DigiTAG

Web Letter

April 2011

DigiTAG seeks to inform members and non-members about important developments in the digital terrestrial television market. Each month, DigiTAG distributes its web letter with news updates and further exploration of one topic.

To subscribe to the DigiTAG Web Letter, send an email to the DigiTAG Project Office.

The spectrum debate in the
United States

 

"Why should people in Kentucky have their local stations' signal potentially degraded….so urbanites in Manhattan can have a faster download of the app telling them where the nearest spa is located?" - Gordon Smith, NAB State of the Industry address [1]

At the NAB Show in Las Vegas earlier in the month, plans for spectrum auctions were a topic of intense debate. Two representatives from the Federal Communications Commission (FCC) defended their proposal for incentive based auctions to allocate frequencies currently used by broadcasters to wireless broadband providers. Meanwhile broadcasters, represented by the National Association of Broadcasters (NAB), declared themselves to be "in full battle mode," ready to protect themselves from an unwelcome seizure of their spectrum.

Proposed incentive spectrum auction

In March 2010, the FCC presented its National Broadband Plan [2] which calls for the availability of wireless broadband services to reach 98% of the United States in the next 5 years. The plan calls for the recovery of 120 MHz of frequencies from terrestrial broadcasters which would then be re-allocated to wireless telecom providers through a spectrum auction. To encourage broadcasters to voluntarily give up their frequencies, part of the proceeds raised from the auctions would be re-distributed to broadcasters.

During his keynote presentation [3] at NAB, the FCC chairman Julius Genachowski spoke of a "looming spectrum crisis". According to Genachowski, 25 million people watch video on cell phones while 55 million tablet computers will be sold in 2011 whose demands on spectrum are 120 times greater than that of a feature phone. Without additional frequencies allocated to wireless broadband providers, users will face spectrum congestion, dropped calls, and higher prices.

Genachowski also defended the proposed incentive auctions which, he believes, will relieve the spectrum crunch and provide revenue to broadcasters. Broadcasters who give up their frequencies will be compensated directly, while broadcasters that choose not to give up their frequencies will be compensated for any channel changes that it may be necessary to aggregate spectrum into large blocks for use by wireless broadband providers. Genachowski clearly stated that broadcasters do not have the right to keep their current channel location as this would undermine the potential effectiveness of the auction. However, any move from the UHF to VHF frequency band should be voluntary.

In a further attempt to convince broadcasters of the value of the proposed incentive spectrum auctions, the head of the FCC's Media Bureau, Bill Lake, noted that it was not the FCC's intention to degrade television services. Rather, such issues should be addressed in the formulation of the licensing requirements prior to the auction. He also suggested that it was unlikely that such auctions would take place before 2015.[4]

Broadcasters' position

Broadcasters have voiced their concerns regarding the proposed incentive auctions. While not opposed to the spectrum auctions so long as they are voluntary, broadcasters have questioned the impact on those broadcasters that choose not to participate in the auction and continue to transmit their services on the DTT platform.

For example, these broadcasters may be encumbered by new spectrum fees, face increased interference as services are packed more closely together, and lose current coverage levels. In addition, innovation will be jeopardized as no capacity will be available for the launch of new services such as 3DTV. According to one broadcaster, the reallocation and re-packing of spectrum will result in a "significant financial cost" to broadcasters while a second digital transition could create viewer disruption, confusion and dissatisfaction.[5]

During the annual NAB State of the Industry address, Gordon Smith, head of the organization, evoked his skepticism of the "spectrum crisis" which he instead called a "capacity crunch." According to Smith, the mobile broadband industry should invest more in their infrastructure by building out their networks and improving the efficiency of their receiver standards rather than purchasing spectrum from broadcasters. He called on the General Accounting Office to undertake a comprehensive inventory of spectrum usage.[6]

Broadcasters have been awaiting the engineering models from the FCC that show broadcaster frequency assignments and coverage areas following the auctions. Such information is expected in the next few months and will help broadcasters better understand the impact of the incentive spectrum auctions.

Impact of the proposed AT&T and T-Mobile merger

The FCC must receive congressional authorization before it can undertake its incentive spectrum auctions and allow broadcasters to share in the auction proceeds. However, the likelihood of such legislation being enacted this year is slim. Disagreement on spectrum policy remains between Democrats and Republicans. In addition, members of Congress will be reluctant to approve such legislation without a better understanding of the outcome of the proposal by AT&T to purchase T-Mobile USA from Deutsche Telekom for $39 billion.

As a next step, the proposed AT&T and T-Mobile merger requires the approval of the Department of Justice and the FCC. Congress is also expected to hold hearings on the merger, with a first hearing scheduled for 11 May. Altogether the review process could take up to 18 months. By then, further delays to the legislation on spectrum auctions are probable since members of Congress are unlikely to risk jeopardizing their relationship with broadcasters by approving such legislation during an election year.   

The proposed merger could have further impact on the spectrum debate. Should the merger receive government approval, AT&T may find that its need for spectrum diminishes and, as a result, reduce the amount that it bids for any newly available spectrum capacity. The projected revenue gain of $30 billion generated from the spectrum auction may no longer hold. The market price could also be affected by the decrease in the number of competitors vying for the spectrum, as the total number of national mobile operators is reduced from 4 to 3 (AT&T, Sprint, Verizon).


Source: Natalie Mouyal, DigiTAG Project Office

___________________

[1] See http://www.nabshow.com/2011/newsroom/
pressRelease.asp?id=2506

[2] See the DigiTAG web letter on this topic:
http://www.digitag.org/MembersOnly/Webletters/
2010/Mar2010.html

[3] See http://www.fcc.gov/Daily_Releases/
Daily_Business/2011/db0412/DOC-305708A1.pdf

[4] See http://www.tvnewscheck.com/article/2011/
04/12/50509/frank-fcc-plan-like-leno-in-prime

[5] See http://www.broadcastingcable.com/article/
466622Broadcasters_to_Hill_Repacking_Sharing_
Could_Hurt_Hundreds_of_Stations_Millions_of_
Consumers.php

[6] See http://www.nabshow.com/2011/newsroom/
pressRelease.asp?id=2506

 

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DTT NEWS ROUND-UP

For access to the full articles archive, please go to DigiTAG News

United Kingdom - 10 million DTT-only households at the end of 2010

Latest figures published by Ofcom show that 92.5% of households received digital television services at the end of 2010.

During the fourth quarter of 2010, 3.9 million DTT receivers were sold. IDTVs accounted for 80% of these receivers. In 2010, a total of 12.8 million DTT receivers were sold which is a decrease of 12.6% compared with total receiver sales in 2009. 

Source: Ofcom website

France - 16.1 million DTT households

The latest information published by the CSA shows that 91.6% of households receive digital television services. In addition, 69% of households have converted all of their television sets to digital services.

A total of 16.1 million households rely on the DTT platform which represents 60.2% of all television households. DTT is the largest and fastest growing digital television platform. 

Source: CSA website

Spain - Royal Decree confirms auction

The government has approved a Royal Decree that that will make 310 MHz of spectrum available for wireless broadband services.

Part of the available spectrum will be taken from the 800 MHz band which is currently used by the DTT platform. These frequencies from 790-862 will be available at the end of 2014. 

Source: Ministry of Industry, Tourism and Commerce

Russia - Interest in DVB-T2 growing

According to Broadband TV News, the Ministry of Communications is considering to launch DTT services using the DVB-T2 standard.

DVB-T2 pilot zones may be set up in different regions.

Source: Broadband TV News

Poland - DTT services available to 46% of the population

The broadcast network operator Emitel has announced that it has extended the coverage of DTT services.

The services in Multiplex 2 are now available to 46% of the population while the services in Multiplex 3 have been extended to 24% of the population.

Multiplex 2 will reach 87% of the population by the end of October

Source: Emitel website

Ukraine - Tender opened for services on DTT platform

The National Council on Television and Radio Broadcasting (NRADA) has opened a tender for broadcast services on the DTT platform.

A total of 28 free-to-air television services will be made available on three national DTT multiplexes (Mux-1, Mux-2, Mux-3) while several services will be available on one regional DTT multiplex (Mux-5).

All of these multiplexes are operated by Zeonbud. The DVB-T2 standard in combination with MPEG-4 AVC will be used.

Source: NRADA website

Japan - ASO delayed in Iwate, Miyagi and Fukushima

The Ministry of Communications has announced that analogue switch-off will be delayed in the three areas most severely affected by the 11 March earthquake and tsunami.

Initial plans had called for a nationwide switch-off on 24 July 2011. However, the areas of Iwate, Miyagi and Fukushima have had many of their broadcast facilities destroyed and the government-led information campaign has ceased.

Source: advanced-television.com