sou · GKB325d2 · 1997-01-01 00:00:00 — On the 8th of 1995, the Swedish Government decided to appoint a Commission to investigate the possibilities of digitising the network for terrestrial broadcasting in (Appendix 1). The Com- missions terms of reference were to present a basis for making a de- cision on the transition to digital technology for broadcasting terrest- rial TV. On this basis I was appointed to carry out the work of the Com- mission. In the work of the Commission there have been representatives participating from inter alia the following organisations – Expert group for studies on (), , and , , , , and . In accordance with this task, I submitted on November 13th 1995 to the Minister of Culture, and Head of the Ministry an interim report. I now submit the report (SOU 1996:25) From Massmedia to Multimedia – Digitalisation of . My task is thereby completed. The general debate over television in has largely concerned what is being broadcast and what should be broadcast. It has focused on rules governing the content of violence, sex and pornography in broadcasting. It has also focused on individual programmes that entertain, provoke and stimulate debate. The debate has also been about whether to have commercials or not on TV. Public debate over television has in addition focused on the per- formance of those who are currently broadcasting and the criteria for determining new entrants to this area. The favourable position of SVT, a new channel – TV4 – with the same number of viewers and broadly equivalent to the public service channels, , Nethold and the other players. To-day the issues focus on how TV programmes should be broad- cast. a terrestrial network, via satellite, or by cable? Answers to these questions also affect the answers to the questions concerning what should be broadcast and who should be able to broadcast. Above all, this debate concerns the power of the general public, the consumer and the individual viewer, and the extent to which they can independently choose from a much large number of programmes. In the digital scenario of the future, it will not be the programming schedules that determine mass viewing behaviour. The individual through interactive services has the opportunity of deciding when to look at a specific programme and perhaps also even choose the viewing angle. However, the question of how programmes should be broadcast is bigger than the TV media and the TV market. The new digital broad- casting systems bring to the very forefront the debate on the wider issues concerning the information and multimedia society. The devel- opment of the digital network for TV broadcasting can be regarded as a step on the road towards an expansion of the electronic super- highway. The Task of the Commission My task is to provide a basis for decisions on a possible to the use of digital technology for the terrestrial broadcasting of TV as a substi- tute for the analogue broadcasting systems currently being used. Nearly all Swedish households will be able to receive programmes via terrestrial broadcasting. This report looks at alternatives to the cur- rent situation, where terrestrial broadcasting is limited to a smaller number of analogue channels, while other channels are broadcast via satellite and cable. Other possible trends will also be described. My task has been to describe technical and frequency preconditions, the opportunities for broadcasting local and regional TV, estimate costs for society, the general public and companies in the TV area, draw up time perspectives for the transition to the new technology, as well as provide proposals to the Government for decisions on these issues. In addition, issues concerning industrial-commercial policy consequences and processes will be dealt with. The degree of uncertainty in the assessments will be made explicit. – History and Present Situation The history of Swedish television in terms of events: The 1950s TV broadcasting starts. The 1960s: TVs are in many Swedish homes. Two TV channels. The 1970s: Colour TV and regional broadcasting. The 1980s: Cable and satellite broadcasting. A third terrestrial TV channel. To-day nearly all Swedish households are able to receive broadcasts from the publicly owned terrestrial network directly or via cable TV. In there are three national channels broadcasting via the terrestrial network, SVT1, SVT2 and TV4. Programmes are broad- cast on both a national and regional basis. Government licensing to use the network is subject to certain de- mands on the programmes, geographical range, regional and local production, measures concerning stand-by for national emergency situations etc. These so called public service requirements apply in the first instance to SVT channels, but also to some extent to TV4. Approximately 100 satellite channels can be received in . Eleven of these aim specifically at Swedish viewers. Around 600,000 Swedish households have satellite dishes for the direct reception of satellite broadcasting, however, most broadcasting is distributed to households via the cable network. A licence is not required for broadcasting programmes via satellite, and thus no demands are imposed on programme content in addition to those arising from EU quotas and regulations on advertising. than half of all TV households are connected to the cable TV network where capacity is normally between 30–40 channels. Terrest- rial and satellite broadcasting may also be transmitted via cable in the last loop to households. 1.4 million households receive TV1, TV2 and TV4 direct from the terrestrial network, while 2,2 million households receive these via cable. TV broadcasting via cable does not require a licence. According to the must carry principle, the cable TV companies are obliged to carry the terrestrial channels without additional payment . Approximately 3.4 million households pay a TV licence, which is used to finance public service companies. At present SVT is also allowed to finance programmes through sponsoring. TV4 is financed mainly through commercials and sponsoring. Satellite channels are financed through commercials, subscriptions and/or charges for programmes. On an average day around four out of five Swedes will look at TV. Viewers spend around two hours per day watching TV. The con- sumption of TV has not increased significantly despite a substantial increase in the supply of programmes. Half the population watch TV4, i.e. slightly more than the number looking at the public service channels SVT1 and SVT2. cial channels TV3 and Channel Five have substantially lower viewing figures, whilst the other TV channels cater for around approximately of all viewers. Public surveys on TV viewing lead me to the following reflections. Public service TV has great value for the general public, and will continue to do so even after the total supply of programmes increases significantly as a result of new channels In addition when Swedes have greater access to foreign TV channels, there will still be a large demand for Swedish produced TV programmes on domestic, especially the public service channels. A review of TV broadcasting developments in neighbouring coun- tries, in other leading European countries as well as in and , shows that digital TV (see below) is making rapid progress. In my Commission I have been principally interested in the development of digital terrestrial TV broadcasting, an issue which many other countries are currently dealing with. TV programmes can either be sent in analogue or digital form. To- day almost without exception, all TV is sent via analogue technology. Regular digital broadcasting has started and digital terrestrial broad- casting on a test basis was carried out in for the first time in . Before TV sets with digital reception become available in the stores, viewers will need an additional device on their TV receivers, a set-top box to be able to receive digital broadcasts. The most important characteristics of digital TV distribution techno- logy: –Large transfer capacity i.e. many channels and additional informa- tion within a given frequency wave band. –Makes possible locally independent reception of terrestrial broad- casting, as well as portable reception within and outdoors with simple or built-in aerials. –Increased capacity to withstand noise, echo, and interference from other radio signals. –Flexibility concerning a varied supply of TV programmes and new types of services, including those with a high degree of interaction. –Encodability for different types of pay TV or for copyright reasons. –Lower energy and distribution costs. Other Usage Areas of Digital TV Distribution The technology of digital distribution makes it possible to send a number of different TV programmes in the same transmission and broadcast a wider supply of quality levels of the same programme. Digital technology can also facilitate interactive TV services such as pay TV, educational programmes, quizzes, information searching etc. This type of technology opens the doors to new types of TV e.g. high definition TV (HDTV), alternative scheduling and time flexible broadcasting, different viewing and contents. Standardisation of Digital TV A prerequisite for complex technical co-operation involving a num- ber of players to function, is that all of these to a certain extent do the same i.e. apply common standards. Standards are also the pre- condition for large volume production as well as low costs for equip- ment that is a part of the system e.g. set-top boxes in TV-households. Decision on international standards for the compression of picture and sound as well as multiplexing was made during 1994. Decision on European standards for broadcasting technology for satellite and cable was made in 1994. Decision on a proposal for a European standard for terrestrial digital TV was made in 1995. Decision on adopting a formal standard is excepted to be made in 1996. In the , a proposal was put forward in 1995 for a standard for terrestrial TV and HDTV. An American standard is expected to be adopted in 1996. Models for Digital Distribution of Television In the Commissions report different models are presented as to how television in digital form could be distributed to the general public. Digital Broadcasting in the A digital terrestrial scenario encompasses a total of six digital net- works covering at least of all households. It is estimated that four networks will provide at least 98 per cent coverage. The net- works can be subdivided into regions and thus make possible local independent reception. Up to 24 nation-wide digital channels can be distributed via these networks. If any of these channels were reserved for regional purposes, the total number of TV channels available would be much greater. If analogue or digital networks in densely populated areas were developed for local broadcasting instead of a nation-wide digital network, the number of nation-wide digital channels would be limited to 15–20 units. If the present analogue network were phased out, an additional 4–6 digital networks could be developed. As a result, there would be a total of 10–12 nation-wide digital networks with scope for a total of some 50 channels as well as scope for local, digital broadcasting. High definition TV could also be broadcast. At present, this would require a network that is totally digital, and the same capacity as four digital channels of normal quality. The capacity required for broadcasting an analogue channel via satellite could be used to broadcast instead around six TV programme Satellite broadcasting provides good coverage at a low cost, but can not be geographically localised. Satellite reception requires an obstacle-free path towards the south. In towns and built-up areas etc. there could be difficulties connected with achieving this. Access to cable networks is thus often a necessary complement. Being entirely reliant on satellites as the only distribution form, or this in combination with cable TV networks, would from the point of view of society be less appropriate for national security reasons. If the coverage of the terrestrial network provides, for example, coverage of all households, the remaining households could be reached by satellite broadcasting. Broadcasting via Cable and Approximately half of all households receive their TV programmes via cable or equivalent. Cable TV networks usually exist in relatively densely populated areas. Digital terrestrial broadcasting will probably reduce the importance of being linked up to cable networks supplied via terrestrial networks. For households connected via cable to also benefit from the in- crease in digitally broadcast programmes, cable companies will have to provide programmes in digital form to the individual subscriber. A cable TV network can easily be equipped for digital broadcasting. A digital channel in a cable network takes up the same frequency space as an analogue channel, and has the capacity to provide 6–8 digital channels of normal technical quality. As regards interactive services, cable distribution has an advantage in that the return channel is located inside the cable TV network. Cable TV networks have to some extent already been prepared for carrying the return signal. Within a few years it will be technically possible to transmit pictures via the network with quality levels ranging from home video to studio quality, depending on transfer capacity in the final link to the subscriber. The technology has until now been regarded by almost all households as too expensive to be used . Transmission of TV programmes via the network to the individual subscriber requires lines suited for high speed digital broadcasting which are also suitable for telephony. This requires inter alia a new generation of exchanges, ATM exchanges that have just started to be used in the network. From a technical point of view, distribution via the net- work can be made specific to the level of the individual. Via the tele- com network it should be possible to provide services through TV. The report also examines future possibilities for distributing TV via copper networks, cellular omnidirectional high frequency trans- mitters and optical fibres. public media policy requires long-term planning concerning technical issues, which means that the Government must decide on which strategy to apply to digital television. Decisions and regulations are dependent on decisions made within the EU. The legislation on the media was not drawn up to take account of the transition to digital broadcasting. Rapid technological develop- ment of multimedia could well lead to the need for completely new legislation. Media legislation and agreements with programme sup- pliers do not take account of the introduction of digital technology or its associated problems. According to the proposed new Radio and TV Act, the Government can, however, make the kind of broadcasting technology used, one of the conditions for granting a licence. The Act on Radio Broadcasting is in principle also applicable to digital technology. Regulations within this area normally require a law since they concern freedom of expression. The Act on Radio Broadcasting etc The Act on does not allow and to take the initiative in implemen- ting digital technology. However, the Act makes it possible to deal with these issues after the technology has been introduced. As a result of digital technology, problems concerning distribution may occur, where the legislation is insufficiently precise and where additional legislation may be needed to solve particular problems, or where a broadcasting licence is issued. When issuing a licence, the Government and The Swedish Radio and Television Authority must thus consider to what extent the licence should be made dependent on specific technical preconditions. The does not contain any procedural regulations for the types of tendering existing internationally within the area of radio broad- casting and which could be of relevance in the future. The lack of international agreements concerning frequency usage for digital TV broadcasting provides an element of uncertainty. Agreements with broadcasting companies do not take account of is- sues concerning digital technology. There is inter alia a lack of clarity concerning the initiative to digitalise, the opportunities for broad- casting companies to provide pay TV services, and the use of altern- ative forms of distribution. Issues concerning digital technology must be dealt with when licences are issued or come up for re-negotiation. Government Influence over Programme Content The extent to which Government influence can be exercised over satellite and cable broadcasting is very limited. Formal requirements on broadcasting and programme content are minimal. There are diffi- culties involved in maintaining existing regulations. Broadcasting moving pictures in the network may fall outside the scope of media legislation and constitutional laws on freedom of expression. Broadcasting via the network is difficult to monitor. Developments in digital technology reduce public influence and control over the supply of moving pictures. Development may result in the need for completely new legislation concerning multimedia. The financial consequences of changing over to digital TV broad- casting have been analysed in three econometric models. The zero alternative where the Government does not invest in digital trans- mission, the second, the main alternative assuming a transition to terrestrial broadcasting, and a third alternative where SVT channels and TV4 are broadcast digitally via satellite and cable. The estimates are based on a number of assumptions on inter alia the behaviour of households, price changes of receiving equipment etc. For this reason, the results are not a forecast, but rather an econometric model to illustrate the financial consequences of different assumptions. In the first instance, the transition to digital TV broadcasting calls for considerable investments in receiving equipment on the part of households. In the zero alternative, these investments are estimated as being billion over the period 1996-2007, i.e. an average of million per year. The transition to digital terrestrial broadcasting increases the need for investment, since all households will need receiving equipment to view SVT channels and TV4 when analogue broadcasting stops after the year 2007. Investments are estimated to approach billion if the set-top boxes are open, and billion if they are closed. In the satellite/cable alternative with analogue broadcasting closed down after 2007, household investments are estimated at between and 10 billion if the set-top boxes are open, and between and 10.8 billion for closed set-top boxes. If the digital terrestrial broadcasting network is fully expanded to 24 digital channels from year 2001 onwards, the transmission costs for the SVT channels and TV4 are estimated at million per year during the period 1997–2007, and million per year when analogue broadcasting has ceased. If terrestrial broadcasting only covers three channels, the transmission costs for each of these channels will be higher, since total costs will not be distributed among as many channels. The transmission costs in this case are estimated at million per year 1996–2007, and thereafter at million per year. In the alternative where SVT channels and TV4 are transmitted via satellite/cable, the costs of satellite transmission are added to the costs of analogue terrestrial transmission. For national security reasons, this presupposes both link and satellite broadcasting to ground-based transmission stations. the period 1997-2007, total transmission costs are estimated to approach million per year. When ana- logue broadcasting is discontinued, the only remaining transmission costs are those for broadcasting via satellite, and these are estimated to amount to million per year. from an Industrial-commercial Policy Perspective Digital TV gives us a taste of what to expect in the multimedia society of the future. Different media, different markets and different players will tend to converge in a multimedia mix. Digital information processing technology requires an advanced infrastructure to be developed, whilst this very infrastructure itself when established provides opportunities for new applications that can be anticipated to-day. The interest in new areas of application is primarily connected to the opportunities that information technology opens up for us as consumers and citizens in terms of access to new services in the home. From a different perspective, information technology may also be described as a breakthrough technology providing new products and services, as well as influencing the production and consumption of existing products and services. In the future, great expectations are connected to information technology from an industrial-commercial perspective. In a number of respects important issues on the technological prerequisites for increasing television broadcasting have crystallised recently. In contrast to the situation a couple of years ago, there are to-day standards for digital TV. Another factor helping to clarify the situation is the progress within the EU on co-operation concerning common approaches to the development of digital TV. As a result, it is now opportune to put forward proposals on issues that earlier were left open by various Commissions on television. The task of my Commission concerns the technological pre- requisites for TV broadcasting. In the course of the Commissions work, it has become evident that this issue in itself transcends the purely technological aspects of television, and that it affects areas other than television. Strategic choices between different broadcasting alternatives are dependent on the answers to the question why the Government should involve itself in this technical area. I regard it as vital to focus on both the media policy and industrial-commercial policy aspects of in- creasing broadcasting opportunities. It should be emphasised that my proposals are intended to chart a route for the strategic decisions to be made by the Government. In this respect the report is thus not a final action plan for the digi- talisation of television in . Considerations over Media Policy The Governments actions on questions concerning radio broadcasting are based on the view that radio, and especially TV, are powerful instruments for exercising influence. The Government has, since tele- vision was first introduced, emphasised the importance of TV media serving the general public and democratic interests. The description of Swedish media policy in my interim report () can be summarised as follows. The conditions for permitting TV broadcasting are based on free- dom of expression and information in its broadest sense. Everyone should be able to receive the programmes broadcast, irrespective of place of . Programmes should give expression to the basic idea of democracy, the principle that all persons are of equal value, as well as the freedom and dignity of the individual. Programmes should be impartial and objective. By means of plurality and quality, TV should meet and satisfy differing needs and interests. Programmes should supply news and comment, provide comprehensive informa- tion, stimulate debate, lead to an exchange of experience and stimulate the imagination. Television should provide a fora for public debate where different views may be expressed in balanced programmes. Television should safeguard the Swedish language and programmes produced by Swedish authors. Persecution of minorities, child porno- graphy, unlawful violence as well as slander (offence against freedom of speech) should all be vigorously resisted and counteracted. the Government also in the future maintain a media policy having these key characteristics?