FOXTEL Response to the Australian Communication and Media Authority’s Temporary trials of 3D TV and other emerging technologies Friday, 22 October 2010 This document is Foxtel Management Pty Ltd’s (FOXTEL) response to the Australian Communication and Media Authority’s (ACMA) ‘Temporary trials of 3D TV and other emerging technologies, released September, 2010. FOXTEL Contact Details: Peter Smart Chief Technology Officer FOXTEL Email: [email protected] Ph: 02 9813 6666 Adam Suckling Director Policy & Corporate Affairs Email: [email protected] Ph: 02 9813 7593 EXECUTIVE SUMMARY 3D broadcast is an exciting development in television viewing that will provide consumers with new ways of enjoying their favourite programs through a futuristic and immersive television experience. In the interests of advancing Australia’s digital innovation, FOXTEL does not oppose ACMA’s provision of temporary apparatus licenses to conduct technical trials, in this instance for Free to Air (FTA) operators to conduct 3DTV trials. However strict parameters must be maintained around trials to ensure optimal public benefit is derived from Australia’s finite spectrum asset and to protect consumers from becoming confused around ongoing 3D service delivery. For this reason it is paramount trials are not extended beyond their end date. Prior to commencing trials operators must demonstrate a clear path as to how they will deploy 3D technology both commercially and technically on analogue switch off, within their post analogue switch off spectrum allocation There is no point testing a technology where there is no future plan around how it will be supported spectrally. It is critically important that the 3DTV trials by the FTA networks are not seen, or used, by the networks as part of a strategy to ‘spectrum squat’ or as an attempt to undermine the delivery of the billion dollar digital dividend Australians will receive as part of the restack of the 126 MHz of spectrum that the government plans to auction for the services of the future. In addition, while 3D is an exciting development in television, it should not preclude trialing other technology, such as mobile television, particularly where there is a stronger economic case around its deployment. In this context, FOXTEL makes the following recommendations in relation to temporary trials of 3D TV and other emerging technology: 1. Channel B spectrum being currently used for the 3D technical trials must be returned on Analogue Switch Off to ensure Australia achieves its 126MHz Digital Dividend. 2. Operators must provide a clear path for how technology will be deployed commercially and technically post analogue switch off prior to trials commencing, within their spectrum allocations post analogue switch –off and following the restack. 3. Continuing trials should be conducted in the technical format in which the future technology is most likely to be deployed, which in the case of FTA 3DTV is a ‘Service Compatible’ format. 4. The primary purpose for using spectrum for trialing new technology must be technical, not commercial as outlined in the ACMA’s ‘Applications for Apparatus Licenses for the Trial of New Radiocommunications Technologies – Guidelines’. 5. Spectrum allocated for continuing technical trials must not be granted at the expense of trialing other technology that is more likely to optimise Australia’s public benefit, such as mobile television. 6. Channel A should not be used for temporary 3D trails without consideration of other ‘public good’ broadcast uses, such as broadcast of National Indigenous Television or Australia’s Public Affairs Channel. More generally, concerns that have been raised in the paper around spectrum limitations to support 3D TV, accentuate the need for the ACMA to review the operation of the digital terrestrial broadcast spectrum holistically, similar to the review conducted by Ofcom in the United Kingdom (UK) and as FOXTEL has suggested previously in its response to ACMA’s Five Year Spectrum Outlook 2010 – 2014 and earlier in DBCDE’s Digital Dividend Green Paper. Therefore, FOXTEL recommends that ACMA: 7. Conduct a holistic review into the management and operation of digital broadcast spectrum consistent with the review conducted by Ofcom in the UK to ensure this spectrum is managed with optimal efficiency. In the UK such an approach has increased the capacity of the spectrum 2.6 times. If the networks were to use their spectrum efficiently in Australia they would have sufficient spectrum to provide their SD and HD channels as well as new services such as 3D. 8. Move to a rational pricing structure for broadcast spectrum 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. ABOUT FOXTEL FOXTEL is Australia's leading subscription television provider and is connected to over 1.63 million subscribing households 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 200 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 200 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 2005. 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 launched FOXTEL Next Generation in November 2009 which provides customers with: the increased choice of 30 new channels; new navigation features such as iSuggest – which enhances navigation with 200 fresh movie and program suggestions for iQ recording every week – and Record Me – which allows you to record shows directly from an on‐air program promotion; the most comprehensive HD offering in Australia with 15 HD channels; and Sky News Local which provides a dedicated local news service for each major Australian capital city. In 2010 FOXTEL announced a ground breaking partnership with Microsoft to offer around 30 FOXTEL channels over the internet direct to our customers’ television sets via Microsoft’s Xbox LIVE product. FOXTEL and Microsoft aim to launch the new service towards the end of the calendar year. FOXTEL will offer FOXTEL by Xbox LIVE with various packaging and prices and under flexible agreements. FOXTEL will also launch in late 2010 FOXTEL services over the internet direct to FOXTEL customers’ television sets via around 780,000 deployed internet enabled iQ boxes. This new service will be launched towards the end of this calendar year. The service will offer customers even more choice and control over their television viewing, liberating a video store of choice with hundreds of On Demand movies and television programs. FOXTEL was the first Australian broadcaster to broadcast in 3D in conjunction with FOX SPORTS when the Socceroos played New Zealand on 24 May, 2010. In addition, FOXTEL will be the first broadcaster to offer Australians a dedicated 3D channel – FOXTEL 3D – on air from November 2010. Also from November, FOXTEL’s comprehensive HD offering expands to 20 HD channels, including FOXTEL 3D. FOXTEL directly employs around 2100 people and a further 1700 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%). POLICY CONTEXT 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. Over a long period broadcast spectrum, which is a critical public asset, has been poorly managed, meaning: less investment, innovation and jobs as well as stopping Australians from enjoying new channels and products produced from robust competition. Large amounts of spectrum have been locked‐away to protect the broadcasters – undermining Australia’s productivity and GDP. Because FOXTEL pays a market rate for spectrum it is motivated to optimise its bandwidth to support growing customer demand for new services including channels, products and HD and 3D broadcast.