-06 Treaty. Switching off analogue transmission: The GE-06 Treaty sets an accurate date, June 17, 2015, as the end of transitional period of the switchover from analogue to digital transmission. This means that after this date, Member Countries would not need to protect their analogue services from neighbouring countries, and may freely use frequencies allocated separately to each country within the GE-06, for their digital services. 5 http://www.itu.int/net/about/index.aspx 6 The term dividend is related to frequency allocation, the so called range dividend frequencies or range to be freed following switchover from analogue to digital transmission, due to 3-6 series of increased efficiency in the use of range and digital data compression. A term presented by the European Commission in presenting the market approach to discussing frequency range. 7 http://www.digitag.org/dttresources/ibc06/digital_future.pdf 8 http:// www.itu.int/itu-r/conferences/rrc/rrc-06/reviewst61/index.asp 9 http:// www.itu.int/itu-r/terrestrial/broadcast/plans/ge89/index.html 8 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU However, such a move will require a preliminary agreement of the States affected by it. Affected countries are defined as countries within a plan introduction needing an agreement prior to implementation of a function/allocation. But it also means that analogue services will not be protected anymore, and neither will they be available within boundaries, and that would function as an incentive to terminating analogue services for the whole country. Following the decision of the Regional ITU Conference on Radio Communications (hereinafter referred to as the ITU RRC Conference -04/06)" held in 2004, several activities have been held within the timelines adopted during the first session of the conference. Individual countries telecommunications administration had served their demands in a so called planning exercise, so that they would be assessed in the view of compliance. Due to delays in resolving various political processes, the Republic of Kosovo has stalled behind in the process, and it has not engaged fully in this development process. The main cause of this stalling was the fact that the Republic of Kosovo, due to its unresolved political status, was not able to take part in the ITU conference, held in Geneva in 2006. This Conference (GE 2006) was very important in coordinating frequency ranges, and allocating frequencies for digital transmission for the whole Europe, including the Republic of Kosovo. In the absence of Kosovo representatives, the neighbouring country of Serbia decided on allocating frequencies in the frequency range of the Republic of Kosovo. In this view, the Republic of Kosovo was damaged, hence the best solution would be for the Republic of Kosovo to initiate the process of applying for membership to ITU as soon as possible and demand review of allotment as a result of the GE 06 treaty. copyright 2008KPM 9
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU RELATIONS: REGULATOR TRANSMISSION ENTITY TRANSMISSION NETWORK VIEWERS OF ANALOGUE AND DIGITAL TRANSMISSION SION Digital television transmission already exists, or is being prepared in several countries of Europe. In bringing about a study report, through an analysis of European Union and regional experiences, to be used in preparing the Republic of Kosovo for the digitalization stage, the countries shown below have been selected, taking into account relevant developments of each and every country in preparations of digitalization. Thus, these are the countries from which we have considered experiences in switching from analogue to digital transmission for the study: 1. Germany 7. Macedonia 2. France 8. Albania 3. Italy 9. Montenegro 4. United Kingdom (UK) 10. Bosnia and Herzegovina 5. Sweden 11. Croatia and 6. Slovenia 12. Serbia Out of the countries selected for the study, Sweden is the only one that has completed the process of switching over from analogue transmission and implemented digital transmission for the whole country. On the other hand, other countries selected for the study are in the process of terminating analogue transmission and have partly begun digital transmission (France, Austria, United Kingdom, Italy, Germany). Slovenia and Montenegro have already drafted a digital switching strategy, while Bosnia and Herzegovina, Albania, Macedonia, Croatia and Serbia are in the process of drafting a strategy for switching over to digital transmission, and creating the overall legal framework for such a transfer. Based on experiences of several countries listed above, relations between regulators and transmission entities will change with the switchover, resulting from the necessity of involving the multiplex operator, which would technically manage realization of program transmission. This means that apart from regulating the content aspect of the program, the regulator would be required to regulate also the technical aspect and allocation of transmission frequencies for the multiplex operator. This will have a great impact on allocating frequency ranges to multiplex operators 10. However, the regulatory model chosen by various countries on allocating digital frequency capacities has also been considered as a factor affecting DTT. 10 part of the digital transmission system in telecommunications, which combines many channels/programs, and transmits them into a common transmission system, DVB in terminology. This refers to the whole system operating into a single frequency channel, into SFN or MFN network and offering four or more different programs, depending on compression (MPEG2 or MPEG 4). 10 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Very different regulatory approaches have been adopted, and in the majority of cases, such as in Germany, United Kingdom, Italy, etc., the capacity is allocated to one or more multiplex network operators. In other cases (e.g. Sweden), the capacity is allocated directly to the channels. In assessing the regulatory model, what is relevant rather than who is capacity allocated seems to be the approach to regulating capacity allocation. It seems that there are two different approaches. The first approach would be for the channels to be sorted as a result of a selection made directly by the regulator, through public procedures very similar to those used in the analogue environment. Hence, in this case, if frequencies are directly allocated to the transmitter or network operators, placement of channels into the capacity is predefined by the regulator. In the second approach, the capacity is managed in its entirety by the multiplex network operator, which is relatively free in using capacity and selecting channels to be part of the package. In this case, there would be several limitations or obligatory requirements with a view of preserving public interest objectives, such as diversity and media pluralism. In this way, the analogue transmission entity, by switching over to the digital transmission, will mainly deal with providing program in the content aspect. The regulator must be very diligent in deciding on who will be the multiplex operator, based on other countries experiences (Sweden, France, United Kingdom, Italy, Slovenia, etc.), with a view of avoiding any effects of monopolization or discrimination. THE ROLE OF LEGAL REGULATORS LEGAL FRAMEWORK CREATED Based on document analysis, namely strategies, an important role in initiating the digitalization process was assigned to transmission regulators in almost all states, by proposing initially establishment of working groups, involving all relevant stakeholders from the public and private sectors in creating the legal framework, by drafting and adopting laws on digital transmission, or any other subsidiary legislation on regulation of digital transmission. Below we will in a summarizing manner present experiences which may be considered as most relevant in several countries selected for the study. Albania: Faced with an increasing pressure of stated plans for establishing digital television, the regulatory authority has drafted a Strategy for switching over to digital transmission, and further it took an initiative to amend the law on Transmission. The Draft Strategy provides a short overview of the existing situation in the frequency plan and development of television, an overview of benefits and weaknesses of introduction of digital television, potential scenarios, licensing critera and a potential plan for switch over, and recommendations for success. Albania plans to switch over to digital transmission and terminate analogue transmission based on four different scenarios: 1. The first scenario provides for maximal protection of analogue frequencies, by leaving it to the operators to decide when they will be ready to switch to digital transmission. copyright 2008KPM 11
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU 2. The second scenario also suggests protection of analogue frequencies, but only for a short period of time, which should be defined. Further, introduction of digital operators would follow. 3. A third scenario does not make any effort in protecting existing networks frequencies, but instead, provides on transforming all analogue frequencies to digital. 4. The fourth scenario entails an immediate study and development of a digital frequency plan, without consideration of the existing analogue network. Following realization of these scenarios, the expectation of switching over to digital transmission and termination of analogue transmission is for the time period of 2016 2020, however without setting any amount of penetration of digital transmission to the country. Anyway, the current draft strategy seems to not have a clear vision on the importance of content and positions on clear rules set on such a point. Macedonia edonia: Since there is a Law on Transmission, Macedonia has initiated the compilation of a strategy for switching to digital transmission, while the implementing partner of the Project is the Transmission Council. On these grounds, the Draft Strategy includes all necessary analysis on digitalization, starting from the purpose, implementation needs, benefits, effects, financial aspects and establishment of key milestones for the transition from analogue to digital transmission up to the final stage. Montenegro: Regulatory authorities for transmission and telecommunications, within their competencies and exercising mutual cooperation, have a key role in defining and undertaking allocation of frequencies in a transparent, efficient and timely manner. Their essential input is promotion of the process and ensuring a wide forum of opinion exchange, knowledge of problems and possible solutions. Since 2002 the transmission sector has been regulated by the Law on Transmission. Other important segments in the regulatory aspect are: the Law on Public Transmission Services Montenegro Radio and Montenegro Television, and the Law on Media, all of them approved in 2002. It is expected that by the end of 2008 these laws will be revised, adopting new or amended solutions to enable and stimulate the process of switching from analogue to digital transmission systems. Acceptance of specific attributes of the process, a decision on legislative intervention must be approved as soon as possible, to result into: - A clear setting of timelines for termination of analogue transmission; - Clear rights and obligations for entities active in planning, funding, implementation and promotion of digitalization; - A framework, which would recognize the results so far in the sector development and in enabling further harmonization with European Union and European Council standards in the sector of audio-video services, and in the sector of electronic communications. Starting from human and technical resources for completion of this process, regulatory authorities shall also have an important role in quality and temporal assessment of the process. Recognition of the amount of time available (by the end of 2012) within which all important stages would be implemented before termination of analogue transmission, 12 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU competent state authorities and regulatory authorities are bound to ensure a maximal coordination of their activities in a view of being able to cope with deadlines. Serbia: Knowing that the existing Law on Transmission Regulation does not deal with digital transmission, Serbia has recognized the need to regulate digital transmission in a comprehensive way through a new law, or by amending the existing one, since in a difference from analogue transmission, digital systems represents a chain in which, from program production and up to transmission, there are several actors (content provider, multiplex operator, transmission provider). In this way, the relations between content providers, multiplex providers and transmission providers are in the process of definition, and this is expected to be achieved through a Law, which as is stated above, will be a new Law or the existing one will be amended. In this stage, the regulatory authority has an obligation of initiating and supporting the digitalization process, through planning of obligations for special televisive channels charged with the duty of initiating experimental digital transmission. Also, the regulatory authority is required to provide, through its decrees, access for all transmitters interested on experimental digital channels. Still, Serbia for the moment is only in the stage of preparing for drafting a Digitalization Strategy. Slovenia: the role of the Regulator in Slovenia is mainly related to preparing tenders for the Multiplex operators and for licensing programs in the DTT network. It also monitors the DTT network, decides on the date of transition of transmission, defines termination of analogue transmission in a geographic aspect. Meanwhile, in relation to the legal framework in Slovenia, there is already a law on Digital transmission, and there are several laws that have been amended, such as the law on electronic transmissions, the Law on Media, and a Strategy has been drafted on switching over to digital transmission. United Kingdom: the objective of transition to digital transmission is for all television channels in the United Kingdom to migrate to digital transmission by the end of 2012; in a way, this makes it a simple and positive experience for the viewers, and provides necessary assistance for those who need it. Meanwhile, the main role of the regulator (Ofcom) in the United Kingdom is mainly to ensure that the regulatory regime ensures security on licenses in relation to their obligations for implementation of switchover from analogue to digital transmission. The digitalization process management is provided by Digital UK 11, a non-profit company leading the digitalization process in the United Kingdol, while the role of Ofcom is in licensing transmission entities, planning frequency ranges and providing assistance in issues of coverage. Also, the regulatory authority will have an important role in providing the opportunities for a timely completion of the frequency plan for switchover, and in ensuring necessary international agreements (from the RRC and through bilateral negotiations with neighbouring countries), and in providing for a fair and efficient competition between all digital televisive platforms. 11 http://www.digitaluk.co.uk/ copyright 2008KPM 13
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Germany the situation of the legal framework: The role of the regulatory authority for Telecommunications and Post has created a basis for frequency allocation with the telecommunications legislation, and has completed the procedure for frequency allocation for digital terrestrial transmission programs and other telecommunications services in Germany. The Federal Government and Federal States have taken a number of steps in completing the legal and regulatory frameworks. Based on an analysis of actions in digitalization in Germany, all applicable rules for switching over from analogue to digital transmission are included with the Order on Frequency Allocation, which was included within the Bundesrat. Italy: The regulatory authority named Agicom had initially established a National DTT Commission, gathering transmission content providers, multiplex operators, the industry actors, universities, and sector think-tanks to contribute to drafting of the Law on Switchover to Digital Transmission. The results of four study groups were presented by the regulatory authority to the Italian Parliament. In 2002, the Italian Parliament adopted the Law which provided on complete switchover from analogue terrestrial television to the digital transmission. Another important role of the Regulator was to decide on objectives for environment planning, which would be fully covered by digital transmission. In this way, the plan prepared by the regulatory authority was used to help plan termination of analogue transmission, also in planning possibilities for allocating capacities for additional multiplexes which would become available following termination of analogue transmission. Based on an analysis of legislation prepared by the regulator in Italy, AGCOM has a mandate to regulate multiplex operators, in which multiplex operators are bound to provide independent content providers and transmitters access to up to 40% of the multiplex capacity. 14 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Summary Based on analysis of experiences of countries listed above, one may notice that a key role in initiating the digitalization process, creating working groups for drafting the general legal basis, is assigned to the regulatory authority. Through a well defined legal basis, clarity would be provided for actors taking part in the digitalization process, and in this way, sufficient grounds would be provided for a quality transmission environment and creating local competition, which would ultimately be compliant with European standards. In relation to this, according to experiences of the majority of countries, the role of the regulatory agency in the process of switching over to digital transmission is incorporating highquality activities. As about the main activity, policy-making, the regulatory agency seems to be the support to the legislative body in drafting relevant acts on termination of analogue transmission. In relation to policy implementation, the main activity of the regulatory authority is to draft and complete licensing procedures, followed by frequency allocation and structure of multiplexes. From the experiences of countries already launching the DTT, the regulatory authority seems to be increasingly involved in challenges coming from the switchover to digital transmission. Technical, economic and legal competencies of the regulatory authority will be vital in designing the most suitable regulatory framework. Also, like in the terrestrial transmitters scenario, transmitters will in the majority of countries become network operators and so in the new European Framework for Electronic Communication Networks, new knowledge and professional capacities should be gained, in the manner of managing this dual nature of transmission, which in the one hand would be regulated as a communication network, and an audio-video content network in the other hand. Hence, the role of the regulatory authority in developing DTT, in its own function, would be in guiding and coordinating termination of analogue transmission, by policy-making, supporting activities and drafting relevant legislation. Also, an important role should be taken in implementing policies and frequency allocation, defining licensing procedures, regulation on access to digital platforms, selection of network operators and influence on content of multiplexes, and ultimately, a special role would be assigned to regulators in dispute settlement between channels and transmission platforms. copyright 2008KPM 15
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU Frequency allocation for Multiplex and Multiplex management Based on an analysis of steps taken by countries selected for the study, as stated above, the regulators have an important role also in allocating multiplexes and their management. Multiplex frequencies are allocated through open competition. Application must include important attributes of a multiplex, such as frequencies, coverage area, capacity of channel, technical standards to be complied, volume of reserved capacity, etc. To be a multiplex operator, a legal entity must obtain approval through open competition for use of frequencies for multiplex, digital transmission, mobile television and other innovative services. Based on experiences of countries selected for the study, the operator pays a fee for frequency use, depending on the type of multiplex. Limitations must be defined in relation to a maximal number of multiplexes (e.g. two or three) which will be available for the multiplex operator. A multiplex operator will sign an agreement with consent providers and the infrastructure owner/manager, through which multiplex signals are disseminated. Multiplex operator must be the consent provider, but in this case the operator s activity must be performed by a legally independent company, or a company keeping separate accounts on activities related to multiplex management. A multiplex operator must provide equal and non-discriminatory conditions for all consent providers to have access to the multiplex under its management. This is applied even in cases when the multiplex operator is also the consent provider. Competition must define the multiplex parts that may be used for own purposes and parts that will be offered for other interested parties. Public notification on digitalization process State assistance is necessary to describe measures to encourage dealers and citizens to obtain digital receivers, to stimulate development of the industry for producing STB equipment and to motivate operators in planning and developing digital transmission networks. Incentives must be carefully given, by respecting conditions for provision of state assistance. Incentives for obtaining equipment must be technologically neutral and must refer to equipment of open interaction standards. Incentives for development of digital transmission networks may be justified only where signal coverage is relatively poor, or inexistent, and at the moment there is no real offer and/or financial sustainability for a private initiative of development in these locations. 16 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU THE ROLE OF TELECOMMUNICATIONS INDUSTRY Based on analysis and interpretation of countries strategies in the study, we have concluded that a strategy for switchover to digital systems must be a well coordinated process in time and space, and must be acceptable to all parties involved. In the transitional stage, introduction of digital transmission systems will create an additional cost to all involved parties. Still, there are long term positive effects for digital transmission systems end-users and for all involved parties in implementation. By an analysis of the Montenegrin strategy for switching over to digital transmission, an immediate setting of a date for terminating analogue transmission and specification of STB and other equipment will enable provision of a proper quality offer and consumer (viewer) protection, and there will be reduced opposition towards imposing replacement of receivers. Any delay in setting a deadline for terminating analogue transmission increases the cost for actors in the chain of production, distribution and especially in consumption of audio-video services in a digital era, since advertising campaigns for a certain type of reception equipment may decourage sales of another type. All these, instead of decouraging, may in fact encourage purchase of analogue equipment, and ultimately, consumer dissatisfaction faces an inevitable sale of digital receivers. In this way, immediate setting of clear deadlines shall stimulate the replacement of reception basis and will facilitate the process. Financial support Often, less privileged society members support analogue television services and need information for the manner of preparation for switching over to digital. Again, it is this group that is the most difficult to get to through traditional information campaigns. Many households will need assistance with switching over to digital transmission. For some, financial assistance will be necessary to provide for purchase of equipment to receive digital services. For others, physical assistance will be required to help in mantling new digital equipment. The need to decide who will benefit from the assistance has already been addressed by several national governments. Anyway, since many nations that are not suitable for this assistance scheme will also need assistance, Digital UK has closely worked with local charity services, voluntary and consumer groups to help those in need. Funding of an initiative called Digital Outreach has mandated assistance programs for switchover to digital transmission towards charity organizations. In France, the Government had allocated funds for digital switchover projects. This ensures that all households/families exempt from television subscription fee, based on the age or income level, will be provided financial support. Furthermore, support is also available for those houses that may have access to television only by using terrestrial platforms. Assistance copyright 2008KPM 17
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU can be provided also to homes in remote border areas, if there is a need for accelerating the process of terminating analogue services. In its consultations for terminating analogue services, the Transmission Regulator (Conseil supérieur de l'audiovisuel - CSA), has recognized the fact that local governments and associations will have a key role to assistance provision. Still, provision of assistance to collective entities, such as hospitals, schools and elderly homes remains to be defined. In some countries, financial support was provided through social services (e.g. Sweden and Germany). In Berlin, around 6000 receivers were distributed to lower income families, which were supported with terrestrial platform television access, but that did not have the ability to purchase a DTT receiver. Still, since the digital receiver costs have continued to decline, they have rendered themselves accessible to a larger rate of households. In the United Kingdom, the central issue of cost-benefit analysis, performed by DCMS and DTI services, suggests that completion of switchover to MB will result into countable benefits in the region, by around 1.1 up to 2.2 billion, in terms of current net value. This shows that termination of analogue terrestrial transmission bears an economic interest for the United Kingdom. The main benefits from the switchover cover: Households/families that will have the option of obtaining digital television signal through aerial antenna, when coverage of digital terrestrial television coverage has increased to be substantially the same as the current analogue coverage. Consumers and producers that will assess any new service which has developed by using the freed range. Transmitters that will not pay the cost of transmission services in analogue and digital tools. Furthermore, the transition will enable elimination of barriers in introduction and increase of competition in the transmission market. The main costs of this transition involve: Consumers which have not converted yet their televisions or their video recorders into digital ones, since those that will have to do so, in the manner of continuing to receive or record transmission following termination of analogue transmission. Consumers that may pay for increased energy consumption, due to use of additional electronic equipment to convert their video recorders and television sets (although energy efficiency improvement are expected to result into a zero increase of energy consumption). Transmitters that would have to convert their current analogue terrestrial systems into digital systems. 18 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU In the United Kingdom, the Digital Switchover Assistance Scheme, with a budget of 600 M has been established to support around 7 million households. Such support includes equipment for conversion of a television set, helps in installation and provides for aerial replacement, if deemed necessary. Households with at least one member above 75 years, or older, or a disabled person, are also eligible for the program. In 2006, the Italian Government approved a decision, by which it allocated 110 M from the Government Budget to support families in purchasing their STB s, while reducing the individual subsidy level from the former level, from 70 to 50 Euros. Within the framework of European legislation, the Republic of Slovenia will encourage participation of internal industry and technology in digital switchover, since there is a number of companies in Slovenia that may provide transmission technology and DTT reception equipment. Pursuant to the National Development Program 2007-2013, the Republic of Slovenia may be allocating a certain budget to encourage involved stakeholders in switching over to digital transmission, in compliance with the European Law. This funding would be used to co-finance digital signal receivers (STB), in the manner of providing for a suitable reception of programs through analogue televisive sets; a part of such a fund is expected to be allocated for user information and encouraging to switch as soon as possible and for covering and network development in less populated and more isolated regions, in which commercial investors would not see a commercial benefit. The objective of promoting switchover is to improve program reception, additional and improved services, and promotion of information dissemination for the public. copyright 2008KPM 19
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU THE DIGITAL SWITCHOVER PROCESS EXPERIENCE IN OTHER Necessary resources for a switchover: human and material public and private The Parliament and the Government nt: Are responsible for a timely adoption of a proper legislative framework, if needed even for a financial subsidy scheme. It is specifically important to set a date for terminating analogue transmission. ASO 12 may contribute to increasing public revenues if the frequency range is freed and through management of digital dividends, a decision is reached for their sale. Still, one must take into account the fact that analogue switchover mat have a great negative impact in case of failure. If not managed properly, without a timely identification of impenetratable barriers in fulfilling deadlines, this process would result in preventing citizens from receiving radio and television signals based on open access, and such a thing has happened so far. It would be very negative for the process stakeholders and would make their position difficult, since it may cause opposition within some society segments towards the entire process. The Ministry of Culture, Youth and Sports; the Ministry of Economy and Finances; the Ministry for Labour and Social Welfare; the Ministry for Education, Science and Technology: Following approval of relevant regulatory framework, these ministries would be responsible for a full support to the process by common measures and policies. This is reflected into timely planning, financing and promotion of incentives for: Production of various audio-video content, especially those targeted to special groups that may be counted for new contents, for the moment unavailable, that will become available through digitalization; Activities intended to gain knowledge on media; Elimination or removal of business barriers for companies within the production, transmission and dissemination of radio and television programs, and all other audiovisual services. Regulatory authorities for transmission and telecommunications: Within their competencies and exercising mutual cooperation, they must define and perform frequency allocation in a transparent, efficient and timely manner. Their essential contribution will be to promote the process and to ensure a wide forum of opinion exchange, problem recognition and potential solutions. Starting from human and technical resources for a completion of the process, regulatory authorities will also have an important role in quality and temporal assessment of the process. Recognizing the available timeline (by the end of 2012) within which all important stages 12 Analogue Switch Over 20 copyright 2008KPM
DEVELOPMENT POLICY AND STRATEGY STUDY ON DIGITAL BROADCASTING IN REGIONAL AND EU would be implemented before analogue switchover, competent state authorities and regulatory authorities must ensure maximum coordination of activities, to be able to fulfil deadlines. Education institutions (Academy, elementary and secondary schools): Through regular, specialized and other trainings, and with curricula, these institutions can contribute to an accelerated process and take it to a successful conclusion. On the one hand, they need to offer programs adapted to new requirements for the labour market, specialized for introducing staff to production, promotion, sale and transmission of radio and TV signals, e.g. all audio-visual services and additional systems. (Commercial and public) transmitters: are among the most important stakeholders which in essence determine a successful process in the temporal aspect with its involvement. They should be the first ones to initiate the process, by being high quality service providers, while on the other hand important users of a new digital dissemination and transmission systems. If these two sides of their operation do not coincide, transmitters will face greater challenges due to substantial investment to which they are exposed, if they are not able to provide their timely return. Improvement of current service and content offers will have a prevalent impact on the confidence and support for the process. If better offers are not provided, the process may face opposition from those not seeing the benefit in switching to new technology, which may cause exceptional expenditure. This would also raise the issue of survival of those transmitters failing to recognize all advantages of digitalization and are not involved in the process in time. It is important to underline that the position and role of existing terrestrial transmitters, and especially the Public Transmitter, may have a strong impact in reception of DTT platforms. One must take into account: Financial resources of the transmitters and DTT investments; Digital activities, development and channels and other services for a digital platform; Legally bound obligations for terrestrial transmitters in DTT development. The indicators above will be supportive to assessment of states in which terrestrial transmitters have played a leading role, thanks to the regulatory framework and political actions in one hand, and the initiative and possibilities of transmitters themselves in the other hand. Consumer and transmission associations: They should provide an important contribution to education, awareness raising and digitalization promotion. They are expected to protect interests of target groups, which should be represented professionally and responsibly, but also contribute with their constructive approaches in the entire process implementation. They may have an essential contribution to assessing and awareness raising in time, for potential problems and their resolution. copyright 2008KPM 21