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Final report of the Digital Radio Advisory Committee

3. Implementation issues

LEGISLATIVE FRAMEWORK

While introducing DRB may be feasible within the current legislative and regulatory structure, DRAC considers basic tenets of the Broadcasting Services Act 1992 may ultimately need to be rethought.

Introducing digital technology would dramatically change the radio industry. The nature of these changes, and the possible new players who may enter the industry, cannot be predicted at this stage with any confidence.

DRAC believes there would be limited value in developing detailed regulations for managing an industry which is, as yet, imperfectly understood. The Committee generally supports the retention of the current sectoral diversity in introducing digital radio.

The Committee considers the existing broadcasting services objectives and industry categories as described in the Broadcasting Services Act 1992 are generally adequate for the initial phase of DRB in Australia, but would require review in the longer term. Some interim amendments may be necessary, for example, to sections 14 and 15 which define broadcasting services as services which provide programs able to be received on commonly available equipment.

Pending a greater appreciation of the shape of the new industry, DRAC supports the maintenance of the existing sectoral diversity, and recognises the continuing important role of free-to-air broadcasters in Australia. While some minor definitional adjustments may be necessary, current objectives and categories should be largely retained and be reviewed after introducing the new technology via a development phase, when there is more certainty about the role and influence of DRB.

However, the Committee notes that the National Federation of Blind Citizens of Australia (NFBCA) and the Australian Council for Radio for the Print Handicapped (ACRPH) argued that their charter and obligations were often not distinguished from general community broadcasting. They see introducing DRB as an opportunity to provide formal recognition of sub-groups within the community broadcasting category.

Recommendation 17: The existing broadcasting service objectives and industry categories in the Broadcasting Services Act 1992 should be retained for DRB, at least in the short term.

PLANNING AND LICENSING RESPONSIBILITIES

The Australian Communications Authority (ACA)¹¹ is responsible for preparing a spectrum plan for Australia. Within the spectrum plan, the ABA is responsible for the detailed planning of services in spectrum which has been designated by the Minister under section 31 of the Radiocommunications Act 1992 as being primarily for broadcasting purposes.

DRAC considers that there should be a coordinated approach to DRB spectrum planning and allocation. There are two broad options for planning of spectrum for digital radio broadcasting including:

These options are not necessarily mutually exclusive. For both options, the national and community broadcasters consider it would be contrary to the public interest for them to be required to compete for transmission capacity against commercial interests, and propose that the existing ministerial reservation of capacity for national and community broadcasters be retained.¹²

Option 1-Australian Broadcasting Authority planning

Under this option, the DRB spectrum allocation would be designated as BSBs.

The ABC, SBS, FARB, CBAA and the CLC support ABA planning of spectrum for DRB on the basis that the existing criteria, the Authority is required to consider under the Broadcasting Services Act 1992 in planning analog broadcasting, would continue to be relevant following the introduction of DRB. These include broad socio-economic criteria which are assessed in developing licence area plans for service provision in particular areas.

The ABA argued that no development of new services, such as DRB, is likely to occur unless the planning and licensing environment is 'stable and predictable'. The Authority recognised removing certain considerations¹³ from the planning provisions of the Broadcasting Services Act 1992 would permit a streamlining of current licence allocation processes. The ABA felt that, subject to this streamlining, the Broadcasting Services Act 1992 could be used to balance competing demands and meet the social needs of the community as well as the economic imperatives.

However, Telstra opposed any approach which gives the ABA prime responsibility for planning spectrum in the L band. Telstra considered that the planning and management of shared use of the 1.5 GHz band between DRB and fixed services should be handled by the ACA because of the potential of DRB technology to provide extensive non-broadcasting services.

Option 2-Australian Communications Authority planning

The ACA has the legislative power to plan services in frequency bands that are not designated by the Minister as BSBs. The Authority has a number of options for licensing services under the regimes for apparatus, class and spectrum licences.

The ACA canvassed a model of market-based allocation of radiocommunications licences (which would not preclude licence allocation to broadcasting services) on the basis of an allotment plan developed by the ABA. Alternatively, spectrum licences could be allotted with 'packaging' based on an allotment plan, or by selling a large number of geographic areas and spectrum blocks by simultaneous ascending auction so that optimum aggregation of spectrum would be determined by market forces.

Under this scenario, the ACA could reserve licences for national and community services and auction the remaining licences. The ABA could be responsible for content regulation.

As noted above, Telstra supported ACA involvement in spectrum planning and allocation, while holding that DRB spectrum should be let by apparatus licences, not spectrum licences. Telstra also supported the notion that DRB requires a coordinated and planned approach to spectrum allocation.

The majority of DRAC members opposed the use of spectrum licensing to allocate spectrum for DRB, preferring the retention of apparatus licensing.

Recommendation 18: There should be a coordinated approach to DRB spectrum planning and allocation, consistent with existing arrangements, whereby the ACA undertakes frequency band planning and the ABA plans services on the basis of socio-economic criteria in the Broadcasting Services Act 1992 and then allocates licences. DCA should give consideration to a model for spectrum allocation, with spectrum reserved for national and community broadcasters, as under present arrangements.

LICENSING STRUCTURE: CONTENT AND CARRIAGE

Eureka 147 technology permits the separation of content (ie the program content) and carriage (ie the multiplexing and transmission of signals) in the licensing process. One of two basic licensing regimes could be introduced to reflect this separation:

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• combined licensing of content and carriage; or

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• separate licensing of content and carriage.

The Committee has not assumed that the operator of the carriage facility must be the owner of the carriage facility. It further notes that the roles of multiplexing and transmission need not be undertaken by the same entity. Therefore, the arrangements should preferably offer flexibility for broadcasters to have responsibility for content and carriage as end-to-end service providers, or to be essentially a content provider only, but with an associated carriage right.

The ABC, SBS, FARB and CBAA preferred a combined licensing approach (ie one where no separate multiplex licence is required), noting that operation of transmission facilities could be covered by a transmitter licence under the Radiocommunications Act 1992 in a manner similar to the provision of analog transmission facilities.

Most submissions to DRAC proposed existing broadcasters be given priority access to provide digital services, with an automatic multiplex allocation allowing the provision of a single CD quality service, which could then be subdivided at the broadcaster's discretion.

Other submissions, generally by narrowcasters, proposed separate licensing of content providers and carriage facilities as the best way of ensuring fair and equitable access. The CBAA and FANSS noted that not all content providers might wish to, or be in a position to, become involved in carriage, and their access rights would need to be guaranteed. Establishing a separate legal entity to control the carriage facilities would be one way of ensuring access, but industry cooperative arrangements and an independently built and managed network are other options.

Telstra also supported the concept of an independently owned and managed network, suggesting that content providers would need to have access to a common level of functionality provided by the core network which could only be equitably and efficiently provided by a common network operator on a national basis. This arrangement would also allow provision of a common conditional access and subscriber management system to allow for individual addressability and billing for any subscription services.

Telstra did not believe that such an arrangement would be anticompetitive, since Eureka 147 would be a replacement for existing broadcast platforms. Rather, Telstra sees content generators in the future choosing the best mix of platforms to reach their target audiences, eg cable and satellite for fixed audiences, and Eureka 147, digital telephony and personal communications systems for mobile and portable services.

In summary, DRAC was unable to reach consensus on a preferred licensing regime; with the majority of broadcasters favouring broadcaster control of content and carriage, whilst others argued for a separation of roles.

The issues surrounding licensing are expected to become clearer following the planning of multiplex allocations in the development phase (see Recommendation 12), when broadcasters and narrowcasters will know which broadcasters will share which multiplexes.

Recommendation 19: In the development phase (see Recommendation 12), current service providers should be automatically allocated capacity on multiplexes. During this period, an appropriate licensing regime for DRB should be developed.

Definition of broadcasting under the Broadcasting Services Act 1992

A key feature of digital technology is the ability to dynamically vary the number and quality of signals from a single content provider. This feature of the technology may challenge the current definition of 'broadcasting service' in the Broadcasting Services Act 1992. In the new environment, a single digital broadcasting service should be seen as comprising the whole of the content or programming encompassed in that digital bit rate, whether provided as one high quality signal or several lesser quality signals, while the content provider should be able to vary the number of signals provided at different times.

The Committee agreed that each broadcaster should be given a specific bit allocation¹⁴ during the development phase. The CBAA prefers an approach in which all broadcasters receive the same bit allocation.

DRAC considered that broadcasters should be able to split that allocation into several different channels to experiment with the technology. However, they noted the longer term regulatory regime for DRB might not necessarily permit channel splitting.

Recommendation 20: The definition of the term 'broadcasting service' in the Broadcasting Services Act 1992 should be amended as necessary to accommodate the ability of digital technology to permit datacasting and channel splitting, and to encompass the control by the broadcaster of the whole of their digital bit rate.

OWNERSHIP AND CONTROL

Ownership and control arrangements for DRB should balance the legitimate concerns of existing broadcasters and aspirant broadcasters with the interests of the consumers of the new services. Care should be taken to prevent monopolisation, provide for access to new service providers, and stabilise access and user costs.

As a first step, to ensure existing commercial broadcasters are able to move to digital broadcasting and undertake simulcasting, it may be necessary to provide transitional ownership and control arrangements for regulating analog and digital services. (Under existing regulations, a person must not be in a position to exercise control of more than two commercial radio broadcasting licences in the same licence area.)

For operational DRB services, if commercial broadcasters along with other broadcasters were able to migrate to digital services, as recommended in this report, content control would remain with the broadcaster. The transmitting equipment would be licensed under the Radiocommunications Act 1992 .

There are three possible ownership and control models for the multiplex :

Under option 1, each multiplex would be owned by one or more broadcasters who would determine programming and sharing arrangements. Some conditions could be applied to provide for access by non-owner broadcasters and to control access prices. This model was generally favoured by the ABC, SBS and the CBAA.

Under option 2, a network operator would control access to all multiplexes in accordance with a regulatory regime. A common level of functionality, conditional access and a contestable market would be features of this option. This model was favoured by Telstra.

The option 3 model would rely on existing competition law to regulate a market-driven access and pricing regime.

The CLC and FARB favoured a mix of options 1 and 3, with access reserved for national and community broadcasters and essential non-broadcasting services, together with regulation of access to digital transmission facilities by other players through competition law, to ensure effective competition in the provision of facilities.

A number of Committee members were not opposed to any of the above models, provided that access to multiplex facilities were guaranteed for national and community services.

Any model adopted would need to provide for content regulation to at least the standard established for analog services. The regime would also need to distinguish between for-profit and not-for-profit, and essential and non-essential services, with respect to access and cost. Limitations on ownership to companies publicly listed in Australia could also be considered.

The CLC also considered that, during the development phase, if necessary, a separate set of regulations should be established to cover DRB to ensure consistent regulation of the content of similar broadcasting services which use different transmission methods.

Recommendation 21: During the development phase (see Recommendation 12), transitional legislative provisions should, if necessary, be enacted to provide that, if control of analog service licences does not breach the multiple interest aspects of the ownership and control rules, control of digital and analog services will not breach these rules.

OTHER REGULATION

The Committee also identified the need to retain the concept of industry-developed and regulator-supervised codes of practice after the introduction of DRB, while recognising these may need to be adjusted in due course to take account of new roles and responsibilities of the various players in a digital broadcasting environment.

11.From 1 July 1997, the Spectrum Management Agency became the Australian Communications Authority.

12.Section 31 of the Broadcasting Services Act 1992.

13.Under section 23 of the Broadcasting Services Act 1992 the ABA, in planning broadcasting services, is required to have regard, among other things, to 'economic characteristics'.

14.The Report of the Australian Broadcasting Authority Digital Radio Broadcasting Task Force, Developing Digital Radio Broadcasting for Australia (October 1996), based its assessment of channel capacities on a nominal data rate of 256 kbps.

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• Document ID: 9405 |
• Last modified: 6 February 2008, 2:26pm