Ministry of Economy and Sustainable Development. Digital Terrestrial TV Broadcasting Switchover Action Plan and Recommendations

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1 Ministry of Economy and Sustainable Development Digital Terrestrial TV Broadcasting Switchover Action Plan and Recommendations

2 The main targets of the government of Georgia in the process of switchover to DTT broadcasting are: Support of freedom of expression and media plurality; Promotion of Georgian broadcasting market and locally made content; Minimizing barriers for entering in to Free-To-Air broadcasting market; Support for highly effective use of limited natural resources, i.e. radio frequencies; Creating a competitive environment by introducing alternative Free-to-Air digital terrestrial MUX platforms; Insuring access of end users to diverse FTA broadcasting content; Promotion of the field to attract investments; of Georgia

3 Legislative amendments / authorization of broadcasters TV brodcasting / TV content creation network / MUX operator business activity is separated from the Licensing of TV broadcasters is being abrogated. Content producers may enter TV broadcasting market by means of simplified authorisation procedure Broadcaster(s) is additionally allowed to acquire a set of radio frequencies for the purpose of building a DTT network / MUX platform. Licence fees paid by the broadcasters ahead in time in exchange for the use of FTA analog broadcasting radio frequency from 17 June 2015 onwards, will be reimbursed. of Georgia

4 DTTV standards and technologies DTTV broadcasting platforms with nationwide coverage obligation will use the most advanced technology (DVB-T2, (EN ) with MPEG4 data compression mechanism (ISO/IEC 14496)) that brings a possibility for a MUX platform to carry about 15 standard definition (SD) or 4 to 6 high definition (HD) TV programmes. DTTV broadcasting platforms, dedicated for the local (regional) coverage, may be built using DVB-T standard with either MPEG4 or MPEG 2 data compression technology. Ministry of Economy and Sustainable Development of Georgia

5 Digital Receiver - Set-Top Box specification In order to ensure interoperability of transmitted digital broadcasting signals with the receivers, Set-Top-Box technical specification document was developed, (based on recognized International Standards) within the framework of ongoing EBRD technical support project; It is recommended that digital terrestrial TV receivers importers/producers use the document as a manual; It is recommended that all set top boxes available on Georgian market are duly certified and compatible with the basic requirements outlined in the document; Ministry of Economy and Sustainable Development of Georgia

6 Rules of Operation of Service Information in the Georgia DTTV Networks Document on Rules of Operation was developed within the framework of ongoing EBRD technical support project.. The document describes technical parameters and digital signal transmission rules for the Georgia Digital Terrestrial TV Networks that ensures interoperability of transmitted broadcasting signals with receiver specifications. Georgian Government recommends that all DTTV network/multiplex operators apply the basic rules outlined in the document Ministry of Economy and Sustainable Development of Georgia

7 Coverage obligations and recommendations Additional documents developed under EBRD project covers: Technical specifications of the Georgian nationwide DTTV network (s) (both transmission and distribution networks), budgetary cost estimation of each network element and key parameter indicators (KPI). Technical planning shows that in order to achieve coverage similar to the current analog broadcasting network (90% of population) DTTV network has to use 42 main sites of Teleradiocenter and about 60 gap-fillers. Based on the above, it is recommended that multiplex platforms with nationwide coverage requirement use main sites of the Teleradiocenter. However, MUX operators are free to submit alternative RF planning scenarios, and build the networks using alternative infrastructure. Ministry of Economy and Sustainable Development of Georgia

8 Frequency bands and future usage Parts of the spectrum that were initially reserved for broadcasting (in particular, the frequencies in the 800 MHz band from 2014 and the 700 MHz band, after switchover) will be used for wireless broadband services in accordance with international best practice. Due to the frequency shortage MHz band will be used for DTTV networks during simulcast; UHF namely - broadcasting channels under MHz band will be freed after digital switchover and will be available for digital terrestrial TV broadcasting; VHF III namely - broadcasting channels under MHz band will be used for local digital terrestrial TV broadcasting platforms after June 17, Ministry of Economy and Sustainable Development of Georgia

9 Frequency Resources for Transitional and Long Term Periods Based on RF frequency resource availability under MHz band seven nationwide digital terrestrial TV broadcasting platforms (having different technical specifications) are planned. Due to the frequency shortage, during simulcast, two sets of temporary frequencies were allocated for building two nationwide MUX platforms After the DSO, temporary frequencies will be replaced by the sets of frequencies according to the pre-defined plan. As soon as legislative amendments take place, GNCC will release sets of frequencies for multiplex platforms, according to the following scheme:

10 Frequency Resources Planned for DTT Networks and their Assignment Multiplex Platforms 1,2, 3, 4 and 5 Sets of frequencies for five nationwide digital terestrial TV broadcasting platforms will be available by means of open contest. Multiplex Platform 6 Set of frequencies for multiplex platform 6 (dedicated primary for carrying public broadcasters TV programs) will be assigned free of charge to the Teleradiocenter - State owned entity; Local Multiplex Platforms Frequency channels (available under VHF III band after switchover) for local (DVB-T or T2 standard) multiplex platforms will be assigned free of charge to local free-to-air broadcasters/local broadcasters union. Multiplex Platform 7 Set of frequencies for multiplex platform 7 will be reserved and decision will be made later - taking into consideration the results of open contest.

11 Open Contest, Five Multiplex Platforms and Subsequent Responsibilities Under the open contest set of frequencies - Lot for the following five DTTV broadcasting platforms (with different functions and technical specifications) will be available: Lot A (Multiplex Platform 1) Under this Lot: A set of frequencies planned for MUX platform 1 and allocated on a temporary basis, for building a nationwide DTT network with local content insertions for each of the ten allotment zones will be available immediately after the completion of open contest. Winner will be responsible for the construction of an appropriate network till June 17, 2015 After the DSO temporary set of frequencies for the same MUX platform will be substituted by the frequency resource which can support the local content to be delivered within subzones of each of the ten allotment zones. Winner will be responsible for constructing an appropriate network gradually.

12 Open Contest, Five Multiplex Platforms and Subsequent Responsibilities Lot B (Multiplex Platform 2) Under this Lot: Frequency resource for the nationwide multiplex platform with the ability of transmitting same content, will be available after June 17, 2015 Winner will be responsible for the construction of an appropriate network for July 17, 2015

13 Responsibilities of A and B Lot Resource Holders Multiplex Platform 1 and 2 license holders are responsible: building nationwide DTT network dedicated for the transmission of Free to Air and/or Free to View content. to provide authorized broadcasters an access to the MUX platform resources without discriminatory restrictions on the basis of cost oriented price, not exceeding the one indicated in the contest proposal. In case of no demand for Free to Air access, license holder is allowed to provide Pay TV services. But regardless of such permission, upon demand, a license holder has to provide an access to the MUX resources unconditionally.

14 Open Contest, Five Multiplex Platforms and Subsequent Responsibilities Lot C, D and E (Multiplex Platform 3, 4 and 5) Under this Lot: Frequency resource for the nationwide DTT Network with the ability to transmit same content to all of the ten allotment zones will be available after June 17, 2015 Frequency resource holder will be responsible for building a DTT network that covers not less than 50% of population and provides Free to air / Free to view and Pay TV services

15 Design of an open Competitive Contest and Relevant Recommendations The GNCC during elaboration of the design of open competitive contest shall take into consideration following recommendations: Bidders shall have the chance to submit proposals for any combination of the lots The lots shall be defined in advance. This shall ensure construction of multiplex platforms providing free to air / free to view content transmission (lots A and B in particular). It is recommended to define the following combinations of the lots: A+0 B+0 A+B A+1 B+1 A+B+1 A+2 B+2 A+B+2 A+3 B+3 A+B+3

16 Design of an open Competitive Contest and Relevant Recommendations Bidders shall have the chance to submit any number of proposals for any combinations of the lots; Bidders shall submit the documents confirming their financial background; Documents submitted by bidders shall include the technical and financial/tariff proposals. The proposals shall be evaluated by defined criteria with the relevant points and weighting factors.

17 Design of an open Competitive Contest and Relevant Recommendations A table below outlines additional criteria for evaluating bidders proposals related to MUX platforms A and/or B Additional point(s) shall be granted to the bidder, if he managed to submit a number of MoU s signed with the national, local and other authorized broadcaster A Agreement with national broadcaster 10 points B Agreement with local broadcaster 2 points C Agreement with satellite license holder authorized broadcaster. 1 point

18 Design of an open Competitive Contest and Relevant Recommendations GNCC will not set an one-off licence fee for obtaining sets of radio frequencies Bidders will be able to define maximum fee taking into account the business model relevant to the lot combination selected by bidders Financial/tariff proposal evaluation method shall be based on the following criteria A. The RF spectrum licence fee defined by the bidder to be transferred to the state budget of Georgia B. The price cap for transmission of free-to-air TV content within multiplex platform/platforms

19 Design of an open Competitive Contest and Relevant Recommendations Bidders applying for less lots within the given combinations, shall be granted more points e.g. A+0 100% B+0 95% A+B 95% A+1 90% B+1 85% A+B+1 85% A+2 80% B+2 75% A+B+2 75% A+3 70% B+3 65% A+B+3 65%

20 Multiplex 6 / digital terrestrial multiplex platform for the public broadcaster In order to guarantee construction of at least one DTTV platform before simulcast period and to ensure that public broadcaster's Free-to-air content is broadcasted through Digital terrestrial platform (including simulcast period) a set of frequencies (including frequencies for the distribution network) will be assigned to Teleradiocenter state owned entity Digital terrestrial broadcasting platform 6 (including distribution network) - has to be constructed before March 1, 2015 During the simulcast period the Multiplex 6 will carry public broadcaster's as well as corresponding Free-to-air broadcasters TV content.

21 Dedicated terrestrial multiplex platform for the Public broadcaster and competition In order to secure competition Teleradiocenter State owned entity - participation in the open contest will be restricted and will not be allowed to: Manage free capacity of the multiplex platform 6 broadcasters as well as to provide pay TV services and offer access to free-to-air But in order to use effectively capacity not loaded by public broadcaster s TV content of MUX 6 Teleradiocenter has to provide access to licensed MUX operators upon their request (on the first come first serve bases) with non-discriminatory conditions and cost-oriented prices. In addition, Teleradiocenter (as far as the company is owner of the main passive infrastructure - masts to be used by DTTV networks) will be obliged to meet reasonable requests for access to, and use of, specific network elements and associated facilities, and provide service with non-discriminatory conditions and cost-oriented prices

22 Support of Local Broadcasting and Formation of Local Multiplex Platforms The planned course foresees assignment of frequency resource(s) necessary to form local DTT broadcasting network/multiplex platform free of charge taking in consideration the following In case more than one local free to air broadcaster willing to form local multiplex platform GNCC will assign frequency resource(s) free of charge and without an open contest to the existing/established voluntary union of local broadcasters. The union must be established by the end of May 2014 and must present an application form to the commission. In case more than one local union will be established (and/or any of the local broadcasters was not able to join the association despite their willingness to do so) the GNCC will ensure the frequency resource(s) allocation based on the open contest.

23 Local multiplex platforms and relative responsibilities The local broadcaster/the Union of local broadcasters owning the frequency resource(s) will be responsible To ensure the formation/completion of local DTT network/multiplex platform by March 1, 2016 To provide only free to air/free to view TV content (broadcasters authorized in Georgia) In case of demand, must ensure non-discriminatory access of the broadcasters (authorized in Georgia) to free resource(s) of the multiplex platform. In spite of the fact, that local broadcasters/union of local broadcasters will be able to use frequency resource(s) only after DOS, in case of timely activities they will be able to complete the preliminary works for network provisioning by June 17 th 2015 and launch the local multiplex platform with in the shortest time possible (after ASO).

24 Simulcast period Simulcast period must comprise of no less than three month period, starting from March 17 th 2015 to June 17 th 2015 During simulcast the state MUX platform will ensure provision of TV content of GPB as well as all the existing national free to air broadcasters in SD format with no charge. During simulcast, the broadcasters producing local/regional content, wish to stay in broadcasting business only, can join the state MUX platform and be carried with no charge. It is duty of a content provider, during simulcast period, to deliver signal to MUX operator headend in the format described in technical documentation, on their own expense.

25 Customer issues, State subsidy policy and information within the reform state provision includes the following: State aid (provisioning and installation of STB s) for the families registered as socially vulnerable and having less than 70,000 total rating points(at the moment total estimated number varies between 225, ,000) Financing the public information provisioning activities. Within the will be established the Digital Broadcasting Agency. The agency shall coordinate the activities related to the transition on digital broadcasting, namely providing information on key aspects of the reform to the interested parties, as well as providing necessary state aid to the socially vulnerable families.

26 Digital Broadcasting Agency and information provision to the interested parties In order to provide relevant information to the public and interested parties, also provide timely aid if necessary, the "Digital broadcasting agency shall: Set up 24/7 multilingual hotline service; Set up a special informational website, where all relevant information will be presented and updated (www.digital.gov.ge); shall provide updated information on the sellers/resellers of certified STBs ; Shall produce the social advertising material and coordinate its via media channels; dissemination Shall print informative leaflets for customer and sellers and distribute these materials in the relevant stores/shops; Shall provide special trainings for journalists and interested parties.

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