Entry No.22f

IT Writers Awards

The commercial battle is heating up for television turf in the digital era,
Selina Mitchell reports.

A DECISION on the framework for the supply of digital television in Australia is expected before the end of the year, but it is proving to be one of the toughest balancing acts the Federal Government has ever attempted. Its decision will be based on what is best for consumers, insiders say, but that is not as simple as it sounds. The government must try to retain what is regarded as one of the best free-to-air broadcasting services in the world, while allowing opportunities for new players to provide innovative and advanced services that may be crucial to Australia's advancement into the information age. And it depends who you talk to as to how that is best achieved.

There are two camps trying to stake out digital television spectrum, and the freedom to use that turf as they wish. On the right we have the datacasters, such as Fairfax, OzEmail and News Limited, new players that plan to provide interactive services via the television screen. And on the left are the broadcasters: free-to-air television network operators who will be spending more than $1 billion to set up digital services, and want some protection for their efforts. The ABC and SBS are somewhere in the middle. They are probably able to multichannel -- unlike the free to airs, which will be restricted in an effort to protect the struggling pay television services. The ABC has signalled a desire to datacast. ``This is very valuable spectrum,'' independent new media and broadcasting adviser Malcolm Long says. ``It carries television into all homes, and with digital technology you can use that spectrum with an aerial and a set-top box -- even with the same old television -- to supply new services as well.'' Existing broadcasters want as much freedom as possible to explore the new technology and find out what consumers want, Long says. But new players want a piece of the action too. The final rules set by government are crucial to the mix, and the closer we move towards a decision the more acrimonious the arguments get. Digital television services must be available from January 1, 2001, in metropolitan areas, but there are still many question marks over how they will be supplied, and whether it will lead to opportunities for datacasting services. 

OzEmail Internet general manager Justin Milne says: ``All the datacasters have put their business plans on ice -- we don't know if it will be a viable business or not, and we won't know until the government announces some detail.'' Their plans may be on hold, but the talks continue apace. New players, traditional broadcasters and equipment manufacturers have been lobbying the Federal Government for months on what restrictions should be placed on digital services, and Cabinet is expected to begin examining the issue soon. New players are seeking a broad definition of datacasting to allow things such as education, gambling and e-mail access services via set-top boxes. But free-to-air television broadcasters have called for a strict datacasting definition, saying viewers want cinema-quality television not Internet-like services.

IT and Communications Minister Senator Richard Alston says finalising the detail was the toughest decision he has ever had to make. The Government was aware the industry needed certainty on the digital model, but it also wanted to properly examine the ``complex, polarised'' debate, a spokesman for Alston says. It has already legislated on a number of digital television issues, including the start dates (2001 in metropolitan areas and 2004 in regional areas). Commercial stations have been given 7MHz of free spectrum so they can simulcast their existing services in both analog and high-definition digital for at least eight years. Any spare spectrum will be allocated to new players to provide datacasting services. But many issues remain unresolved, including a definition of datacasting. 

While aspirant datacasters, and the Productivity Commission, would like a broad definition (OzEmail goes so far as to suggest the words ``datacasting is not broadcasting''), the commercial television industry group, FACTS, wants tight restrictions to avoid competition for its broadcasting services, Milne says. ``But we don't want to be a backdoor broadcaster, we want to provide interactive content,'' he says. Two other issues are crucial to the success of digital television datacasting, he says: ``We don't want them to mandate high-definition television. It should be an option, and we want to ensure that there is sufficient spectrum for new players.'' HDTV would be too expensive and would ensure the failure of digital television in Australia, Milne says. But FACTS says research suggests HDTV would be the medium most likely to appeal to a mass audience. OzEmail has called on the government to ensure free-to-air broadcasters use only single frequency networks to run digital services so there is enough spectrum left over to allocate to datacasters. 

However, FACTS says there are technical issues that might not make that possible. Long suggests what would be best for consumers is a system that preserves the best of existing broadcasting and opens up opportunities for new services. ``High definition is not one standard,'' he says. ``You can do high-definition broadcasting using only half of the pipe available to broadcasters, and you don't have to do high definition all of the time.'' The Government must identify a high-definition standard, so all players use the same processes, and they could require them to broadcast a certain number of hours in that standard, he suggests.

A discussion paper from the Communications Department identifies three regulatory options: case by case assessment, the identification of specific services, or definition based on technical parameters or look and feel. In the past week, a number of rumours have circulated about more detailed options. Whatever the result, Long predicts that once the rules become clear, the two camps in the debate will have to start to co-operate. ``You will be surprised at the deals that will be done'', he says. ``If datacasters are not in the same box as the networks, which have the people power now, they won't get far, and the networks must realise that other enhanced services provided by datacasters will give more people more incentive to buy a box. ``The bigger the universe of people using the services, the more cake everyone will have.'' Long says datacasting represents a new opportunity for economic and social development, and could ease the digital divide now being accentuated by the Internet. Datacasting has the potential to become a major vehicle to deliver some of the power of the digital marketplace to people unlikely to otherwise experience, understand or participate in it, he says. 

Datacasting is also crucial for government to improve its service delivery to the community, NSW IT minister Kim Yeadon says, calling for State governments to be given access to datacasting technology and free spectrum. More than 97 per cent of households have access to a television, and datacasting therefore has the potential to make the delivery of government services extremely accessible and efficient, he says. We await the final balancing act, but it may be some time in being delivered. 

While a decision on the framework is likely before the end of the year, it is not feasible for legislation to be developed and tabled in this last parliamentary session before Christmas, Alston's spokesman says. After that, Parliament will not sit until February.

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