1. Television services were introduced into New Zealand in the early 1960's with transmitters serving a number of the main centres. These services, and all subsequent services, have used internationally recognised standards based on analogue technology. International standards for digital technology are now available and a number of countries are moving to implement digital services.

2. In this paper, "digital television" refers to the final mode of transmission to the viewer. Much television production and distribution already uses digital technology, but transmission to the home is generally still based on analogue technology. There are, however, some digital services already operating in New Zealand, specifically the satellite service of Sky Network Television Limited ("Sky") and recently introduced cable services in some areas.

3. Digital transmissions, either by satellite or by land, offer a number of advantages over analogue broadcasting. These include better reception quality, increased programme capacity, new features such as programme guides, multi-view, and interactive services, as well as potential convergence with the internet. In the long term, digital technology is likely to be more cost effective for broadcasters than analogue, but in the short to medium term there will be added costs for broadcasters implementing digital transmissions, and also for viewers.

Purpose and Scope of Discussion Paper

4. This paper discusses what actions should be taken by the Government in facilitating the wider introduction of digital services in New Zealand. It is expected that the introduction of free to air digital services will represent the beginning of a transition to fully digital services and the eventual discontinuation of analogue broadcasts, perhaps in the next 10-15 years. All existing receiving apparatus will require either augmentation or replacement once analogue transmissions cease. It is desirable for planning and investment purposes that the role of the Government in facilitating the development of digital television is addressed and clarified in the near future. At this stage, the Government has not developed a firm view on what its role should be.

5. The issues addressed in the paper essentially concern the Government's regulatory interests. The paper is not concerned directly with the Government's ownership interest in Television New Zealand. Nor does it contain a detailed technical discussion of digital television broadcasting, which can be found elsewhere.

6. A discussion of regulatory issues in relation to digital television, however, necessarily involves touching on issues that go further than digital television per se. There are important linkages between digital television and other aspects of the Government's broadcasting policy, for example, its intention to refocus the operation of Television New Zealand. There are also important linkages with the Government's objective to ensure that rural/provincial areas of New Zealand are not denied the benefits of a "digital future". Digital television therefore needs to be viewed in a broad policy context. This is explored further in later sections of the paper.

Key Issues

7. In addressing the role of the Government in facilitating digital television, it is helpful to think of the issues in three broad categories:
   • the availability of digital signals, both geographically and at what time;
   • viewer access to digital content;
   • implications for related policies.

8. The question of the availability of digital signals raises such issues as: whether the Government should mandate or seek to influence the choice of which technology or technologies are used to provide digital services; what radio spectrum should be allocated to make this possible, and how and when such spectrum should be made available; and whether the Government should mandate when present analogue services should cease.

9. The question of viewer access to digital content raises issues such as: whether the Government should require "open access" systems for reception in the home, and for use by broadcasters in providing services; and whether the Government should require or encourage digital television services to be provided to a similar percentage of the population as currently receives analogue services.

10. How these issues are resolved will be influenced by, and have implications for, a number of related policies, including: Television New Zealand's charter; Maori television; non-commercial, regional television broadcasting; and the promotion of local content and special interest programming. The organisational form and objectives of Television New Zealand have already been the subject of Government decisions.

11. They will also be influenced by attitudes towards government regulation generally. On the one hand, digital television could be perceived as a paradigm shift in broadcasting, more fundamental than the introduction of colour television. It might be seen as heralding far reaching changes in industry structure and operation, and viewer behaviour. On the other hand, digital television could be perceived as a technological development, and a change in market conditions which, while clearly important, is best left to the market to manage.

12. More specific questions within the scope of these general issues are set out at the end of each chapter. This paper may not be exhaustive: accordingly interested parties are welcome to submit comments on any other relevant issues in addition to those specifically outlined in the paper.

Next Steps

13. After the closing date for submissions (15 April 2002), the Ministry of Economic Development, in conjunction with other Government departments, will be reporting to Ministers on what decisions, if any, should be taken by the Government. Views expressed in submissions will be reflected and taken into account in this process. It is envisaged that a summary of views will be prepared and published on the Ministry's website.