Select Committee on Culture, Media and Sport Written Evidence

Memorandum submitted by the Oxford University Programme in Comparative Media Law and Policy


  The Oxford University Programme in Comparative Media Law and Policy (PCMLP) researches changes in media and communications systems through an international network and using comparative methodologies. Its work considers the interplay between changing media systems and human rights debates, democratic values and economic development. The Programme concentrates on three main areas: research and publications, technical assistance and building an international network, and involving students and researchers from around the world in the Programme's activities. PCMLP aims:

    —  To examine the processes of restructuring media and telecommunications structures from various perspectives;

    —  To provide a framework for understanding the background, mechanisms, and prospects of the processes of media restructuring; and

    —  To help provide a new generation of scholars and policymakers with a sharpened comparative insight into the problems of adjustment of technology to society.

  The international dimension is relevant to the subject of digital switchover for four reasons. First, research from other countries experiencing similar transitions can inform us about technical performance, market take-up, and consumer behaviour and satisfaction. Second, the policy dilemmas and trade-offs experienced in other countries may be similar in some cases to our own. If they have been resolved differently, we might ask why and how, and whether a best-practice consensus is emerging. Third, markets (eg for transmission technology and receiver decoders) are trans-national. Fourth and finally, switchover policy-making in the European Union, in certain respects, takes place in conjunction with other member states. We need to be aware of likely trends in other European countries and how these in turn may affect the United Kingdom. All of these rationales for research interlock and intertwine.

  This short paper cannot hope to offer definitive conclusions, especially as developments are still very much in progress, and it does not attempt to provide an exhaustive survey. It tries to portray the big picture. Digital television at present is largely a preoccupation of the advanced economies of the world and the major markets are the United States, Japan and Europe—and, within Europe, the UK, Spain, Germany, Italy and France. The paper aims to draw out some of the implications of comparative policy in this area and to provide a pragmatic overview to assist the Committee in assessing the current UK policy. It has been prepared by Damian Tambini, director of the Programme, and two visiting researchers in this field: Michael Starks (formerly manager of the UK Digital TV Project and currently researching digital switchover with a grant from the British Academy) and Trinidad Garcia (from Complutense University of Madrid, a PhD researcher looking at switchover policy in Spain and the UK).

  One caveat: in a study of this nature, with evidence drawn from many diverse sources, some more recent than others, some translated, there is a small risk that statistics may be produced according to different methods and, of course, even in a few months situations can change.


2.1  Leap to digital HDTV?

  At the outset the digital television agenda in the United States was about high definition television (HDTV). In 1986 Japan put forward its analogue high-definition system, Hi-Vision, as the basis for a global standard. Had this been agreed, it would have placed the Japanese consumer electronics industry, already powerful in an increasingly global market, in pole position for the next generation of technology and products. American companies reacted by lobbying for an American version of terrestrial HDTV. The American TV market consisted of over 100 million homes with over two sets per household: prime territory for marketing a new generation of technology.

  The FCC (Federal Communications Commission) set up an Advisory Committee and, after General Instrument announced a technical breakthrough in 1990, this recommended an all-digital HDTV system. After much testing, the ATSC (Advanced Television Systems Committee) standards for digital terrestrial television in the United States were established.

2.2  Evolution of FCC policy

  The FCC's initial approach to digital terrestrial television was to loan all the existing terrestrial broadcasters an additional frequency (sufficient for an HD transmission), oblige them to simulcast their analogue service in digital HDTV for perhaps 15 years, then shut down all analogue transmission and take back the extra frequency. The "carrot" for terrestrial broadcasters lay in free new spectrum and the absence of any new competition.

  However, while plenty of broadcaster expenditure was envisaged, there was no source of additional revenue: simulcast advertising carried on the HD channel would initially be to tiny audiences. The broadcasters showed strong interest in standard definition digital services as well. By the time the legal foundations for launching digital terrestrial television were laid down in the 1996 Telecommunications Act, HD had become optional. The terrestrial broadcasters would be loaned the extra spectrum but whether they used it for HD was left to their discretion. The simulcast requirement was eased and later removed.

  In return for this commercial flexibility, the broadcasters were required to achieve digital switchover on an accelerated timetable, so that spectrum could be released and auctioned. They were set staggered start-dates between 1999 and 2003 and the FCC's target was to terminate analogue broadcasting by 31 December 2006. [59]

  The broadcasters lobbied for a softer switchover date and found ready allies in Congress. The Balanced Budget Act of 1997 introduced a qualification whereby analogue broadcasts could continue after 2006 if fewer than 85% of households in any given area were equipped to receive digital television (terrestrially, by satellite or by cable).

  Even this plan hit problems. Many broadcasters faced planning or financial hurdles relating to transmission masts and were unable to start digital broadcasting on time. Digital TV receiver sales were slow, as consumers waited for more digital content and lower receiver prices. Shops continued to sell millions of analogue TVs each year. No date for 85% take-up could be confidently forecast.

2.3  Mandating digital TV sets

  The FCC acknowledged that 2006 was no longer credible and gave case-by-case consideration to arguments by broadcasters unable to implement on time, with penalties for undeserving cases. More controversially, it broadened the regulatory framework to encompass the receiver industry. It decided to use powers it had been granted in a different context under the All-Channel Receiver Act of 1962 to mandate the inclusion of digital tuners in new TV sets. [60]The receiver manufacturers challenged this in court. The FCC won.

  The requirement is being phased in and is now due to be complete for all screen sizes by March 2007. [61]One of the side-effects was an increase in the production of "HD-ready" flat screen TV monitors with no tuner at all (but suitable for linking to a digital HD set-top box). However, the policy is beginning to show results and the receiver manufacturers, reconciled to it, have become advocates of fixing a "hard date" for digital switchover.

2.4  Cable and satellite

  Terrestrial transmission is of only modest importance in the United States. Around 60% of homes are on cable (a mixture of digital and analogue) and a further 20% are served by digital satellite.

  In 2003 the FCC endorsed an agreement between the TV set manufacturers and the cable companies on a standardised interface between the digital cable input and a digital TV set, making it possible to "plug and play" one-way digital cable services without the need for a set-top box (though a cable card would be needed for conditional access). [62]This meant that the mandated digital TV sets, each with an ATSC digital terrestrial tuner, were no longer just a product for the small terrestrial TV market but could also be sold as "digital cable-ready" in an open market.

  Cable companies are obliged, under "must carry" rules, to relay the local broadcast services. Satellite operators are not obliged to carry local broadcast services but, if they choose to do so for a particular market (which, in general, is an attractive business proposition), they have to carry all the relevant local services and not just some.

  There has been much debate over how to apply this approach to digital television. Should the "must carry" obligation cover the new digital as well as the analogue broadcast services ("dual carriage")? And if broadcasters transmit several standard definition services, do they all have to be carried ("multi-casting")? The FCC's answer to both questions has been "No".[63]

  Post-switchover the broadcasters want cable companies to be obliged to carry their digital signals throughout their systems. Some analogue cable operators want to be free to "down-convert" the digital signal at the head-end for analogue distribution to continuing analogue TV viewers.

  This issue remains unresolved but allowing this exception to an all-digital world could dramatically reduce the number of American households affected by switchover. The Government Accounting Office estimated in 2005 that about 19% of US households (disproportionately non-white and Hispanic and disproportionately poor) rely wholly on terrestrial television, though switchover would also affect cable and satellite homes with terrestrial second and third TV sets (eg in bedrooms or kitchens)[64].

2.5  Fixing a "hard date"

  Both political and industry pressures have been mounting to jettison the 85% digital penetration threshold and fix a "hard date" for full digital switchover. Congress is interested in the contribution (variously estimated at between $10 billion and $30 billion) which a spectrum auction could make to reduce the federal budget deficit[65]. The 9/11 Commission highlighted the need for increasing the spectrum allocated to "first responders" (fire, police, ambulance services) in an emergency[66]—so taking spectrum away from TV for this purpose commands political support. Through the High Tech Digital Coalition, leading electronics companies have emphasised the suitability of the released spectrum both for public safety use and for wireless broadband.

  Spectrum reallocation has some support among consumer groups who are not opposed outright to switchover but advocate a "consumer-friendly" implementation, with financial protection for those compelled to switch. The terrestrial broadcasters have invited the receiver manufacturing industry to design cheap converter boxes to enable analogue TV sets to keep functioning when they receive only a digital signal. So there is political debate about whether such boxes should be subsidised and, if so, for whom and how. Putting warning labels on analogue receivers in the shops is also under consideration and would probably be accepted by the industry.

  The timing mooted for a "hard date" is 2009 and the issue is currently caught up in the Congressional Budget Reconciliation process.

  A great deal of work remains to be done. The FCC has to finalise the post-switchover frequency plan which will involve significant frequency changes (it has ruled out doing a phased switch-off, region by region, because of the complexity of frequency boundary issues among some 1,700 terrestrial broadcasters). Cable regulatory issues, copyright protection methodology and a debate over broadcasters' future public service obligations all need resolution. Responsibilities and any new cross-industry collaborative arrangements need to be decided: Congress would make the decision about a "hard date" but would not lead implementation. Once responsibilities have been clarified, public communication needs to change gear and the logistics need mapping. The operational implications are not yet in sharp focus. However, a political decision to commit to 2009 would still allow three years for managing the practicalities of implementation.

2.6  The USA and the UK: similarities and differences

  The United States and the United Kingdom were "first movers" in digital terrestrial television and their experiences show several broad similarities:

    —  industry's collaborative process for technical standard-setting,

    —  the policy link between the introduction of digital terrestrial television and the intention to switch-off analogue terrestrial,

    —  the allocation of spectrum to existing terrestrial broadcasters,

    —  the importance of spectrum clearance and reuse as a dominant motive,

    —  early market experience not following policy expectations,

    —  government's ultimate responsibility for setting the switchover timetable,

    —  government standing back from the operational implementation of switchover.

  Specific differences, however, are numerous:

    —  the importance of high-definition in the US (technologically the Americans are making a bigger leap into the future),

    —  the American digital TV set market being driven by improved picture and sound quality, especially for large-screen displays (new digital channels have driven UK set-top boxes sales),

    —  the sheer scale and complexity of the American market (the number of broadcasters, channels, households, TV sets, etc),

    —  the dominant role of cable in the US market (the concept of "digital cable-ready" TV sets, and the importance attached to the "must carry" regulations),

    —  the mandating of digital tuners by the FCC,

    —  the absence of any FCC requirement for digital terrestrial services to simulcast analogue terrestrial output,

    —  the absence of an equivalent to the role of the BBC and the licence fee,

    —  the greater clarity and immediacy of American plans for reusing released spectrum, including a public safety purpose which has public support, and industry pushing for other new developments,

    —  the stronger American budgetary interest in accelerating the switchover timetable and auctioning spectrum,

    —  the relative lack of formal cross-industry stakeholder collaboration in the US after the initial technical standard-setting (ie no equivalent to the UK's Digital TV Group and the Action Plan, leading up to the formation of Digital UK).


  In 1989 NHK, Japan's public broadcaster, launched satellite services including analogue HDTV, financed by a supplementary licence fee. It was Japan's bid to have this HD technology recognised as the basis for a new global standard that triggered the rival digital television initiatives of Europe and the United States. Since the US committed instead to digital high definition, Japan has been rapidly catching up in the new business of digital television.

3.1  The framework for digital television

  Japan has adopted its own set of digital television technical standards, termed ISBD (Integrated Services Digital Broadcasting), with some similarities to European system. ISDB maximises technical compatibility between digital satellite and digital terrestrial television. This, coupled with agreement between free-to-view broadcasters on a common Conditional Access system to restrict copying, makes it possible to manufacture dual platform (satellite and terrestrial) high definition TV sets.

  These technical standards, along with spectrum allocation policy, were also designed to support mobile television via hand-held mini-TVs or mobile telephones. No longer first-to-market in digital television, Japan aspired instead to be the most far-sighted.

3.2  Digital satellite

  Japan's first digital broadcasts started outside of this government-regulated framework. As Sky had done in the UK, multinational commercial companies entered the Japanese market using satellites to offer multi-channel subscription services for reception either via their own proprietary set-top boxes or via cable. One of these, Sky PerfecTV, has built up over 3 million digital satellite subscribers.

  Government-regulated digital satellite television began in 2000, based on Japan's allocated direct-to-home satellite slots. [67]NHK is licensed to provide three satellite channels: two simulcasts of its analogue satellite services and the third wholly HD. Licences also went to two pay TV operations and five advertising-financed services provided by sister companies of the main terrestrial commercial broadcasters. An open market in digital satellite receivers developed, with tuners either built into, or sold to accompany, large flat-screen TVs.

  However, by the time these government-licensed digital satellite services were launched, NHK had built up over 10 million supplementary licence fee-paying households on analogue satellite. It could not alienate this constituency of "legacy" households by compelling them to transfer to digital satellite without plenty of notice. The plan is to stop high definition programming on analogue satellite in 2007 and to end standard definition analogue satellite services in 2011. [68]

3.3  Committing to full digital switchover

  Through no coincidence 2011 is also the year in which analogue terrestrial television is due to end. The Japanese government boldly announced the analogue terrestrial switch-off date before digital terrestrial television in Japan was even launched. Indeed, for licensing reasons a precise date has been set: Japan is to switch fully to digital TV on 24 July 2011.

  The government motives, here as in other countries, are to remain abreast of changing television and telecommunications technology and to seize the opportunity to release, and re-use, scarce spectrum. In this high-technology economy, spectrum is under increasingly heavy demand and vacated analogue TV frequencies are likely to be used for digital radio and for telecommunications, including mobile communications.

  The challenge of accomplishing digital switchover by this date is formidable. Japan is a densely populated country, with some 48 million TV households possessing over 100 million TV sets and a high level of communal reception. Cable and master-antenna relay systems account for around 50% of households. The cable companies are mostly small and local—there are over 600—and many lack the capital to switch to digital. The government is encouraging them to work to the 2011 timetable but has not required them to do so by law.

  Perhaps the greatest challenge comes from Japan's mountainous topography. In total Japan has around 15,000 transmitting devices mounted on around 8,000 transmission masts (compared to the UK's 1,100 masts). Spectrum is intensively used and, whereas in the UK it has been possible to find new frequencies for digital terrestrial television in between the frequencies used for analogue, this is impractical in Japan.

  Accordingly, the Japanese government decided to spend 180 billion yen (about £900 million) reorganising the analogue terrestrial frequencies in order to make space for digital terrestrial transmissions. [69]This is a complex technical project, and over 4 million homes need to be visited for TV retuning. The advantage of the scheme is that digital terrestrial services can be launched on their correct long-term frequencies, avoiding the complex four-year region-by-region digital frequency changes which switchover will involve in the UK.

3.4  Digital terrestrial services and receivers

  The Japanese government awarded digital terrestrial licences to NHK and to the current terrestrial commercial broadcasters (of whom there are around 170), who are expected to make large investments in digital production and transmission infrastructure. 85% of their output has to be a simulcast of their analogue terrestrial services and 50% has to be in high definition. The latter has the effect of requiring so much spectrum that, ahead of switchover, no new broadcasters can enter the market (a point which has perhaps helped soften the costs of switchover to the broadcasters).

  New data-cast services will be launched and a segment within the spectrum allocated to each broadcaster has been set aside for transmission to hand-held mobile receivers from 2006. Initially the content for mobiles will simply be the main terrestrial output but special programming specifically designed for mobile reception may be permitted subsequently.

  Digital terrestrial transmissions to the Tokyo, Osaka and Nagoya regions—the main centres of high population—began in 2003. The extension of digital terrestrial television to the rest of the country is planned for 2006, only five years ahead of the switchover deadline.

  Because the consumer proposition is based on high definition, mainly free-to-view, services, reception is designed to be on new integrated high definition digital TV sets. These are normally flat-screen (as distinct from cathode-ray tube) and can receive both digital satellite and digital terrestrial services (assuming the appropriate aerial). They were initially introduced at the top end of the market, with large screen sizes and prices in excess of £1,000. There is as yet no substantial set-top box market aimed at converting analogue TVs, although stand-alone tuners are sold to work with HD-ready TV monitors or with analogue HD sets.

  Digital TVs are still regarded as expensive and analogue sales continue to dominate the market, outselling digital receivers in 2004 in a ratio of 3:1. However, for 2005 the ratio is closer to 2:1, so the market is changing. [70]For digital TVs to start outselling analogue sets on a major scale, digital tuners will need to be included in small screen-size models.

3.5  Collaborative Action Planning

  In 2001 the government and the terrestrial broadcasters formed the National Council for the Promotion of Terrestrial Digital Broadcasting. It has produced a "road-map" giving dates and target coverage figures for the roll-out of digital terrestrial transmissions.

  In 2003 it convened a wider body, called the National Conference for the Promotion of Terrestrial Digital Broadcasting, which also included the receiver manufacturers, the cable companies, local government bodies and other stakeholders. It issues annual Action Plans. The goal for 2011 is the conversion to digital terrestrial (or to wired relays of digital terrestrial) of 48 million homes and 100 million receivers, and key milestones have been set for take-up by 2006 (football World Cup in Germany) and by 2008 (Beijing Olympics). [71]

  The Action Plans also cover activities carried out by a non-profit organisation formed by the broadcasters and receiver manufacturers to undertake promotion. It runs an outsourced Call Centre (financed by a government grant), publishes explanatory leaflets, and administers a system for labelling receivers in the shops, including a yellow warning sticker with the date 2011, for display on analogue TVs. This is a voluntary system, only agreed after much dialogue about the need for a planned phasing-out of analogue TVs and about the obligation to give consumers timely information about potentially obsolescent equipment. [72]

  By the end of September 2005 a cumulative total of over 6 million digital terrestrial-capable receivers and digital cable set-top boxes had been sold, [73]leaving a dauntingly steep graph of projected sales required for 2011 to be workable. On this basis digital household penetration is quoted as around 13%, though the methodology for measuring it is still under review. Publicity about switchover remains relatively low key. Research undertaken in March 2005 showed that, while 66.4% of respondents had heard about switchover as a long-term goal, only 9.2% were aware of the 2011 deadline. [74]

  If there are any unvoiced doubts as to whether 100 million digital receivers will really have been sold by 2011, they may be offset by expectations of significant growth in broadband reception of broadcast TV services. In 2004 the government published a White Paper noting that at the end of 2003 78.2% of Japanese households had a personal computer; 61.7% used always-on Internet connections; and 93.9% had mobile phones, of which 56.5% were Internet compatible. [75]This is the electronic environment to which digital television is now being added. The Japanese government is unlikely to waver in its aim to release broadcasting frequencies for telecommunications.

3.6  Japan and the UK: similarities and differences

  Similarities between Japan and the UK on digital switchover include:

    —  spectrum clearance as a major aim;

    —  the importance of terrestrial TV as a platform;

    —  allocation of digital terrestrial spectrum to existing broadcasters;

    —  simulcasting policy;

    —  the role of a licence fee-funded major public broadcaster; and

    —  the role of industry working collaboratively with government.

  The differences are more numerous:

    —  Japan's switchover date named ahead of digital terrestrial launch;

    —  Japan's major analogue frequency changes at the outset;

    —  the central role of high definition in Japan;

    —  the greater importance in Japan of integrated digital TV sets, predominantly, flatscreen/HD, compared to set-top boxes;

    —  the existence of dual platform receivers in Japan (although note that digital satellite services do not include simulcasts of analogue terrestrial);

    —  Japan's digital terrestrial services planned for mobile reception;

    —  the labelling of analogue TVs with warning stickers in Japanese shops; and

    —  extent of the Japanese government's involvement in leading, and helping to fund, digital switchover (no equivalent of Ofcom).


4.1  The EU and the Pattern of National Diversity

  In the 1980s Europe reacted to Japan's analogue HDTV initiative by developing its own rival analogue satellite system, including high definition, called MAC (Multiplex Analogue Component). Embodied in a European Directive, it proved technically over-ambitious and commercially disastrous. In the UK British Satellite Broadcasting, using MAC, failed, and Sky, using simpler low-cost technology, succeeded.

  In the 1990s European broadcasters and receiver manufacturers reacted against politically-driven high technology strategies and vowed to implement what the market would support. Many European countries, with a history of state or public service dominated broadcasting, had relatively few TV channels. The market was ripe for multi-channel choice which new standard definition digital TV could supply. Unlike the United States and Japan, Europe therefore opted for standard definition digital television. With the highest digital take-up in the world, currently well over 60%, the UK assessed the market correctly. While there is now a growing interest in the UK and elsewhere in Europe in HDTV, no European country's switchover policy is based on it.

  Due to the failure of the MAC Directive and the liberalising trend emerging from Information Society documents such as the Bangemann Report and the Green Paper on Convergence, the EU has favoured a market-driven approach to the digital transition. It endorsed the commercially-based and collectively developed DVB (Digital Video Broadcasting) standards and, by deciding not to be prescriptive in detail, has permitted considerable technical diversity.

  The EU framework has been broadly set by:

    —  the Television Without Frontiers Directive, currently under revision, which regulates the free movement of television broadcasting services in the Union in order to promote the development of a European market in broadcasting and related activities, such as television advertising and the production of audiovisual programmes,

    —  the Electronic Communications Framework Directive with its associated directives[76] and the Radio Spectrum Decision, which regulate transmission facilities (infrastructure and associated services) and radio spectrum,

    —  areas of competition law, including the Merger Control Regulation Antitrust (Articles 81 and 82 EU Treaty), standards for services of general interest (Article 86) and State aid review (Article 87).

  The Communications Review in 1999[77] and the subsequent communication Principles and guidelines for the Community's audiovisual policy in the digital age, [78]crystallised a horizontal and technologically-neutral regulatory approach that was reinforced with the Communication from digital "switchover" to analogue "switch-off".[79] The switchover process was to be guided by a neutral multi-platform approach.

  In May 2005, the European Commission recommended that its members phase out analogue terrestrial broadcasting by 2012, calling for a coordinated approach. [80]It has developed a vision of the Information Society based on converging media services, networks and devices. [81]With an eye on Europe's regional Radiocommunications conference next year, it advocates a common European approach and market mechanisms to manage radio spectrum. [82]

  However, policy decisions and timing issues have been left largely to member states. While national governments are not free individually to mandate digital TV sets, since the market for TV receivers is a European one, in other respects they have considerable latitude. They are not precluded from taking steps to promote a specific technology for transmission of digital television as a means for increasing spectrum efficiency, provided such actions are "proportionate".

  The result has been a very varied set of experiences in different European countries, reflecting different market sizes, the balance between platforms, the pattern of competition, the availability of terrestrial frequencies, the strength of the desire to safeguard public broadcasting and/or to foster broadcasting pluralism, and the degree of focus on re-using released analogue spectrum for other purposes.

  It is not possible to describe the European market in general terms in the way that the United States and Japanese markets can be characterised: national diversity within Europe is too great. Two observations can be made:

    —  western Europe is much further advanced than eastern Europe,

    —  smaller countries and/or countries in which cable and satellite predominate, and terrestrial reception is therefore relatively unimportant are likely to find it easier to switch off analogue at an early date than others. It is probable, for example, that Finland, Sweden, the Netherlands and Germany will complete switchover ahead of the UK.

  Beyond that it is necessary to look in more detail at the individual national experiences and, in the section below, we describe briefly the situation in Europe's four major digital TV markets (apart from the UK): Spain, Germany, Italy and France.

4.2  Four major national markets

4.2.1  Spain: a second chance for DTT

  On 30 November 2005, Spain officially re-launched digital terrestrial television. Its first venture into the field ended with the collapse of the pay-TV service, Quiero, in circumstances not dissimilar to the collapse of ITV Digital in the UK.

  In Spain terrestrial television plays a major role. In a country with 13.7 million households[83], cable and satellite penetration is modest (1.1 million and 2 million subscribers, respectively[84]). A single satellite platform, Digital+, controls the pay-TV market. Even though Telefonica's TV over DSL has made an impact, with 100,000 subscribers by October 2005, a successful digital terrestrial platform is viewed as essential to analogue switch-off.

  Spain was one of the pioneers in launching digital terrestrial services in Europe. Legislation was approved in 1998 and Quiero launched in May 2000. All the existing national and regional broadcasters were given a second free frequency to simulcast in digital and began to do so in April 2002. Two additional national digital terrestrial channels, Net TV and Veo TV were launched in June 2002. The receiver market depended on Quiero's provision of set-top boxes to its subscribers. Switchover was targeted for 2012. But due to financial difficulties, Quiero TV ceased to broadcast in May 2002, leaving Net TV, Veo TV and the simulcasting broadcasters transmitting to a stagnant market[85].

  A period of inaction followed. The new Government has decided to modify the regulatory framework and technical plan and re-launch DTT before the end of 2005, bringing forward analogue switch-off from 2012 to 2010. Free-to-view services, with a key role for the state broadcaster, RTVE, are central to the scheme. RTVE will have a multiplex containing four channels with regional variations and, in due course, another Single Frequency Network multiplex covering the whole of Spain. Previously, its role was minimal: it shared one multiplex with the other national broadcasters and received no additional funding. With its two multiplexes now, it will be expected to cover 80% of the population by the end of 2005, 90% by 2008 and 98% for the proposed switch-off in 2010.

  In addition:

    —  the 17 Spanish regions ("Comunidades Autónomas", Independent Autonomies) have been granted a second multiplex,

    —  Canal+ pay analogue channel is being converted to free-to-view (and renamed Cuatro) and its digital simulcast version will strengthen the free-to-view digital terrestrial offer,

    —  another new analogue terrestrial channel is being created to cover 70% of the population[86] and it too will be simulcast on digital terrestrial, allowing its analogue version to be switched off in 2010.

  The strategy is to drive through switchover spearheaded by a "Freeview"-style digital terrestrial platform. Five multiplexes offering national services will be organised as follows:

    —  RTVE will operate five channels,

    —  the existing analogue commercial broadcasters (Antena 3, Tele 5 and Cuatro) three each,[87]

    —  the existing digital terrestrial operators (Veo TV and Net TV) two each,

    —  the new analogue channel (La Sexta) another two.

  After switchover, each existing analogue national broadcaster will get a whole multiplex.

  At regional and local level public competitions are being organised for the regional and local services. Technical planning takes account of possible mobile and HD development.

  There is now an open market in unsubsidised receivers. The price for a basic set-top box ranges from 79-119 euros upwards, and for iDTVs from 1,200 to 4,900 euros. Major manufacturers report that since last January more than 400,000 receivers have been sold (more than half during the last three months), of which only 5% were iDTVs. The industry forecasts that at least another 300,000 units will be sold during Christmas sales[88] but the receiver market is still in its infancy.

  The switchover process is organised through the State Secretary of the Telecommunications and Information Society linked to the Ministry of Industry, Tourism and Commerce. The CMT (Comisión del Mercado de las Telecomunicaciones; Telecommunications Market Commission) is the independent regulator for telecommunication market and audiovisual services.

  A new Audiovisual Law and a new Public TV Law are expected soon. The latter would limit advertising time on state television. Currently, the maximum of 12 minutes per hour applies to all broadcasters. The Government plans to reduce the minutes at least to eight in RTVE's case, so as to release part of its revenues to the benefit of commercial operators. RTVE's funding is currently under scrutiny and debate. The new law to be passed should re-define its scale, scope, business model and role in the digital world.

  In February a new body called the "Comisión para el Seguimiento de la Transición a la Televisión Digital Terrestre" was set up under the presidency of the State Secretary of Telecommunications, composed of representatives from RTVE, regional channels, commercial television broadcasters, radio stations, electronic manufacturers, installers and wholesalers. The committee aims to foster and develop digital terrestrial as well as to establish and approve a strategy for digital transition. In October the broadcasters also launched an organisation called the "Asociación Pro TDT" to undertake promotion.

  There are no official plans to subsidise digital take-up and/or digital switchover, though all main stakeholders demand subsidies. Nor are there any official plans to mandate digital TV sets or label analogue TVs as obsolescent, despite pressure from manufacturers.

  After a period of relative stagnation following the collapse of Quiero, digital terrestrial television in Spain now has a second chance, strongly linked to switchover. The plans are now mostly laid, though some uncertainties remain; the platform has been relaunched; it remains to be seen what will happen in practice.

  Similarities with the UK are:

    —  pioneer development in digital terrestrial television that suffered from early failure of the pay-TV service, Quiero, which collapsed for similar reasons as ITV Digital;

    —  digital terrestrial simulcasts of analogue services;

    —  switchover dependent on digital terrestrial as well as other platforms;

    —  switch to a new Freeview-style business model for digital terrestrial; and

    —  a fuller role now being given to the public television broadcaster.

  Differences include:

    —  a longer period of policy inaction after Quiero's collapse;

    —  greater management by government in the Spanish case;

    —  no detailed timetable yet for Spanish analogue switchoff;

    —  greater importance in Spain given to regional/local services and regional decentralised broadcasting regulators;

    —  less choice of affordable set-top boxes for Spanish consumers; and

    —  no announcements in Spain of subsidies for vulnerable consumers.

4.2.2  Germany: switchover through low dependence on terrestrial

  The German TV market is dominated by cable: in a country with 36.2 million households, only 2.6 million rely on terrestrial TV, cable penetration is the highest at 20.6 million, followed by satellite at 13 million[89] (satellite has a strong free-to-view character in Germany, as well as offering pay TV options). The number of people directly affected by analogue terrestrial switch-off is therefore relatively small. Digital switchover began in 2002.

  Frequencies for terrestrial broadcasting in Germany are scarce and there was no possibility of having a lengthy period of digital and analogue simulcasting as in the UK. Digital terrestrial is therefore being launched shortly before analogue switchoff and marketed on the basis that analogue transmissions will shortly cease. The switchover process is regional, in "islands" formed by large conurbations, under the regulatory authority of the "Lander" who have responsibility for media regulation.

  It is significant that digital terrestrial has been chosen to facilitate switchover. The alternative would have been to attempt to convert everyone to cable or satellite, with satellite as the non-subscription option. This, however, would have been more disruptive and expensive for consumers, satellite signals in urban environments are subject to high building shadows, and many cable operations take their feed from terrestrial transmissions. Terrestrial is also valued by some consumers for portability and set-top reception, often for second or third sets (and Germany's technical planning takes this into account). The potential of digital terrestrial for mobile reception was also a factor. However, it is unlikely that digital terrestrial coverage will be universal, and some rural areas will rely on the established pattern of free-to-view satellite reception.

  Digital terrestrial was initially launched in Berlin in October 2002. Legislation has been in place since spring 2002 and the sunset date for completing switchover, following a detailed timetable, is 2010.

  Analogue switch off has already happened in several regions[90]:

    —  in 2003, Berlin became the first all-digital metropolis in the world,

    —  other areas, such as North Rhine Westphalia, northern Germany and Bavaria, have followed suit (eg: on 31 August 2005, the terrestrial analogue signal was switched off in Munich, Nuremburg and parts of southern Bavaria following a three month simulcast period),

    —  digital terrestrial services are planned to start in the Halle/Leipzig, Erfurt/Weimar and Rostock/Schwerin areas this December, with the Kassel, Mannheim and Stuttgart areas following during 2006.

  The digital terrestrial offering in Germany depends on the assignments in every "island". The actual number of channels depends on the spectrum available and varies from region to region[91]. For example, in Berlin-Brandenburg, MABB, the regulatory authority, assigned multiplexes to the major public and commercial broadcasters but decided at the same time that a minimum of two multiplexes should be available for other broadcasters and new applicants. In May 2004, up to 20 programmes on five channels could be received in the Cologne/Bonn area and up to 16 on four channels each in Hannover/Braunschweig and Bremen/Unterweser. Following the switch off in Munich, Nuremburg and parts of southern Bavaria, viewers can access 20 television programmes, some of them offering MHP (multi-media home platform) services.

  There is an open market in receivers, with about 20 models available and an average cost of 100 euros[92]. Digital terrestrial pay-TV is a theoretical possibility but limited by the assignment of available spectrum to free-to-view channels. Most receiving equipment sold does not include conditional access.

  The Berlin government body, MABB, coordinated all the terrestrial broadcasters in its region and acted as an enabler for digital terrestrial, bringing together the main stakeholders to develop a joint communications campaign. "Must carry" obligations were imposed on cable.

  MABB also provided two types of subsidy:

    —  on the supply side, to secure their participation in digital terrestrial, commercial broadcasters were given a multiplex and MABB paid approximately 30% of the digital transmission costs for a period of five years,

    —  on the demand side, a scheme for low income households was designed (supporting set-top box rental and purchases during the switchover period).

  The European Commission has recently ruled against the digital terrestrial transmission subsidy to commercial broadcasters in Berlin-Brandenburg. It decided that the aid, worth some four million euros, violates EU Treaty state aid rules (Article 87(1)) because it is liable to distort competition, and should therefore be repaid.

  In the wake of the successful switchover in Berlin, digital terrestrial is now seen as in less need of subsidy and other regions have not offered a Berlin-style scheme for low income households. The public broadcasters have committed to bring digital terrestrial television to 90% of the population, beyond the major conurbations and into more rural areas. It is expected that by the end of the 2005 digital terrestrial will be available to 45 million Germans though only a small fraction will use it.

  Completion of analogue terrestrial switch-off by 2010 in Germany looks very feasible. Germany will almost certainly be the first major European market to complete the process and the primary reason for this is its relatively low dependence on terrestrial reception.

  Similarities with the UK include:

    —  collaborative working between the industry and government;

    —  a leading role for public broadcasters;

    —  a detailed regional switchover timetable; and

    —  an open market in affordable receivers.

  The most striking differences are:

    —  the predominance of cable and satellite in Germany;

    —  the scheme to switch isolated "islands" through short simulcasting periods;

    —  the decision not to provide universal digital terrestrial coverage;

    —  the greater stress laid on indoor and portable digital terrestrial reception;

    —  the controversial (now judged illegal) Berlin subsidy of commercial broadcasters' transmission costs.

4.2.3  Italy: an unusual subsidy policy

  The Italian market is dominated by free-to-view multichannel analogue terrestrial services. There are 11 analogue terrestrial channels, essentially constituting a duopoly in that RAI, the public service broadcaster, and Mediaset, the dominant commercial broadcaster, own three channels each and between them account for approximately 90% of the audience. In a country with 21.5 million households, cable penetration is low (0.2 million) and satellite services, though they dominate the pay market, are limited compared to other countries (2.6 million)[93]. TV over DSL is growing: Fastweb had acquired 138,000 subscribers by March 2004. Overall, however, as in Spain, terrestrial remains the dominant means of television viewing and digital terrestrial is seen as critically important to analogue switch off.

  Though Italian regulators regarded the introduction of digital TV as an opportunity to restructure the terrestrial sector and introduce more competition, the historic RAI-Mediaset duopoly continues. Legislation passed in 2001 was modified, controversially, in 2003: the so-called Gasparri Law overturned an earlier Court ruling that would have forced Mediaset to give up on one of its three analogue terrestrial channels in order to promote pluralism. So Mediaset and RAI retain their hegemony and, at present, digital terrestrial development rests on cooperation between them.

  Mediaset was first to launch in December 2003 with a multiplex of five channels. RAI followed one month later with two national multiplexes. In January 2004 Telecom Italia and TV International launched two channels and in February that year TF1 and HCS (Holland Co-ordinator and Services) reached an agreement to exploit another multiplex. By the end of 2004, five multiplexes were in operation:

    —  two multiplexes from RAI (9-10 channels),

    —  one multiplex from Mediaset (five channels),

    —  one multiplex from Telecom/TV International (two channels),

    —  and one multiplex operated by D-Free (TF1 & HCS).

  The channels carried on each multiplex are decided by the multiplex operators, but to ensure pluralism, 40% of the channels on each multiplex must be provided by a third party (except for RAI's first multiplex). Approximately 25 national channels and 40 local ones, including the simulcast of the existing national terrestrial channels, are available in total, with a mixture of free-to-view and event-based pay-TV services[94]. The business model for digital terrestrial was originally all free-to-view, based on advertising revenue. However, led by Mediaset, the broadcasters decided to challenge Sky Italia in offering premium content and now offer pay-TV content through pre-pay rechargeable cards.

  Italy has had a rapid take-up: by mid-2004, there was a market of approximately 500,000 digital terrestrial set-top boxes (the cheapest ones are around 100 euros[95]). Growth was kick-started by the Italian government's decision to offer subsidies of 70 euros to consumers (provided they have paid their licence fee) whotpurchase set-top boxes capable of providing interactive links to websites with the potential to support e-government development[96]. Such digital terrestrial set-top boxes contain MHP (multi-media home platform) technology. Fastweb boxes can also qualify, but satellite receivers do not. While Sky Italia has complained about this, there is at present no indication that the European Commission will rule against this unique form of subsidy. Few e-government services are yet available and few receivers have a return path but trials are underway.

  RAI and Mediaset have accompanied the subsidised receiver purchase scheme with a strong marketing campaign, demonstrating the close cooperation between the two main broadcasters which underpins the digital terrestrial venture.

  Two other organisations are involved. The "Autorita« per le Garanzie nelle Communicazioni" (Agcom), is an independent regulatory body for converged communications, whose two main tasks assigned by law are to ensure equitable conditions for fair market competition and to protect the fundamental rights of all citizens. "Associazione DGTVi" is the Association for the Development of the Digital Terrestrial TV, composed by RAI, Mediaset, La7 Televisioni, FRT, D-Free and Fondazione Ugo Bordoni, which aims to cooperate with Agcom and the Ministry of Communications in the transition from analogue to digital.

  While Italy initially launched digital terrestrial services to 50% of the population, coverage is now being extended to 70% and the longer term aim is to reach nearly 90% of the population. Satellite might be used to provide coverage to the remaining areas.

  Due to the lack of available spectrum, a long simulcast period is impractical. Switch-off is therefore officially planned for the end of 2006 (a date established by law) and will be organised on a region-by-region basis. A very short transition period is assumed. The local governments of Sardinia and Val d'Aoste have already agreed with the national Ministry of Communications to switch off their analogue signals in 2006. Subsidy may well be involved. The next candidate for analogue switch-off will probably be Friuli-Venezia Giulia. More widely, how much force the 2006 target will have in practice remains to be seen.

  Similarities with the UK include:

    —  the importance of terrestrial television and of the free-to-view market,

    —  the leading role played by the public broadcasters in collaboration with commercial broadcasters in developing and promoting digital terrestrial television,

    —  the plan to switch off analogue region-by-region.

 The differences, however, are considerable:

    —  the earlier (and highly ambitious) switch-off date introduced by law even before digital terrestrial was launched,

    —  the very short simulcast period envisaged,

    —  the lower digital terrestrial coverage target of around 90%, with the possible use of satellite elsewhere,

    —  the direct subsidy to consumers to purchase set-top boxes, eg incorporating MHP, linked to a political commitment to develop TV access to e-government.

4.2.4  France: later terrestrial entry and MPEG4

  The French TV market is characterised by a large variety of pay-TV operators offering multichannel television through cable and satellite: Canal+ offers analogue terrestrial pay-TV; on satellite there are two rival platforms, TPS and Canal Satellite; cable operators include NOOS, FTC and NC Nume«ricable; while Neuf Telecom, Free and France Telecom, among others, provide TV over DSL. Satellite and cable penetration is limited, however. In a country with 23.5 million households, 3.75 million subscribe to cable and 4 million to satellite[97]. As in Spain and Italy, terrestrial remains the dominant means of television viewing and the existing terrestrial broadcasters are major players.

  France has been a relatively late entrant to digital terrestrial TV, following strong initial opposition from commercial broadcasters and lengthy debates about the regulatory framework (put in place in August 2000 but altered in 2004). Digital terrestrial was finally launched in 2005, however, with the goal of analogue switch-off in mind.

  The CSA ("Conseil Supe«rior de L'Audiovisuel") is the regulator which assigns broadcast licences and ART ("Agence de Re«gulation des Te«le«communications") is in charge of digital terrestrial network planning.

  Finding frequencies has not been easy and has involved some analogue frequency changes. Digital transmission obligations are based around providing about 85% coverage from 115 transmitter sites by 2007[98]. How to cover the rest of the country has not yet been decided and a Task Force has been created to propose technical, legal and economic solutions. The analogue switch-off target is 2010 (five years after the launch of digital terrestrial) provided receiver penetration is high enough[99]. In other words, this is not a hard date.

  "Te«le«vision Nume«rique Terrestre" (TNT), the first French digital terrestrial service, was launched on a free-to-view basis on 31 March 2005, branded "La Te«le«vision Nume«rique pour tous", digital television for all. Coverage has grown from 35% of the population in April to 50% during October. A pay-TV launch is expected to follow by, or before, March 2006.

  This represents the outcome of a protracted regulatory process. Back in 2002 the regulator, the CSA, originally considered 70 channels' applications to launch on digital terrestrial. The initial licensed national channels included:

    —  simulcasts by the existing terrestrial broadcasters who were given the right to a channel (public service broadcasters have, by law, priority access to spectrum),

    —  six additional free-to-view channels,

    —  and 14 pay-TV channels.

  However, in October 2004, in the interest of pluralism the Conseil D'Etat revoked six of the channels awarded to Canal+/Lagarde"re: they exceeded the legal limit of six digital terrestrial channels by any single company. The CSA organised a public tender to award these six channels plus two more (initially reserved for the public sector but rejected by the government), and in May 2005 selected eight new programme services (four free-to-view and four pay-TV services).

  The CSA has decided to reserve three channels per area, which can be shared, for local and regional broadcasters. In the Paris region an extra multiplex that will accommodate nine local services will be established. In October 2005 the regulator decided to open a public consultation on local channels in the TNT platform in Ile-de-France, prior to a possible public tender. This will not be complete until early in 2006.

  Digital terrestrial TV in France is following a hybrid free-pay business model. Eighteen free-to-view national channels are currently being offered[100]. Eleven pay-TV national channels[101] will be on the air by March 2006 at the latest. Cable operators (not satellite) are obliged to carry the free-to-view channels in their digital television bundles.

  While all other European digital terrestrial television, including the French free-to-view services, use the well-established MPEG-2 coding system, France has decided to introduce a more advanced compression system, MPEG-4, for its digital terrestrial pay-TV services. Because it is less demanding of spectrum, MPEG-4 is likely to be used in due course for high definition digital terrestrial television, for which France is making planning provision. Canal+ and TPS have already been authorised to transmit in MPEG-4 on their respective multiplexes and Eurosport has also been given permission to begin experimental television transmissions using MPEG-4 in standard definition. MPEG-4 will be mandatory for digital terrestrial pay-TV. MPEG-4 pay TV receivers must be able to handle services from different pay broadcasters.

  The decision to require MPEG-4 for digital terrestrial pay services carries risks, according to a report by consultants Analysys:

    —  lack of MPEG-4 receivers may cause delays in pay-TV launch,

    —  upon launch, receiver prices are likely to be high, potentially limiting take-up,

    —  the use of multiple standards might lead to market confusion with wider consequences for the platform.

  France is also considering mobile television, based on the DVB-H standard. Not only have Groupe Canal+, SFR and Nokia announced a joint DVB-H trial to 500 users but TPS has also announced separately that it will be experimenting with DVB-H. A commercial launch is unlikely before 2006 or 2007.

  Meanwhile growth in MPEG-2 digital terrestrial TV is underway. The first basic set-top boxes, without interactivity, were available to buy in the first quarter of 2005. According to the CSA, reception equipment is now available at prices ranging from 79 euros to 500 euros and it is possible to use adapters marketed in certain other European countries. Three months after its launch, TNT estimated that more than 500,000 receivers had been sold. By October the figure had reached 685,000. TNT quotes digital terrestrial penetration at 8% of covered areas and forecasts sales of 1 million receivers by the end of the year.

  While France has many similarities with the UK in terms of size of market and the importance of terrestrial broadcasting, the most striking differences are:

    —  its pattern of satellite broadcasting, with competing pay platforms,

    —  its relatively late entry into digital terrestrial television,

    —  its decision to adopt two different compression standards for digital terrestrial broadcasting: MPEG2 for free-to-view channels and MPEG4 for pay-TV and HDTV,

    —  the "softness" at this stage of its target analogue switch-off date.


  From the above descriptions and analysis, it is clear that both across the globe and within Europe, several of the features of digital television are specific to individual countries and help explain their different experiences and switchover strategies. Key differences include:

    —  size of market,

    —  extent of analogue multi-channel TV before start of digital,

    —  scope for HDTV versus scope for more standard definition channels,

    —  relative importance of terrestrial in relation to satellite and cable,

    —  strength of satellite and/or cable pay TV,

    —  availability of frequencies for digital terrestrial before analogue switch-off,

    —  role played by public service or state television,

    —  nature and scale of competition among commercial TV companies,

    —  strength of concern about the prevention of copying (greater for HD services),

    —  degree of government interest in interactive services via digital TV,

    —  detail of plans for auctioning and/or re-using released spectrum.

  It is easier to point to differences than to point confidently at common features and principles, which some unexpected development in the future could contradict, but the following observations form a helpful hypothesis at this stage:

    1.  No country has decided to "skip" digital terrestrial completely, even countries where terrestrial reception is least important.

    2.  No country has launched digital terrestrial without also adopting an analogue switch-off goal (implying a compulsory final phase).

    3.  To facilitate analogue switch-off, digital terrestrial spectrum needs to be allocated to existing terrestrial broadcasters (not necessarily exclusively).

    4.  To facilitate analogue switch-off, consumers need to be offered a free-to-view option with receivers available at affordable prices in the open market: in practice this tends to mean digital terrestrial and/or free-to-view digital satellite.

    5.  Digital terrestrial pay TV is commercially risky where satellite and cable pay TV is well-established and/or strong—but hybrid free-pay digital terrestrial can work.

    6.  Analogue switch-off dates which are set politically without regard to consumer take-up of digital TV tend to be postponed.

    7.  Full switchover is generally easier in countries where terrestrial reception is of limited importance and, at least in respect of their main TV set, only a minority of households are affected.

    8.  In countries where terrestrial reception is dominant, high digital penetration achieved during the period of voluntary take-up is important as a pre-condition of switchover, since this reduces the number of households whose main TV set is likely to be analogue at the point of compulsion. Such take-up does not have to be exclusively digital terrestrial but other platforms only contribute if they carry digital versions of the analogue terrestrial services to be withdrawn.

    9.  Coordination between government, regulatory bodies, broadcasters, and TV manufacturers and retailers is important for a number of purposes: from standard-setting at the outset through to the practicalities of implementing switchover.

    10.  Possible re-uses for released spectrum generally include high definition, greater pluralism, and mobile television, but also go wider than broadcasting.

UKSpain GermanyItalyFrance USJapan
TV households (hhs)24.5 million 13.7 million36.2 million 21.5 million23.5 million110 million 48 million
Switchover target date2008-12 201020102006 (start) 2010 subject
to take-up
2009 is under consideration 2011
Importance of terrestrial (analogue/digital) in platform mix HighHighVery Low HighHighLow High
Role of digital terrestrial in switchover strategy Major: full coverage for public services Major: RTVE 98% coverageMinor, though coverage up to 90% Substantial: coverage target c. 90%Substantial:

coverage target c. 85%
Modest: only 19% hhs without cable or satellite Major role with cable (satellite does not simulcast)
Approx % digital terrestrial
hhs (estimate only: current figures not available on standardised basis)
21 %1%5% 13%3%3% (receivers with ATSC tuner) 13% (including cable relays)
Feasibility of achieving target switchover date HighToo soon to sayHigh End date uncertainDate not hard Date not yet hard, but 2009 possibleToo soon to say

  Fuller public domain data about digital penetration by platform and country is available in the Analysys report cited in the Bibliography at the end of this paper and on the Astra website


6.1  Objectives of switchover

  The broad policy aims of clearing spectrum, modernising infrastructure, and improving the services to the consumer are shared across the major countries studied. Uncertainty about the cash value and potential alternative uses of spectrum is natural given rapid technological change, but the common potential broadcasting uses include mobile television, High definition digital terrestrial television, mobile television, and more digital broadcasters and channels, including regional and local developments. Where terrestrial television is a major platform, then increased channel choice may be an important benefit, but where channel choice is already widespread through cable or satellite, HDTV, mobile television and improved quality become more important. Alternative uses outside broadcasting are proposed in the United States, where there is a desire to allocate additional spectrum to the emergency services and perhaps to develop wireless broadband more fully. Options within Europe will depend on agreements with other countries, in the context of the major conference on regional spectrum policy in 2006 and bilaterally as well.

6.2  Public policy intervention

  No country has attempted to achieve an entirely "hands-off" digital switchover process. Collaboration between broadcasters, receiver manufacturers, government and regulators is necessary for (a) technical standard-setting and (b) the practical implementation of the roll out. Government and regulators therefore have been involved in a range of interventions: from cajoling, facilitating industry bodies, formalising standard-setting, licensing new spectrum allocations, and protecting the interests of the consumer. Public policy has to work with the market, but the market will not deliver switchover without a public policy framework.

  Where there is a major national public service broadcaster, it has generally taken a central role in pubic policy for switchover, though this role varies.

  A range of other policy levers exists, including mandating digital tuners in new televisions, voluntary or required labelling of digital sets, and warning notices on analogue TVs for sale. These would naturally be the subject of consultation with industry and, in Europe, any mandatory regulation could have an EU dimension.

  While coverage and take-up criteria apply in judging the timetable, hard dates for switchover are required for both consumer and investor clarity once the prospect is imminent. Region-by-region switchover, if practical, has the potential to reduce risk and assist the logistics.

  Subsidy options can arise either in kick-starting digital television or in completing switchover. EU case law will evolve following the ruling that a Berlin subsidy was illegal.

6.3  Role of digital terrestrial television

  Digital terrestrial has a role in the switchover strategy of all the countries surveyed here. The pattern of launch of a pay-TV service, and its collapse and replacement with a free service, is not unique to the UK—Spain has had a similar experience. The extent of head-on competition with well-established satellite and/or cable subscription services is a relevant factor. No country has opted for an all-pay system of digital terrestrial: the emerging pattern is either fully free-to-view or hybrid free-pay.

  Digital terrestrial's role in switchover varies according to the importance of terrestrial reception and the extent to which the analogue services to be withdrawn are widely available on cable and satellite. Even where terrestrial broadcasting has a minor role, DTT coverage targets are high. Whether full national coverage should be achieved by digital terrestrial or whether free-to-view satellite is appropriate as the only non-subscription option in some areas has been a matter for individual countries to decide and the resulting picture is a varied one.

6.4  Platform monopoly and pluralism

  Fears that switching-off of analogue terrestrial broadcasts might result in a decline in competition and pluralism by gifting dominance or near monopoly to one of the platforms—particularly one partially outside national jurisdiction—have been offset by the consolidation of the positions of incumbent broadcasters, whether on a single or multi-platform basis. As noted here, allocating digital terrestrial spectrum to existing terrestrial broadcasters has been a common feature of switchover policies. The development of digital terrestrial television alongside analogue, with restrictions on spectrum availability, has placed tight limits on the numbers of new entrants. Whether the freeing-up of additional spectrum after analogue switch-off will bring greater pluralism will depend on regulatory priorities and ground-rules at the time the new spectrum is auctioned or allocated.

6.5  Consumer information on receivers

  The purchase by consumers of the right equipment for switchover, based on reliable and relevant advice, is of critical importance. At present digital television receivers are predominantly set-top boxes. However, the market for integrated digital TV sets and its relationship to the growing popularity of flat-screen TVs will also be important as analogue switch-off comes into sharper focus. Because the UK's switchover completion date is so far ahead, relatively speaking, it faces a lengthy period during which other new developments, eg high definition and mobile television, may move beyond the trial stage into implementation, adding complexity to consumer information about pre-switchover receiver options. The range of equipment on which television via broadband can be displayed is also relevant. In the United States explaining the difference between high definition TVs and HD-ready TVs, not to mention digital cable-ready TVs, is part of the communications challenge. Clarity of consumer advice is likely to be of increasing importance here too.

6.6  UK switchover in a comparative setting

  The UK is a major market in which terrestrial reception plays a major role so switchover is not so simple here as, on present evidence, it may prove to be in Germany—or even the United States. However, the UK leads the world in digital take-up—measured across all platforms for the main household TV—and this places it in a strong position to complete the process on the timetable which it has selected. It is in a far more advanced position than the other major countries where terrestrial has a major role—Japan, Spain, Italy and France—and has been prudent in choosing a later completion date.


Analysys Consultants, 2005. Report on the public policy treatment of digital terrestrial television (DTT) in communications markets. Study produced for DG Information Society and Media, European Commission, 25 August.

Brown, Allan and Picard, Robert (eds.), 2004. Digital Terrestrial Television in Europe. Mahwah, NJ: Lawrence Erlbaum Associates.

Bustamante, Enrique (coord.) 2002. Comunicación y Cultura en la Era Digital. Industrias, mercados y diversidad en Espana. Barcelona: Gedisa.

Bustamante, Enrique (coord.) 2003. Hacia un nuevo sistema mundial de comunicación: industrias culturales en la era digital. Barcelona: Gedisa.

Frezza, Gino and Sorice, Michele (eds.) 2004. La TV che non c'e". Scenari dell'innovazione televisiva in Europa en el Mediterraneo. Salerno: Edizioni 10/17.

Galperin, Hernan, 2004. New Television Old Politics. The transition to Digital TV in the United States and Britain. Cambridge: Cambridge University Press.

Gaptel, 2005. Televisión Digital. Madrid:

Perrucci, Antonio and Richeri, Giuseppe (eds.), 2003. Il mercato televisivo italiano nel contesto europeo. Bologna: Il Mulino.

Shulzycki Alexander, 2003. DTT in Europe. Market Overview and Assessment. DigiTAG Exploratory Meeting, European Broadcasting Union, September.

6 December 2005

59   FCC, Fifth Report and Order, April 1997. Back

60   FCC, Second Report and Order, August 2002. Back

61   FCC, Second Report and Order, November 2005. Back

62   FCC press release on easing digital TV transition for consumers, 10 September 2003. Back

63   FCC press release on resolving dual and multicast carriage issues, 10 February 2005. Back

64   General Accounting Office, Digital Broadcast Television Transition: Estimated Cost of Supporting Set-Top Boxes to Help Advance the DTV Transition, (GAO 05-258T, Washington D.C.), 17 February 2005. Back

65   See, for example, evidence from Motorola and from Aloha Partners to the Senate Committee on Commerece, Science and Transportation, 12 July 2005. Back

66   The 9/11 Commission Report, authorised edition W.W. Norton (New York 2004) p 397. Back

67   Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan, Major Aspects of Japan's Broadcasting Policy, December 2002. Back

68   Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan, Third Action Plan for the Promotion of Digital Broadcasting, April 2003. Back

69   Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan, Major Aspects of Japan's Broadcasting Policy, December 2002. Back

70   Japan Electronics and Information Technology Industries Association, November 2005. Back

71   Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan, Third Action Plan for the Promotion of Digital Broadcasting, April 2003. Back

72   Association for the Promotion of Digital Broadcasting, November 2005. Back

73   Japan Electronics and Information Technology Industries Association, November 2005. Back

74   Norio Kumabe, Visiting Professor, Global Information and Telecommunication Studies, Waseda University, Japan, November 2005. Back

75   Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan, Information and Communications in Japan-Building a Ubiquitous Network Society That Spreads Throughout the World, White Paper 2004. Back

76   New regulatory framework for electronic communications. Applies to all transmission infrastructures, irrespective of the types of services carried over them (the so-called "horizontal" approach). Therefore, covers all electronic communications networks, associated facilities and electronic communications services, including those used to carry broadcasting content such as cable television networks, terrestrial broadcasting networks, and satellite broadcasting networks. Regulation of content broadcast over electronic communications networks (eg radio and television programmes or TV bouquets) remains outside the scope of the framework. The new legal framework draws upon the following directives: Framework Directive, Authorisation Directive, Access Directive, Universal Service Directive and Directive on privacy and electronic communications. The framework takes account of the links between transmission and content regulation. These links concentrate on the following areas: authorisation of networks and services, allocation and assignment of radio spectrum; must-carry; access to networks and associated facilities, including access to application program interfaces (API) and electronic programme guides (EPG) for interactive digital television. Back

77   Communication on a new framework for Electronic Communications Services: infrastructure, transmission and access services. The 1999 Communications Review; COM 1999 (539). Back

78   Principles and guidelines for the community's audiovisual policy in the digital age; COM 1999 (657) final. Back

79   Communication on the transition from analogue to digital broadcasting (from digital "witchover" to analogue `switch-off); COM 2003 (541) final. Back

80   Countries will need to coordinate their DTT service roll-out in border regions with their neighbours. DTT and analogue television services will need to be protected against interference while limited frequencies must be shared. Currently, negotiations are underway at the International Telecommunication Union (ITU) with the aim of putting together a frequency plan for an all-digital broadcast environment for Europe, Africa and parts of Asia. The year 2038 has currently been retained as the theoretically final date for analogue switch off. Back

81   Communication i2010-A European information society for growth and jobs; COM (2005) 229 final. Back

82   Three communications have been adopted: A market-based approach to spectrum management in the European Union; COM (2005) 400 final. A forward-looking radio spectrum policy for the European Union: Second Annual Report; COM (2005) 411 final. EU spectrum policy priorities for the digital switchover in the context of the upcoming ITU Regional Radiocommunication Conference 2006 (RRC-06); COM (2005) 461 final. Back

83   End 2003, European Audiovisual Observatory (EAO). Back

84   2004, CMT. Back

85   Quiero's failure can be ascribed to: (a) its relative weakness compared to the other pay-TV platforms (couldn't compete against them because never had a real differentiated offering-14 channels, lack of prime unique content-; and had to face some technical problems with reception); (b) important financial losses (high costs and low margins for premium content-soccer rights-; high network costs; subsidised set-top boxes and monthly fee discounts); (c) and a management strategy emphasising access to Internet through the TV set. Back

86   Once launched, it will have to broadcast to at least 40% by the end of its first year in digital as well as analogue. Back

87   Telecinco will offer a channel devoted to fiction and another to sports, Antena 3 one channel dedicated to children and one service aimed at women, while Cuatro will broadcast a news channel and another dedicated to music. Back

88   Cinco D-«as, "400.000 sintonizadores de TDT se han vendido este an¥o", 15/11/2005. Back

89   February 2005, Analysys. Back

90   DTT map in Back

91   If in Berlin seven multiplexes of four channels each have been assigned, in Bremen/Unterweser between five and seven (four-five channels each), in Hannover five (four channels each) and in Cologne/ Bonn six (four channels each). Back

92   Screen Digest, "Cost of buying into European DTT", August 2004, No 395. Back

93   February 2005, Analysys. Back

94   A detailed offering can be found at Back

95   Recent STB prices comparisons at Back

96   Paolo Romani, deputy minister of communications, has announced that 110 million euros have been included in the 2006 budget in order to help households purchase interactive STBs. Even though, is likely that the amount of the subsidy will decrease from 70 to 50 euros per household. Back

97   February 2005, Analysys. Back

98   At, a report can be found on the 2007 coverage requirements. Back

99   DTT map at Back

100   Details at Back

101 Back

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Prepared 29 March 2006