Australian Broadcasting Corporation Submission Review of High Definition Television Quota Arrangements
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1 Australian Broadcasting Corporation Submission Review of High Definition Television Quota Arrangements (Department of Communications, Information and the Arts) June 2005
2 Australian Broadcasting Corporation submission to the DCITA Review of High Definition Television Quota Arrangements Introduction The ABC welcomes this opportunity to comment on the high definition television (HDTV) quota arrangements set out in the Broadcasting Services 1992 ( BSA ) and supporting regulations. Since 1 July 2003, the ABC has transmitted an HDTV version of a proportion of its programming on digital logical channel 20. In each reporting period since that date, it has met or exceeded the requirement set out in clause 4 of Schedule 2 of the Broadcasting Services (Digital Television Standards) Regulations 2000 that it transmit 1,040 hours of HDTV content each year. Evidence to date indicates that HDTV will not be a major driver in the uptake of digital television in Australia in the near or medium term. Currently, more than 70% of Australian digital terrestrial households are unable to receive HDTV signals. However, the Corporation acknowledges that in the longer term consumer interest in the format is likely to grow, as is the saleability of rights to high definition (HD) content on international markets. Accordingly, the ABC is in the process of developing the capacity for HDTV production. The ABC believes that the development of digital television in Australia would be better served by allowing broadcasters to make their own judgements about the uses of their spectrum allocation that will be most attractive to Australian audiences. However, if the existing quota-based approach is to be retained, the Government should revisit the standards for digital receivers to require that all boxes be able to decode both standard definition (SD) and HD signals to free up bandwidth by eliminating the need for wasteful HD-SD simulcasting in the longer term. HDTV format As the ABC believes that offering audiences a greater diversity of services is the key to encouraging digital television take-up in the short-to-medium term, it has launched a standard definition television (SDTV) multichannel service, ABC2. To accommodate ABC2 within available spectrum, the Corporation has adopted 576p as its play-out HDTV standard. Nonetheless, the ABC recognises that 1920x1080 is the worldwide HD production and international program exchange standard, and expects that future international content sales are most likely to be in that format. Accordingly, the Corporation has adopted 1080i for its internal processes and is in the process of developing production facilities capable of generating HDTV content at that resolution. 1
3 ABC Submission: Review of High Definition Television Quota Arrangements 2 The discussion paper canvasses the question of modifying the existing HDTV standards, including ceasing to regard transmissions in 576p format as HDTV. Any significant modification of the standards would necessitate a revision of the entire digital television regime, as broadcasters approaches to the various options presented by digital television are predicated on the formats set out in the existing standard. The ABC has based its digital television broadcasting strategy on the use of 576p to meet its statutory HDTV obligations. In particular, the Corporation is only able to offer its multichannel service, ABC2, by providing HD simulcasts of its analog television service in 576p; given current compression techniques adopted in Australia, 576p is the only HDTV format that is sufficiently compact that it can be carried in a 7MHz broadcast channel alongside two SD signals. If 576p was to cease to be an acceptable HDTV format, the ABC would be unlikely to have the necessary spectrum capacity to continue to offer ABC2 to Australian audiences in parallel with HDTV. This would be detrimental to the take up of digital television in Australia, as audience reaction to ABC2 has been extremely positive. The HDTV mandate The ABC has long maintained that the key driver of digital television take-up in Australia will be increased viewer choice through additional and enhanced services. Nonetheless, the Corporation acknowledges that the adoption of HDTV in Australia is likely to eventually become more widespread as the various elements of the HDTV value chain decline in price. Currently, integrated digital television sets capable of receiving HDTV signals and television sets of sufficient resolution to display HDTV content are expensive, luxury consumer items. Similarly, while the prices of digital television set-top boxes have fallen, HD boxes have remained relatively expensive. Until HD equipment declines in price, the penetration of HDTV into Australian households is likely to be limited. The ABC notes that anecdotal evidence from retailers suggests that a significant number of the digital set-top box purchases to date have been the last link in a causal chain where consumers purchase wide-screen television sets to make better use of the wide-screen capabilities of DVD players, and then purchase digital television receivers to extend those capabilities to free-to-air television viewing. This suggests that interest in HDTV equipment may increase once the format for HD DVDs has settled and consumer hardware becomes available. Similarly, it is likely the cost of acquiring HD content is expected to decrease in line with increases in the supply of HDTV content from the Australian independent production sector and from overseas sources. The cost and supply of HD content is likely to be affected by the costs of equipment capable of supporting HD production.
4 ABC Submission: Review of High Definition Television Quota Arrangements 3 What is unclear, however, is when such decreases are likely to occur. The ABC is not in a position to estimate likely timeframes for the various changes. HDTV rules for regional broadcasters The ABC currently provides a national television service with some State-specific programming. All areas of Australia that fall within the Corporation s digital television broadcast footprint, including most regional areas, receive the same suite of services, which include standard and high definition versions of the ABC s primary channel for their State, its multichannel television service ABC2 and the two dig digital radio services. Currently, the Corporation s digital television signals are broadcast to 95.6% of the Australian population using 131 transmitters across the country; coverage is expected to reach 98% of the population by The ABC intends to continue to provide the full range of its digital services to all Australians, whether in regional or metropolitan areas. Relevance of current HDTV quota rules The Issues Paper seeks comments on whether the HDTV quota should remain at 1,040 hours per annum and whether more specific HDTV quotas, such as hours broadcast in prime time or in particular genres, should be introduced. As indicated above, available evidence suggests that choice and enhanced content are the keys to driving digital television uptake in Australia in the short-to-medium term. As HDTV transmission occupies a significant proportion of each broadcasters 7MHz spectrum allocation, it reduces the bandwidth available for new, enhanced and interactive services. Accordingly, the ABC believes that broadcasters should be allowed to choose whether to use their spectrum for HDTV or for additional services. Thus, if a broadcaster forms the view that HDTV is a driver of digital television uptake, it will use its spectrum for that. Alternatively, if the broadcaster is of the view that audiences will be better served by the provision of additional channels or enhancements, it will be able to use its spectrum in that way instead. Specific Quotas If the existing quota-based approach is to be retained, the ABC would be opposed to the introduction of more specific HDTV quotas. The introduction of prime time quotas will effectively oblige broadcasters to make decisions about the programs they make, acquire or convert into HD format on the basis of the programs likely placement in the schedule, rather than on the basis of whether the content will benefit from the higher-resolution format. Given the diversity of the ABC s schedule, programming best suited to HD presentation will not necessarily fall within peak audience evening viewing periods.
5 ABC Submission: Review of High Definition Television Quota Arrangements 4 Similarly, imposing genre-based HDTV quotas on broadcasters is likely to distort their production, acquisition and conversion strategies by requiring them to consider programs at least in part on the basis of their capacity to fulfil particular quota obligations, rather than their programming merits. The ABC also notes that, consistent with its Charter obligations in relation to both diversity and comprehensiveness, the spread of genres on ABC Television is significantly different from the spread on commercial television channels; any proposal to introduce genre-based quotas must allow for these differences. Up-conversion of content Under subclause 37L(2) of Schedule 4 of the BSA, the ABC is permitted to include upconverted analog and standard definition programs when meetings its HDTV quota obligations. The Issues Paper raises the question of whether the Corporation should be instead required to meet some or all of its HDTV quota obligations by providing material originally produced in a high definition format. Assuming that the HDTV quota is maintained, the ABC would have difficulty meeting any requirement to purchase or produce greater quantities of native HD material as it does not yet have in-house facilities for HDTV production and relatively little HD-originated content is available from the sources from which its purchases the bulk of its acquired content. The Corporation is in the process of establishing facilities capable of supporting HDTV production in accordance with the revised HDTV production facilities strategy approved by the ABC Board in April These facilities include: an HDTV studio in Sydney; an HDTV outside broadcast (OB) Van with onboard record capability; an HDTV production field kit; a Colour Grader for post-production in Sydney; and preview machines for archive facilities play-out in Sydney and Melbourne. They will not be completed until some time in It should also be noted that once these HD facilities are completed there will still be limits on the quantities of native HDTV content that the ABC will be able to generate. The studio, OB van and field kit will each be supplied with six cameras. This suggests that at best 35% of general television production at the ABC s Sydney and Melbourne facilities could be in HD format. Moreover, the new facilities may not be sufficient for high-end studio production requiring larger numbers of cameras. It should also be noted that the new HD facilities will be used for general television production and will not be able to be used for news and current affairs production, which utilises dedicated studios and equipment and must be integrated with SD syndicated news sources.
6 ABC Submission: Review of High Definition Television Quota Arrangements 5 The alternative to producing native HDTV material would be to purchase it from overseas suppliers or independent Australian producers. However, the supply of native HDTV from these sources currently remains too small to effectively meet the ABC s acquisition needs if it was required to broadcast significant quantities of native HDTV. The Corporation sources the majority of its overseas content from UK program suppliers, where all television broadcasting is currently in SDTV format. The BBC has begun producing some high-end content in HDTV format, and is reported to have set a target of producing all of its content in HDTV format by However, this is currently restricted to specific genres, such as natural history, music and new drama. The majority of UK programming that the ABC acquires is only available in SDTV format. As the ABC is not currently seeking native HD material from overseas program suppliers, the cost premium for purchasing HD programming, rather than SD versions of the same material, has yet to be tested. However, the ABC would have difficulty absorbing additional costs into its acquisitions budget. Similarly, the Australian independent production sector is currently producing relatively little material in HDTV format given the relative costs of HD equipment (for example, hiring a standard digi-betacam camera in Sydney costs roughly $2,000 per week, whereas an HD camera costs roughly $10,000) and minimal local demand. The material that the sector does produce carries a significant cost premium, which would have a considerable impact on the ABC s program commissioning budget for pre-purchases and co-productions. HDTV reporting arrangements The ABC believes that the current HDTV reporting regime, which involves six-monthly interim reports and annual reports to both the Department and the Australian Broadcasting Authority (ABA), is unnecessarily onerous. This problem is exacerbated by the fact that each of these reports is subject to different reporting requirements, thus effectively requiring the Corporation to provide two different and time-consuming reports at each biannual reporting period. The ABA requires reporting in terms of the number of HD hours per month and the number of prime time HD hours per month for each licence area equivalent (Sydney, Melbourne, Perth, Adelaide, Brisbane, Darwin, Tasmania and Southern NSW, including Canberra). By comparison, the Department requires monthly breakdowns of HD transmissions by genre and divided into Australian and non-australian content. There is no need for this level of compliance reporting. The ABC believes it would be appropriate to move from the current biannual reporting arrangements to biennial reporting, as suggested in the discussion paper (page 14).
7 ABC Submission: Review of High Definition Television Quota Arrangements 6 Long term scope for HDTV in remote licence areas As indicated above, the ABC transmits the same digital television services SD and HD versions of its primary service, ABC2 and dig digital radio to all viewers within its broadcast footprint. This includes many viewers in areas designated as remote coverage areas. The ABC notes that the Remote Area Broadcasting Services (RABS) satellite platform, which delivers its television services to remote-area viewers who are not within broadcast distance of the ABC transmission network, currently only carries the Corporation s analog television service. The current set-top boxes being used by remote viewers to RABS don t have the capability of receiving and decoding the HDTV signal. When the current RABS platform was introduced in 1999, the new set-top boxes required to view the service were subsidized by the Regional Telecommunications Infrastructure Fund (RTIF) for an amount of $750 per existing analog decoder for replacement. This resulted in an outlay for each remote area household of approximately $250 for each new decoder. Changing the receiver equipment is a difficult and costly process for each remote area household. There are additional technical constraints on the provision of the ABC s digital services, including the ABC s HDTV channel. The RABS services are delivered via composite bitstreams of all broadcasters services. Consequently, the broadcasters involved in providing the RABS service will need to agree on appropriate means for resolving these technical issues before digitisation can proceed. The ABC participates in joint discussions about the future RABS services involving industry, the ABA and the Department of Communications, Information Technology and the Arts. As the Corporation seeks to ensure that its services are available to all Australians, it is interested in the provision of all digital services to RABS viewers and continues to work with other industry participants to provide a common platform for RABS to deliver the ABC s digital services in the future. The Corporation is keen that this platform allow RABS viewers to enjoy the full range of ABC digital television services, including HDTV services. Other Issues Removing the simulcast requirement Under current legislation, broadcasters are required to simulcast both HD and SD versions of any programming transmitted in HD mode. The ABC proposes that the Government revisit the standards for digital receivers to require that all boxes be able to decode both SD and HD signals to eliminate the need for such simulcasting in the longer term. The requirement to simulcast HDTV and SDTV versions of programs for a certain number of hours each year significantly reduces the bandwidth available for broadcasters to use for multichannels, interactive content or higher-resolution HDTV content. It is the ABC s
8 ABC Submission: Review of High Definition Television Quota Arrangements 7 experience that difficulties associated with mode switching and dynamically allocating bandwidth mean that bandwidth for HDTV transmissions must be allocated on a permanent basis, regardless of whether an HDTV signal is being transmitted or not. If the need to transmit both HD and SD signals could be reduced to one, some of this wastage would be eliminated. For example, if the ABC was able to broadcast only an HD version of its primary channel during the periods when it is transmitting an HDTV signal, the bandwidth saved by eliminating the accompanying SDTV signal would allow it to provide an additional multichannel service, interactive enhancements or to increase the resolution of its HD output from 576p to either 720p or 1080i format. Currently, HD receivers are able to decode both SD and HD signals and convert their output for display on both SD, HD and PAL television screens. By comparison, SD receivers only have the ability to decode SD signals, which creates a practical need to perpetuate the existing inefficient HD SD simulcast requirement. Now that digital television receivers are established in the consumer marketplace, decoder chip prices have fallen. Revisiting the standards for digital receivers to require all receivers to have HD-capable decoders would provide the opportunity to plan for the long-term removal of the HD-SD simulcast requirement. The ABC acknowledges that such a transition would not be without difficulties and would thus require a phased and mandated introduction that allows time for all receivers in the market to be compatible with the new technology. While manufacturers are currently inferring that set-top boxes in the market do not have a long life, the life of a set-top box with average domestic use is unknown. For example, while sales indicate that Australian households have historically upgraded and purchased a new television every few years, anecdotal evidence suggests that many people are keeping their existing television sets and adding second and third sets. Further, higher-priced integrated digital television receivers are now appearing on the market. It is expected that consumers will expect these units to have longer lives than lower-cost set-top boxes. MPEG-4 Part 10 as an HDTV encoding standard The ABC believes that there are potential advantages to be gained from replacing MPEG-2, the video encoding standard used in DVB, with alternatives that allow greater compression and thus have the potential to relieve some of the current bandwidth constraints on broadcasting at 1080i resolution. In particular, the MPEG-4 Part 10 HDTV encoding
9 ABC Submission: Review of High Definition Television Quota Arrangements 8 standard, 1 which was recently introduced to the International Telecommunications Union, is of interest, as it is reported to deliver bit-rate savings in the order of 40% over MPEG-2. 2 The MPEG-4 Part 10 standard has been adopted as an interchange format for satellite platforms and is widely used in new media. It is currently being explored in countries, such as France, which are yet to commence digital terrestrial television broadcasting. As with the above proposal to eliminate the HD-SD simulcast, the ABC acknowledges that any move to adopt a more bandwidth-efficient encoding standard for HDTV in Australia it would require a phased and mandated introduction to allow time for compatible receivers to fully penetrate the market. Similarly, broadcasters would need time to plan for the move to a new encoding standard as there would be a significant cost in upgrading infrastructure. Sufficient forward notice would allow broadcasters to integrate such upgrades into their existing capital equipment placement schedules as such equipment fell due for replacement. 1 MPEG-4 Part 10 is also known as Advanced Video Coding (AVC) or ITU-T Rec. H International Organization for Standardization/Organisation Internationale Normalisation. Coding Of Moving Pictures And Audio: Report of The Formal Verification Tests on AVC (ISO/IEC ITU-T Rec. H.264), ISO/IEC JTC1/SC29/WG11 MPEG2003/N6231 December 2003, Waikoloa )
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