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NZ Telecommunications - Broadcasting

Broadcasting is the transmission of audio or audiovisual information by radio waves or cable for reception by the public using suitable receiving equipment - television, set top boxes or radio. The key difference between broadcasting and telecommuncations services is that broadcasting is a one way process, and telecoms a two way.

Broadcasting Networks

There are three basic types of transmission networks for broadcasting services in New Zealand, each requiring viewers to have suitable receiving equipment:

Terrestrial transmission - requiring a suitable antenna or dish
Satellite transmission - requiring a satellite dish
Cable services - requiring a physical cable link to the receiving equipment

Terrestrial and satellite transmission both utilise radio spectrum. Most broadcasting networks will use combinations of these three approaches.

Broadcasting Market

The New Zealand television broadcasting market comprises:

Broadcasters

TVNZ - Broadcasters own the spectrum.
CanWest (TV3, TV4, Prime, Sky UHF* and regional providers Terrestrial (requires spectrum and transmission towers). BCL owns the transmission towers and provides transmission services (however increasing number of other high site providers such as Sky Tower) Ranging from small geographic areas to 99% of New Zealand
Sky* Satellite (requires spectrum and satellite transponders) Broadcasters own the spectrum.

International entities own the satellites (broadcasters only lease satellite space) 100%

Saturn* Cable Saturn Wellington, with coverage planned to expand beyond 60% in 5 years

*Subscription television services

Digital Technology and Convergence

Digital technology, where capacity provides, allows:

Any form of information content - video, graphics, sound, text or voice to be made available via
Any transmission platform - cable, satellite, wireless networks - to a range of
Traditional and new consumer reception devices - mobile phone, television, PC

Digital technology generally improves quality and enables more information to be carried than is possible using analogue technology. As analogue terrestrial television technology is supplemented by digital transmission, there will be a four-fold increase in available capacity.

Broadcasting, and information technology are "converging" with industry players striving to participate in new markets for content-based services. Eventually all information will be carried in digital format.

Broadcasting-Telecommuncations-Content convergence will substantially expand the range and quality of services available through the television set.

TVNZ is proposing Internet and email access, as well as providing interactive television.

New set-top boxes containing large capacity disk drives, will act as a digital recorder device enabling viewers to skip all advertisements, and eventually being able to download programmes of their choice, via online rental stores.

Future Developments

The most signficant effects of digital technology and convergence are likely to be:

Bandwidth and Service Offerings - rather than content being the dividing factor, transmission networks are more likely to be distinguished by their bandwidth and their capability to provide one-way or two-way transmission. Bundling of services will blur the distinctions between televisions and computers. A single screen will provide access to television, online video, internet and email, as well as other digitally delivered services.
Audience Size and Configuration - Increased channel numbers and multiple service offerings wil impact audience size and configuration. Market fragmentation will occur. Pay, or pay per view programming, will become more common on commercial television. More programming will be targeted at minority and other community interest groups. Free to air television will continue with smaller overall market share.
Network and Industry Structures - previously discrete networks carrying non-competing services will now offer competing services and platforms, especially to remote areas. Urban areas will continue to be provided with a greater choice and quality of services. Niche markets will amalgamating, including Internet service providers and content providers. New Zealand's small broadcasting and telecommunications market is building international alliances to secure the expertise, capital and content held offshore. For example, the Telstra/Saturn cable venture and Telecom/INL/SKY "links".

Implications for New Zealand

These trends will affect government objectives relating to networks, with more support for efficient use of resources and encouragment for innovation. Concerns addressed will most likely focus on:

Digital Transmission - The transition to digital broadcasting services will remain a key issues, in particular, the allocation of spectrum suitable for digital television. The Radiocommunications Act aims to ensure that spectrum is allocated to uses which society values most. The Act does not, however, specify how spectrum is to be allocated. The Government retains flexibility to select the allocation method best suited to the spectrum concerned.

Spectrum - Auctioning spectrum rights is the preferred approach for spectrum for commercial use. A framework for non-commercial allocation of spectrum is also being considered.

Spectrum suitable for digital television will follow allocation of the 2GHz auction. Decisions by previous government to guarantee an allocation of spectrum to existing broadcasters for simulcast transmission [both digital and analogue] continues undebated at present.

Continuity of service - is likely to be uppermost in requirements of broadcasters, following models set in Australian - requires analogue broadcasting to be maintained until 2008, the UK not having made a decision as yet.

Competition - any specific competition safeguards required to supplement the Commerce Act.

Access - ensuring equitable consumer access to services is likely to reduce with time and the Internet makes vast amounts of entertainment and information available to consumers via telephone lines. Access in remote areas will continue to be a focus.

Cost - consumer reception equipment (such as digital television sets or set-top boxes) costs will decline with technology developments and competitive pressure.

Content Regulation - applying current broadcasting standards to other transmission channels - Internet, mobile etc. Current censorship boundaries will dissolve as IP removes geographic boundaries to content access.

Converged Broadcasting Models

Triple Play Models and Quadruple Play Models refer to those Next Generation Networks [NGN] that are capable of carrying 3 or 4 multiple services from:

VoIP
Video calling
Converged fixed/mobile offerings
Interactive television
Video-on-Demand (VoD)
IPTV

Currently triple play activity is very limited due to the dominance of Telecom. And these are rather rudimentary - voice video and data are delivered over the same network.

TelstraClear offers triple play services over cable networks primarily in the central business districts of Wellington and Christchurch.

However, three factors may change this landscape:

ADSL2+ high-speed broadband rollout spurred on by the government's decision in 2006 to unbundle the local loop
Rollout of Telecom's NGN - supporting VoIP, video calling, converged fixed/mobile offerings, Interactive television and Video-on-Demand (VoD).
Urban and rural fibre network rollouts - will also support high-speed networks capable of triple play service delivery.

Current resellers of Telecoms ADSL network include:

ihug
TelstraClear
CallPlus
ICONZ
Maxnet

ADSL2 is the prevailing high-speed broadband technology deployed in New Zealand, following Telecoms 2007 rollout that will continue through to the end of 2008.

In August 2006 Orcon was preparing to deploy a high-speed broadband ADSL2+ network that will feature IPTV services.

The significance of these networks is that it moves telecommunications and broadcasting closer together.

Broadcasting - FTA, Pay TV & Digital TV

Free-to-Air (FTA) television has dominated the market in NZ for many decades. Marketing and media buyers are increasingly turning to alternative media, such as online and mobile channels to reach consumers.

Pay TV is continuing to make steady progress into market share from the FTA broadcasters.

Digital television broadcasting was deployed in 2007 and digital audio broadcasting services, are being established.

The service, initially using an Optus satellite is being rolled out via terrestrial capability through Kordia's network.

Broadcasting - Regulation

New Zealand has a well developed radio and television broadcasting industry with penetration levels competitive compared to other western economies.

Deregulation has driven an increase in the number of television stations to over 40, and radio stations to over 400. To date the Government remains open-mind about merging broadcasting and telecommunications regulations.

Regulations are likely to be more specifically targeted, such as "anti-siphoning" rules on Sky TV that might stop the pay TV firm acquiring exclusive rights to major sporting events.

A single regulator for the broadcasting and telecommunications sectors is being considered, as is new "Telecommunications and Media Act".

To help promote high speed broadband, a levy may be imposed on media companies to pay for broadband infrastructure and for technology to allow the broadcast of free-to-air TV to mobile phones. The Government is also considering whether Sky should be forced to carry and pay for third party programming.

Broadcasting regulations are a hot political topic, and with elections looming in 2008, it is likely that the current Government will stall any action until post election. Electors who have signed up to Sky specifically for rugby suddenly find they might not be getting it anymore and they might have to get Freeview. This is not likely to be well received. With NZ typically a nation of innovators, such as step is likely to be seen as retrospective.

Should Labour win another term, one can expect heavy regulation on the broadcasting industry to be imposed, in order to tip the scales in favour of free-to-air consortium Freeview, which to date has attracted heavy government investment but lacks "compelling content".

National is more reticent about their ideology.

Broadcasting and communications are becoming increasingly entwined and communications technology is going to have quite an effect on broadcasting.

Director of digital broadcasting strategy, Jo Tyndall, says there are "no ministerial or government leanings" for or against any of the options put forward.

Different models will likley be proposed, including levys such as that imposed in France, where advertising on France's public television stations, will be scraped, and transmission financed instead through a levy on the advertising revenues of private stations and a "small tax" on Internet and mobile phone operators' turnover.

There is little clarity as to how media companies would be defined, were a levy to be imposed.

Next: Australian Telecommunications Market

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