FOXTEL Response. Friday Septemer 3, Australian Communications and Media Authority Five-year Spectrum Outlook

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1 FOXTEL Response Friday Septemer 3, 2010 Australian Communications and Media Authority Five-year Spectrum Outlook

2 This document is Foxtel Management Pty Ltd s (FOXTEL) response to the Australian Communication and Media Authority s (ACMA) Five-year Spectrum Oulook , released on 31 March, FOXTEL Contact Details: Peter Smart Chief Technology Officer FOXTEL Ph: Adam Suckling Director Policy & Corporate Affairs Ph:

3 EXECUTIVE SUMMARY FOXTEL welcomes the opportunity to respond to the ACMA s Five-year Spectrum Outlook and congratulates the ACMA on its open approach to spectrum management through the annual publication of its Five-year Spectrum Outlook papers. As a finite public asset, spectrum allocated for commercial purposes should be managed in a way that enhances Australia s prosperity through supporting new industries, products and jobs of the future. Regrettably successive governments have not managed spectrum optimally and in the case of Broadcast Spectrum, the principle beneficiaries have been commercial broadcasters and their commercial interests, not the Australian public. The Government s recent decision to return 126 MHz of Broadcast Spectrum as the Digital Dividend for auction in the second half of 2012 is a welcomed announcement. However FOXTEL believes there is more to be done to manage Australia s scarce spectrum asset more efficiently and to optimise Australia s prosperity in the digital economy. FOXTEL has a significant interest in how Australia s spectrum is managed both in advancing competitively neutral policy settings and directly, in day to day operations. FOXTEL response focuses on 2.5 GHz and 3.6 GHz bands, the Digital Dividend and Satellite Parks. A summary of FOXTEL s recommendations included in this response are as follows: Allocate one block of the Digital Dividend Broadcast Spectrum to Community broadcasting, such as National Indigenous Television (NITV) and Australia s Public Affairs Channels (A-PAC). Conduct a review of the remaining Broadcast Spectrum held by the FTA networks to ensure it is being used as efficiently as possible along the lines of the review that Ofcom completed to ensure the efficiency in the use of Digital Terrestrial Television (DTT) spectrum in the United Kingdom. Move to a rational pricing structure for Broadcast Spectrum licences to encourage more efficient use. Licence fees should be set on the basis of the amount of spectrum used and its opportunity cost rather than being based on a percentage of advertising revenue. Determine the future of the 2.5 GHz band by the end of 2010, including the mid-band gap and lower 2 GHz allocations for Electronic News Gathering (ENG), Electronic Field Production (EFP) and Television Outside Broadcast (TVOB) purposes. Provide the opportunity for all ENG, EFP and TVOB users to secure direct licenses on an open, consistent and competitively neutral basis. Restrict Broadband Wireless Access (BWA) licenses being issued in major population centres in any part of the MHz frequency band, including the MHz part of the Extended-C band. Remove references to Satellite Parks from all ACMA documentation to remove ambiguity, on the assumption Satellite Parks are no longer being considered as a policy solution. Include greater representation of Subscription Television s interest at the annual Radio Communications Conference and spectrum working groups. 3

4 ABOUT FOXTEL FOXTEL is Australia's leading subscription television provider and is connected to almost 1.6 million homes on cable and satellite through retail and wholesale distribution. FOXTEL strives to ensure our six million viewers find TV they want to watch every time they switch on their television through delivery of more than 150 channels covering news, sport, general entertainment, movies, documentaries, music and children s programming. FOXTEL commenced distributing its services on cable with 20 channels in 1995, expanding to 31 channels and satellite distribution in 1999 and increased its offering to 45 channels in 2002 following the completion of the FOXTEL-Optus Content Supply Agreement. The FOXTEL Digital service was launched in 2004, and FOXTEL is now giving Australian viewers the choice of more than 150 Digital channels. Since its launch, FOXTEL has extended its Digital innovations by adding a raft of new channels and interactive features including additional news, sports and weather applications, as well as FOXTEL iq, a fully integrated Personal Digital Recorder, launched in FOXTEL launched its mobile service Telstra Mobile FOXTEL in 2006 which now carries 33 channels and is one of the world s most substantial mobile offerings. The live broadcast service FOXTEL Live2Air on Virgin Blue was launched in August 2006 and is now available across Australia on the Virgin Blue jet fleet providing 24 channels of live FOXTEL. FOXTEL launched its High Definition service in June 2008 with five dedicated 24-hour HD channels- BBC HD, Discovery HD, National Geographic Channel HD, FOX SPORTS HD and ESPN HD plus Australian television premiere blockbuster movies available immediately when you want them through the FOXTEL Box Office HD On Demand service. The new generation FOXTEL iq2 combines HD programming with a huge disk drive and intuitive and easy to use electronic programming guide making it even easier for subscribers to watch what they want and when they want. FOXTEL directly employs more than1900 people and a further 1400 workers are indirectly engaged by FOXTEL in sales and installation services nationally. The FOXTEL Television Centre at North Ryde in Sydney is the headquarters of FOXTEL's national subscription television operations and houses FOXTEL s television studios, broadcast operations and cable and satellite transmission facilities. FOXTEL also operates a national Customer Solutions Centre based at Moonee Ponds in Melbourne, a purpose built state of the art call centre. FOXTEL is owned by Telstra Corporation Ltd (50%), The News Corporation Ltd (25%), and Consolidated Media Holdings Limited (25%). DIGITAL DIVIDEND FOXTEL provided a response to the Department of Broadband, Communications and the Digital Economy s Digital Dividend Green Paper in February. FOXTEL strongly supports the Government s decisions to release 126 MHz of Broadcast Spectrum as the digital dividend and auction off spectrum in the second half of This is a big step forward in managing Australia s scarce spectrum asset more efficiently, for the benefit of Australia s prosperity through supporting industries, products, services and jobs of the future. While a decision is yet to be made on future allocations, FOXTEL also strongly supports one block of spectrum being reserved for television services such as Community TV as 4

5 suggested in the Government s Digital Dividend Green Paper. 1 If the Government does reserve a block of spectrum for community television it must ensure this block is not used wastefully. This block of spectrum could support at least five television channels if it is managed as a multiplex (and - it is critical to recognise - even more channels if they are transmitted with MPEG 4/DVB-T2 protocols). Channels could include National Indigenous Television (NITV), Australia s Public Affairs Channel (A-PAC) and Community Television, which are currently broadcast on Channel A. However, while FOXTEL supports recent Government decisions to release 126 MHz of broadcast spectrum, FOXTEL is still concerned there has not been greater consideration to ensure spectrum is efficiently utilised. The new approach to spectrum leaves the broadcasters with 224 MHz of spectrum. This is more spectrum than they would need if they ran an efficient system. If Australian broadcasters adopted the efficient broadcasting approach being implemented in the UK they would be able to increase the capacity of their remaining spectrum substantially. In the UK, once MPEG 4 and DVB-T2 transition is complete it is estimated spectrum efficiency will increase by 2.6 times. 2 There has also been no reference from ACMA on moving toward a more rational pricing system for broadcast spectrum so that broadcasters have an incentive to use spectrum efficiently rather than wastefully. Because FOXTEL pays a market rate for spectrum it is motivated to optimise its bandwidth to support new channels, products and HD services that are launching every year. Through digital multiplexes and advanced compression technologies such as MPEG 4/DVB-S2 up to six HD services are supported on FOXTEL s satellite transponders. FOXTEL believes that the ACMA should commence a review of the broadcasters use of the remaining spectrum along the lines of the review that Ofcom completed into facilitating efficiency in the use of Digital Terrestrial Television (DTT) spectrum. 2.5 GHZ BAND FOXTEL provided a response to the ACMA s Review of the 2.5 GHz band and long term arrangements for ENG in March this year. It contains FOXTEL s specific recommendations for the future of this band. We note that the review of the 2.5 GHz band has been in train for over four years and a decision needs to be made in the coming months over the future of this band and how other ENG, EFP and TVOB services will be supported. Broadcast of Australian news and live sporting and major events are an important and often differentiated part of FOXTEL s entertainment offering all of which rely on services supported by the 2.5 GHz band for their production. FOXTEL acknowledges there is a case for releasing some of the 2.5 GHz band for 4G International Mobile Telecommunications (IMT) purposes, based on economic modelling and international precedent and harmonisation. While FOXTEL understands the pressure to release 2.5 GHz for 4G IMT use, it is vitally important alternative arrangements are made for current and future ENG, EFP and TVOB operations, in a timeframe that doesn t affect current ENG, EFP and TVOB operations. 1 DBCDE, Digital Dividend Green Paper, (2010), pg 22 2 Ofcom, Digital Television: Enabling New Services: Facilitating Efficiency on DTT, (2008) 5

6 Broadly, FOXTEL supports the 2.5 GHz band being allocated for IMT purposes but with the 50 MHz mid band gap continuing to be used for ENG, EFP and TVOB purposes. However, FOXTEL maintains further allocations are necessary in the lower 2 GHz band for ENG and EFP, on the basis: The incumbent licensees alone can use up to 400 MHz of spectrum at one time during major events - that is all of the 190 MHz allocation and additional spectrum in the lower bands. On top of this, non -TOBN licensee users (current and future), such as FOXTEL and its external channel partners, need to be accommodated and their demand for TVOB services in particular is growing. Currently there are a number (perhaps 15 to 20) of TVOB users of the 2.5 GHz band that do not have direct licensed access to this band. For their day to day operations they rely on informal arrangements with the four TVOB licensees. FOXTEL recommends that the licensing arrangements for ENG, EFP and TVOB be reviewed with future spectrum allocations, both in the 2.5 GHz mid-band gap and in the lower 2 GHz frequency bands, being offered and licensed on a consistent and competitively neutral basis across all users. Given FOXTEL s significant commercial interest in the future of the 2.5 GHz band, FOXTEL wishes to participate in any industry working groups that will advise the ACMA on ENG/EFP and TVOB operations and future spectrum requirements and on the optimum licensing model for these services. 3.6 GHZ BAND FOXTEL has made a number of submissions to the ACMA on terrestrial BWA/FSS downlink sharing in the MHz frequency band. FOXTEL also participated in the industry working group established by the ACMA to work through the various compatibility issues that were expected to arise if BWA services were licensed in the MHz band segment. As indicated in our submissions and in the working group, our main interest was to ensure that incumbent urban satellite services, such as our 27 licensed s-to-e downlinks in the MHz band in Sydney, were fully protected from harmful interference emanating from BWA services in the adjacent frequency band. FOXTEL uses this band to bring in a large number of pass-through channels primarily from the Asia Pacific region. FOXTEL maintains that BWA services need to be geographically well separated from critical FSS services, even if operating only in the adjacent ( MHz) frequency band. The ACMA took into account FOXTEL concerns and recommendations when developing the frequency assignment and licensing rules for rural/regional BWA services. We note that BWA services are now rolling out in accordance with those rules in the MHz band and we do not anticipate any compatibility issues with licensed FSS downlinks. During the period FOXTEL has also been participating on Australian delegations to ITU-R study group meetings of WP 4A (satellite interests) and WP 5A (terrestrial BWA interests) to agree a major international report on the compatibility of FSS and BWA services in the MHz band. The report, which includes the Australian frequency assignment/licensing rules for rural/regional BWA services in the MHz band, has now been agreed by ITU-R SG4 and is highly likely to be agreed by SG5 at its next meeting in Nov, 2010 meeting, making it a formal ITU-R report. Turning to the spectrum outlook we note the following paragraph in Table 6.1 on page 172 of the Indicative Work Programs section: Further planning work on 3.6 GHz band in major city areas will be deferred until after the demand for WAS in regional areas has been addressed. Existing licensed FSS Earth stations will continue to be protected during this time. 6

7 This is identical wording to that which appeared in the spectrum outlook and we further note that the ACMA still ranks the overall work in the MHz band to be of short timeframe and high priority. Further on p198 of the current outlook, under Appendix A: Current and imminent projects, it says: The introduction of WAS into metropolitan areas will be the subject of further work, only after the demand for broadband services in regional areas has been addressed. FSS Earth stations in city areas will continue to be protected and for now, the embargo on new frequency assignments in these areas will be maintained. As the licensee of a large number of s-to-e FSS downlinks in the MHz Standard- C band in Sydney, FOXTEL is concerned about any statements that indicate that terrestrial BWA might be licensed in major population centres in any part of the MHz frequency band, including the MHz part of the Extended-C band. FOXTEL would again like to stress that the interference free operation of each of our licensed satellite downlinks is critical to the smooth running of our business and we would be alarmed if any moves were made that negatively affected the performance of those licensed downlinks. SATELLITE PARKS We note a number of references in the Spectrum Outlook to Earth Station Siting, e.g. on pages 125, 127, 180 and 183. We also note that the ACMA considers this to be a short timeframe/high priority task, as it did in the previous Five-year Spectrum Outlook However, whereas the previous document stated that the development of an Earth Station Siting Policy was Under Development and an urgent task, we note that there is no longer such a reference in the current Spectrum Outlook. Hence FOXTEL is unclear as to what is happening on this potentially very important policy issue. In response to various suggestions from the ACMA over the last couple of years, FOXTEL has raised its serious concerns about any policy that might, one day, require existing licensed satellite operators to relocate their Earth station facilities to apparently make way for terrestrial services which have somehow been deemed to be more worthy of using radiofrequency spectrum in major population centres than the licensed satellite services. As the operator of a major licensed satellite Earth station in Sydney, FOXTEL remains ready and willing to respond to any serious proposal that the ACMA may wish to make on this matter. However, if this issue is no longer being pursued and proposals will not be made in the short/medium term, we would recommend that it be removed from future Spectrum Outlook documents. REPRESENTATION & CONSULTATION Being part of one of the world s future industries with a substantial interest in Australia s spectrum management, FOXTEL welcomes the opportunity to work more closely with the ACMA on advancing better policy outcomes in relation to spectrum management Given FOXTEL s considerable experience and interest in progressing better public outcomes and competitively neutral policy settings concerning spectrum management, FOXTEL would welcome the opportunity to present at the annual Radio Communications spectrum conference and requests more or continued involvement in working groups relating to 2.5 GHz, 3.6 GHz and the Digital Dividend. 7

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