Digital Television
   

Issue 5: Geographical Coverage

  1. The financial cost associated with the roll out and maintenance of a terrestrial digital platform means that the provision of terrestrial services to all areas of New Zealand is unlikely to be economically attractive. NZ on Air presently funds the maintenance of 148 Television New Zealand installations in remote areas, and also funds coverage extension of TV3 to some smaller areas. Current estimates suggest that, without specific policy intervention, an economically viable terrestrial digital network may eventually cover approximately 75% of the population. The costs of providing coverage beyond this level increase exponentially. This means that a number of rural and provincial areas may not have access to terrestrial digital television services.

  2. The delivery of digital television services via satellite to rural and provincial areas is both economically viable and practical, however. Satellite services are provided through the lease of a satellite transponder, which is generally cheaper and less capital intensive than rolling out and maintaining a comparable network on the ground. However, satellite cannot readily provide some of the commercially attractive services possible through a terrestrial network, such as localised advertising.

  3. In general, the transition from analogue to digital television services can be seen to raise the following key issues for rural and provincial areas:

    • how will rural and provincial areas be able to access digital television services?
    • what services should be available to such areas, and should they extend beyond free to air television to include information, educational and other services not likely to be viable on a commercial basis?
    • what cost will viewers in these areas face in accessing digital television services?
    • over what timeframe should digital television services be introduced for rural and provincial areas?

    Access to Services

  4. The ability of rural and provincial areas to access digital television services is likely to depend on the use of a satellite platform. Unlike the main urban areas, rural and provincial areas are unlikely to have a choice of cable or terrestrial digital services.

  5. As noted previously, there is only one satellite with a suitable footprint over New Zealand. There is currently no reason to believe that access to this satellite will not be available in the future. If it is not, however, digital services for rural and provincial areas may be compromised.

  6. Assuming satellite digital services continue to be available to rural and provincial areas, it can be expected that these areas will have access to the full range of pay tv digital television services that are provided in the main urban areas of New Zealand, as is currently the case. It is not clear, however, whether rural and provincial areas will have access to other non-commercial services and free to air services that are currently available on analogue television. This would require all such services to be broadcast via satellite without encryption.

  7. The Television New Zealand-Sky arrangement for the broadcast of TV One and TV2 demonstrates that commercial arrangements for the broadcast of free to air digital television services are possible, and can result in mutually beneficial outcomes for both parties. Future interactive services are possible under the arrangement, but these would need to use the same middleware and functionality used by Sky for its interactive services.

  8. If significant viewer uptake of satellite reception on a free to air basis occurs, the present role of NZ on Air in subsidising remote area analogue transmission costs would need to be reviewed. Arguably, funding might be re-targeted towards broadening the range of content available on free to air satellite services.

    Cost of Access to Services

  9. Those in rural and provincial areas wishing to access solely unencrypted satellite digital television will need to purchase a set top box and a satellite receiving antenna (dish). Free to air services would then be viewed free of charge. Any pay tv services that viewers choose to subscribe to would incur an ongoing cost, as is currently the case.

  10. The cost incurred by rural and provincial areas in accessing and viewing satellite digital television services will be the same as the cost faced by viewers in the main urban areas. The only cost difference that might arise would be if urban areas had a choice of terrestrial digital services or satellite services. In this case, urban areas may incur a reduced cost by choosing terrestrial over satellite services, as this may not require the purchase of a satellite antenna. The cost would also be reduced if set top boxes for terrestrial television were cheaper that those for satellite television, although it is not clear that this would be the case. The timing and nature of the transfer from analogue to digital television, and the development of new technology in overseas markets, are both likely to influence these costs.

    Timeframe for Introducing Digital Services in Rural Areas

  11. The present rural television translator network is ageing, and it would not be economically attractive to replace it with either analogue or terrestrial digital facilities. Building, maintenance and replacement of this network is a commercial decision for the provider of a large part of this network, BCL, and the broadcasters themselves. If the network does fail through lack of ongoing investment, rural and provincial areas may not have access to television services through any means other than satellite.

  12. Equally, the introduction of digital television services broadcast via satellite means that rural and provincial areas that have not previously been able to receive any television signal are able to do so. These two factors raise a question as to whether there would be benefits associated with simulcasting analogue and digital services in these areas as soon as possible.

  13. In general, it seems that the transfer to satellite digital television services is happening in rural and provincial areas at a reasonable speed by itself. These areas can already access Sky pay tv services and TV One and TV2 free to air services. The broadcast of other free to air services is currently a matter under commercial negotiation.
Geographical Coverage

5.1  Should the Government take steps to ensure that rural and provincial areas are guaranteed access to certain digital services in the future? If so, what services are necessary and what steps should be considered?

5.2  Should the Government take steps to facilitate arrangements for the broadcast of all free to air services on the satellite platform? What approach should be taken for other non-commercial broadcast services and services which are only economic on a terrestrial platform?

5.3  Are rural and provincial areas likely to face greater costs than urban areas in the transition from analogue to digital?

5.4  Are there any considerations that suggest that the transition to digital television services in rural and provincial areas should follow a different timeframe to that for the rest of the country?

5.6  Are there any other issues facing rural and provincial areas in the transition to digital television that should be taken into account in the policy development process?



 
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