Backgrounder: Digital television
The current television broadcasting system
All present New Zealand terrestrial (i.e. land-based) television services1 employ
analogue terrestrial transmission using radio frequency spectrum in the VHF and
UHF bands from hill-top sites to give coverage of main population areas,
supplemented by many low-powered transmitters in areas shaded from the main
sites.
Most satellite broadcasting is already in digital format, including the “Sky Digital”
satellite platform, which approximately 30% of households have. Sky use a
“conditional access” system to encrypt most programmes, including TV3, TV4,
Prime and Trackside. TVNZ also has its own satellite capacity, which it currently
uses to broadcast unencrypted regional versions of TV One and TV2. These
TVNZ programmes are available to any person owning suitable satellite receiving
equipment and also, by agreement with Sky, to Sky Digital subscribers. TVNZ
does not currently promote a separate free-to-air satellite service, but a number of
independent retailers sell free-to-air satellite receiving equipment to the public.
Telecom NZ has recently announced plans to distribute television services in
digital format over its broadband network, which can commence without alteration
to current government policy. TelstraClear currently distributes Sky programmes
via its cable system in analogue format.
What is digital television?
Digital television is a method of transmitting television and other information to the
home. Broadly speaking, four platforms are able to provide digital television:
terrestrial, satellite, cable, and network or Internet connections. Of these
platforms, only digital terrestrial television (DTT) requires government action to
commence, through government ensuring suitable spectrum is available.
In comparison to analogue television, digital television can offer additional
programmes using the same amount of spectrum, as well as integrated teletext,
electronic programme guides and features such as choices of camera angles or
language. Other services can also be distributed in addition to, or in place of,
television services such as Internet access, email, banking and teleshopping.
Digital television can also provide viewers with improved picture and sound
quality.
The state of play for digital terrestrial television (DTT)
A major focus of the broadcasting industry to date has been to map a pathway for
DTT, which was originally predicted to rapidly replace existing analogue terrestrial
television. However, experience internationally has shown that actual uptake and
successful use has been slower and more limited than initially predicted.
Current government and industry planning for New Zealand DTT is based on
internationally recognised standards using spectrum in the UHF TV bands.
Capital investment required for existing broadcasters to establish a basic DTT
platform would be relatively modest, as much of the existing distribution system is
already digital capable. Some in the broadcasting industry are sceptical that an
1
TV One, TV2, TV3, TV4, Prime, Trackside, Sky UHF and regional broadcasters.
economic model for DTT will emerge, however, and are considering alternative
digital television platforms such as free-to-air satellite. Others see DTT as
inevitable in the long-term for up to 80% of New Zealand’s population.
Government decisions to date
In December 1998, amidst initial industry enthusiasm for digital television, the
previous government decided to auction suitable spectrum for DTT. Following
the change of government in November 1999, digital television issues were
instead taken up as part of a new broadcasting work programme.
In December 2002, Cabinet agreed on objectives to guide future digital television
policy development. Cabinet agreed that broadcasters and viewers should be
free to choose the platform (e.g. satellite, terrestrial or cable) by which digital
television is provided, based on factors such as cost, content and reliability.
Cabinet also decided not to set an analogue switch-off date initially, but to be
open to an industry-agreed switch-off date to encourage late-adopters.
Cabinet directed officials to report back on a number of issues, leading to the
present decisions. Cabinet considers that further development of digital television
services in New Zealand is likely to be best assisted if government, public and
commercial broadcasters, and related industry interests work co-operatively to
resolve key issues. The Government has concluded that planning and investment
in digital television transmission platforms clearly requires a satisfactory business
case (which must consider platform establishment costs, ongoing transmission
costs, costs of digital programming, promotion and, ultimately, attractiveness to
consumers) before proceeding.
The present decisions of Cabinet include:
 TVNZ and the Māori Television Service are to prepare plans for digital
services, beginning with a planning timetable;
 where content is publicly funded it should continue to be available free-to-air;
 the Ministry of Economic Development is to monitor terms of access to
satellite broadcasting capacity;
 government is to liase with the wider broadcasting industry regarding the
development of a New Zealand digital TV group to plan for and promote digital
television;
 the broadcasting industry and Standards NZ should continue to have the
primary role in adopting technical standards for transmission and reception of
digital TV which promote consumer confidence;
 holders of spectrum licences are to be able to convert existing analogue
licences to digital licences suitable for DTT, subject to existing valuation
policies and technical compatibility;
 agreement in principle to:
 the reservation of two nation-wide sets of spectrum licences suitable for
DTT in the UHF bands (i.e. sufficient spectrum for up to 10 or more
programmes) for simulcasting existing analogue television services in
digital format and/or for public broadcasting;
 competitive allocation by auction of four nation-wide sets of interleaved
spectrum licences suitable for DTT in the UHF bands presently used for
commercial services, and of two 8 MHz management rights in respect of
spectrum between 502-518 MHz;
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an auction of DTT spectrum will only be held when there is sufficient demand,
and subject to the government reconfirming the agreed allocation option;
access to satellite broadcasting capacity will be improved by moving some
existing terrestrial services to other bands.
TVNZ analogue terrestrial transmission to remote areas, previously a NZ On
Air responsibility, will now be maintained through a direct subsidy to TVNZ.
Next steps
The Minister of Broadcasting and Associate Minister of Communications will
contact interested parties over the next few months inviting them to establish a
digital television group. The challenge is for industry to work co-operatively
towards a digital roll-out based on a sound economic model.
Further information
Cabinet papers relating to digital television platforms and standards and spectrum
management will be available on the Ministry of Economic Development's website
(www.med.govt.nz).