Digital spectrum/datacasting/streaming

News Limited

May 2000

News Limited maintains that the Government’s datacasting legislation is an attack on Internet access for ordinary Australians. This papers sets out background information on the complex issue of datacasting.

The ABA and The Internet

Video on demand and bitstreaming are fast becoming the future of digital television. Digital Spectrum is a delivery platform for bandwidth like any other with the exception that all Australians currently have the customer equipment for receiving this platform – the television set - sitting in their house.

This was recognised by the Chairman of the US FCC, William Kennard, said in his speech to the National Association of Broadcasters on 20 April last year:

“Broadcasters have a big pipe that everybody needs – and unlike cable companies and phone companies, you don’t have to invest in physical connections into every home. [-] If there’s one thing that’s clear from everything I’ve seen at this terrific show, its that DTV is not just about TV as we know it. Its also about data. Data is the killer ‘app’ (application) of digital TV.”

The streaming or caching of audio and video through a datacasting service over the broadcasting service bands is recognised by the Australian Government as a threat to the incumbent free to air commercial broadcasters which explains the onerous restrictions.

But what about streaming and caching from the Internet that is not over broadcast service bands? The Government is considering how to address this issue. The Minister’s Second Reading speech on the new datacasting legislation proposes a review:

“The moratorium in the BSA on new commercial television services applies to services delivered by any technological means including the Internet. However, there is currently some uncertainty whether services such as streamed audio and video obtainable on the Internet are, legally broadcasting services. This is a generic issue relating to the convergence of broadcasting with other services, and it is therefore proposed to refer the matter to the ABA for their detailed consideration over the next twelve months.” [- Senator Richard Alston, Minister for Communications 10 May 2000 Second Reading Speech on the Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000].

But why have a review as to whether or not to allow streaming over the Internet other than simply to leave open the opportunity to ban it?

All one has to do is consider the Online Content legislation enacted by this Government to recognise what extraordinary measures it will take to exert control over new media.

What is the future of media and expression in this country when everything will be done exclusively at the pleasure of the ABA; a body which is being vested with ever broader powers and is accountable to no one?

This situation is made worse by the fact that the ABA is receiving its riding instructions from a government which is willing to vandalise any new media which might threaten the free to air commercial broadcasting cartel.

Investment Issues

A recent study from National Venture Capital Association and Venture Economics (Standard and Poor’s Teleconference Series 2000) demonstrates that most US venture capital goes to the IT and communications industries.

The Clinton Administration recently proposed to the US Congress that the limit on the issue of temporary visas to skilled workers be removed to address concerns over a shortage of software engineers for its world leading IT sector.

With this long term investment in new technology and human capital the US economy will be able to look forward to a burgeoning Communications sector with one of the strongest skill bases in the world.

Various commentators and journalists have conservatively estimated Australian spectrum to be worth in between $5-10 billion in an open market. This is public property that has been simply given away to the commercial broadcasters whilst in the mobile telephony spectrum service providers have to pay to secure spectrum at a public auction.

To develop the spectrum in a competitive environment with an unrestricted datacasting industry could have meant the creation of thousands of new high skilled IT jobs in Australia instead these jobs, along with potential investment capital, will find a home overseas.

The spectrum has been regulated to accommodate high definition television but the future is not HDTV.

It is the Internet and data streaming which is now driving the development of digital television in the US. FCC Chairman William Kennard attested to this in April 1999 when he described a new world of television which would “empower viewers to reach into their television sets and paint their own landscapes: landscapes of entertainment, information, education and discovery. What made this possible was data and interactivity with data seen as the “killer [application] of digital TV. (- Kennard speech to National Association of Broadcasters, April 20 1999)

Unrestricted and unregulated, video and audio streaming are the future of digital television that are now attracting the greatest degree of market attention and thus, inevitably, investment.

The US led communications sector is working to develop bitstreaming and datacasting as the cutting edge ‘killer’ application of digital spectrum.

Whilst the Australian Government has demonstrated a defensive attitude towards datacasting and the Internet, the US Government is vigorously trying to develop the communications sector.

Regional Services Issues

• The Government’s proposed regulation of datacasting has destroyed the likelihood of a workable business model for reserve spectrum. This will mean losing a one-off opportunity to address the neglect of rural Australia’s struggle to get a good on-line service.
• The datacasting spectrum could be used by low-income consumers in regional Australia to access their entertainment options by caching films over reserve spectrum. With new digital television coming in next year new media players could deliver new content over the spectrum freed up in the change from old analogue TV. All this would be possible if it were not for the Government’s proposed legislation.
• Rural and regional areas are falling behind in infrastructure and viable bandwidth services simply because the lack of population density makes them an unattractive market.
• There is still no satisfactory affordable Internet services over satellite in regional Australia; Internet over the copper network is hopelessly slow, unlike the high speed fibre optic cables available in the cities.
• With no investment, indigenous and community groups are missing out on a unique opportunity for expression.
• If they’re not stopped Alston’s ‘datacasting’ laws will widen the divide between the information rich in the city with their high speed cables and the information poor in the regions with no viable bandwidth options.

Information Rich – TV Poor

The Government’s datacasting legislation is an attack on Internet access for ordinary Australians

Alston’s restrictive definition of datacasting creates a brave new world of information rich and information poor.

The Government’s legislation which regulates digital spectrum stops ordinary Australians from receiving cheap unlimited Internet access - with no more than a TV and a set top box -anywhere in Australia.

Datacasting represented the potential of unlimited delivery of video streaming, text, data and audio over the terrestrial infrastructure being developed for the shift from digital to analogue television.

The difference between wireline Internet delivery and wireless Internet delivery (or datacasting) is that anyone with a TV will be able to receive wireless Internet delivery - datacasting.

The Federal Government has now regulated datacasting with onerous restrictions and may ban unlimited Internet content access over wireless technology.

Programs delivered over datacasting spectrum will cut out after ten minutes, video streaming will be banned if it does not meet with the Government’s arcane rules and requirements, presenters who could introduce and educate the viewer on this new medium will be outlawed.

These restrictions will destroy datacasting’s viability as an unbridled source of information and content.

Industry has expressed concern that there is no real business case that will support a datacasting licence and with good reason. This is an assault on wireless technology; one of the fastest growing industries in the Communications Sector.

Ozemail, Australia’s foremost Internet Service Provider, responded with outrage that the Government was senselessly discriminating against wireless technologies by limiting the use of datacasting.

This discrimination will lead to a retarding of on-line services to rural Australia.

But the real tragedy is just how punitive and regressive this proposed legislation is.

Under the Howard Government’s datacasting regime ordinary Australians who only have a TV and no PC will not be able to receive the same benefits as wealthier Australians who have a PC and wireline Internet access.

Lower income Australians will miss out on cheap unlimited Internet access through their television sets.

The proposed definition of datacasting will legislate against struggling Australians in rural and regional Australia who do not have the privilege of a computer linked to high speed wireline data delivery as enjoyed by their rich counterparts in the city.

This is an attack on the working Australian who does not have the disposable income to buy a computer when he could simply receive the content diversity of the Internet over his television set with a set top box. There are television sets in 99% of Australian homes, so why discriminate against existing equipment?

If you’re rich and you live in the inner city of Sydney with your choice of high speed cable you’ve got options. But the regional Australian who can’t afford a computer will be stuck with not much more than the diversity of programming and content that has been around since the 1950s.

Minister Alston’s definition of datacasting will widen the divide between the information rich and the information poor. He will create the urban PC rich and the regional TV poor.

Datacasting & Streaming – Regional Perspective

The direction of government policy over audio and video streaming and the regulation of datacasting present grave dangers for the future of communications services to the bush. With the convergence of digital technology, digital television spectrum now has unlimited potential for Internet applications. This is a great opportunity for the growth in services - not the curtailing of a dynamic nascent industry.

The Internet industry in our country has strongly advocated the opening up of digital television spectrum for Internet applications.

The Internet Industry Association explicitly pointed out in its submission to the Senate Inquiry into the Television Broadcasting Services (Digital Conversion) Bill 1998 “we (IIA) urge the Committee to recommend that the legislative instruments enabling a final spectrum allocation make express and adequate provision for Internet-related uses.”

Their advice however, appears to have fallen on deaf ears.

Australia is now at a crossroad in addressing the communications problems faced by regional Australia.

There is a widening gap between the information rich in the city and the information poor in the regions. Consider the findings of a recent study by the ABS on Internet access in Australia.

According to the ABS:

• Only 15% of non-metropolitan Australians have Internet access.
• Only 17% of households with incomes below $50,000 have Internet access, 52% of households with incomes of $100,000 or more have Internet access.
• Tasmania has the lowest percentage of Internet access at 18% whilst ACT, whose demographic enjoys a high average income per capita, has the highest percentage of Internet access at 35%.

The study also shows a generational information gap. The ABS reports that 72% of adults aged 18-24 accessed the Internet in 1999 compared to just 6% of adults aged 65 or over.

It is impossible to dismiss these glaring disparities. The answer to addressing these problems surrounding access to the Internet lies in the reserve spectrum yet with its recent datacasting bill the Government has apparently developed a blindspot.

Developments in the U.S. are now demonstrating that audio and video streaming are the future of digital television and the Internet.

Digital Spectrum is a delivery platform for bandwidth with the exception that all Australians currently own the customer equipment for receiving this platform.

This has been recognised by the Chairman of the US Federal Communications Commission, William Kennard, who said in his speech to the National Association of Broadcasters on 20 April last year:

“Broadcasters have a big pipe that everybody needs – and unlike cable companies and phone companies, you don’t have to invest in physical connections into every home. [-] If there’s one thing that’s clear from everything I’ve seen at this terrific show, its that DTV is not just about TV as we know it. It’s also about data. Data is the killer ‘app’ (application) of digital TV.”

The streaming or caching of audio and video through a datacasting service over the broadcasting service bands is recognised by the Australian Government as having the potential to act as a de facto broadcasting service. This explains the onerous restrictions on the datacasting licence sewn into the Datacasting 2000 legislation.

Streaming and caching from the Internet are no doubt proving to be an emerging problem for Senator Alston as he attempts to preserve in practice his 1998 decision to exclude any new entrants to the commercial broadcasting landscape. The Government is considering how to address this issue.

The Minister’s Second Reading speech on the new datacasting legislation proposes a review:

“The moratorium in the BSA on new commercial television services applies to services delivered by any technological means including the Internet. However, there is currently some uncertainty whether services such as streamed audio and video obtainable on the Internet are, legally broadcasting services. This is a generic issue relating to the convergence of broadcasting with other services, and it is therefore proposed to refer the matter to the ABA for their detailed consideration over the next twelve months.” [- Senator Richard Alston, Minister for Communications 10 May 2000 Second Reading Speech on the Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000].

But why have a review as to whether or not to allow streaming over the Internet other than simply to leave open the opportunity to ban it?

The unfortunate oversight in this legislation is that the Broadcast Service Bands present the solution to the egregious statistics born of the ABS study on regional Internet access.

Unrestricted Internet over the Broadcast Service Bands could overcome the divide between the information rich and the information poor. The coverage will be ubiquitous and 99% of Australian homes already have the customer equipment – the television set – albeit with the inclusion of a set top box.

Internet over TV could introduce senior generations to the Internet and the digital world. It could deliver Internet to the majority of regional Australians who at present do not enjoy Internet access.

Data streaming is the growth area of the Internet and it must be protected from regulation and restriction no matter which platform upon which it is delivered.

It is also essential that all audio and video streaming be quarantined from the consideration and the powers of the ABA. If the ABA is to have jurisdiction over streaming it is inevitable that this body will deem the dynamic new media as being de facto broadcasting and will thus shut it down.

In particular, audio and video Internet streaming over the Broadcast Service Bands must be protected from restriction and ABA powers in order that the gap between the information rich and the information poor closes and Internet access flourishes.

Recent developments over the datacasting trials are highly indicative of where the future of the reserve spectrum lies if this legislation is passed.

Fairfax issued a press release stating that it was suspending its Sydney datacasting trials giving the following reasons:

“We are unable to deliver on a commercially viable basis the datacasting of Internet sites, because we are required to censor the Net to conform to the program content rules.

“In an age of technology convergence, there is substantial uncertainty regarding the terms and conditions of the datacasting licenses, which increases the risk of investment in these licenses.

“In addition, the Bill gives the ABA unprecedented authority to drive datacasting programs off the air before the legal merits of a challenge to the program are determined.”

The Senate Inquiry saw a unanimous rejection of the datacasting model that has been put before Parliament with of course, the exception of FACTS and the FTAs. Fairfax is now rejecting the legislation, voting with its feet on the datacasting trials.

The ramifications of this regulatory juggernaut for the Internet Industry as a whole are even worse. The end product of this menacing ABA review of streaming could well be the spilling of the government’s content rules into streaming over any spectrum. This would mean business models will collapse and investment will disappear.

This expansion of content rules could well include streaming over the mobile telephony G3 spectrum. Indeed, it is interesting to consider whether or not the Treasurer’s last budget surplus, delivered on the basis of future returns on G3 auctions, is now in danger as a result of the reckless regulatory brush of the Minister for Communications.

If this legislation is passed, the Internet Industry in Australia will be retarded and the skill-base and investment will move offshore - Australia will wind up a digital backwater.

But worst of all, if the datacasting legislation is passed in the Senate the gap between the information rich in the cities and the information poor in the regions will grow even wider.