Mandate a digital-only date for OTA: McEwen

Canadian Digital Television (CDTV) has fallen by the way side just as debate heats up over the migration of over-the-air (OTA) television to digital. The not-for-profit TV industry organization dedicated to providing expert information on making the transition to high-definition television (HDTV) – with members including broadcasters, hardware manufacturers, content producers and satellite TV and cable distributors – disbanded at the end of the summer, just months before written comments were due in the CRTC’s ongoing review of conventional TV. The CDTV board put the kibosh on the organization because it felt its transitional digital TV work had been completed, and the remaining business and policy regulation questions could be dealt with by the members on their own. One major issue that still must be dealt with on the regulatory front is whether free over-the-air (OTA) networks should be forced to convert their transmitters to digital TV and, if so, whether a firm deadline should be imposed as is the case in the United States and Europe, states former CDTV president Michael McEwen. "It’s very clear that Canada is a long ways behind in terms of OTA digital transmission," says McEwen, who submitted a report to the CRTC that looked at the digital TV policies of the United States, Mexico, Australia, United Kingdom, France and Germany. When McEwen talks about digital TV, he means primarily HD – a key focus of his now-defunct organization – but his comments are applicable to the broader topic of digital television as a whole. "Based on almost a decade of play in this playpen, I think there has to be a policy discussion about the future of OTA broadcasting," he says. "And if it is decided that yes, OTA will continue to be a viable way of getting service to Canadian citizens and viewers, then I think what has to happen is that there has to be a regulated or legislated transition framework, where there are milestones that spell out what has to be completed by when, with an eventual analog shutdown date." "If you look at the six countries that I looked at and even beyond that, they all have a plan with mandated analog shutdown, either through the regulator or a combination of the regulator and the government. For example, Europe is going to be shutting down in a phased-out way beginning in 2008 right through to 2012. The Americans are shutting off in February 2009…I would probably set a shut-off date of 2012 for Canada." The CRTC’s current digital transition policy for conventional television is market-based and imposes no deadlines on Canada’s broadcasters. However, the commission’s regulatory framework issued in November 2003 indicated it would fast-track licences for digital versions of over-the-air analog stations (CCR, Nov. 22/03). The framework also requires TV distributors to carry the digital versions of conventional TV stations along with their analog signal. When 85% of their viewers are capable of receiving digital TV, then distributors can apply to the CRTC for permission to drop analog. McEwen says many broadcasters are dragging their feet because of the cost of upgrading the transmitters across the country needed for OTA delivery of network TV signals. However, the OTA digital conversion discussion McEwen says is necessary has begun to take place in the CRTC’s review of conventional TV. The Canadian Broadcasting Corp., for one, tells the CRTC in that process that it doesn’t have the money to upgrade all of its towers to digital-capable. "The transition to digital/HD television will continue to be extremely costly and lacks a supporting business case," stated the CBC in its September 27 submission to the CRTC. The CBC proposes a hybrid distribution system – using over-the-air infrastructure in major markets where there are more viewers to free TV, but doing away with the transmitters and forcing Canadians in less populated areas to subscribe to either cable or DTH to receive its network TV signals. The CBC has 480 TV transmitters across Canada, with 39 serving 14 core markets that air local TV programming, and the French-language side of the public broadcaster has 182 transmitters across the country, with 13 serving eight core markets. It noted that only 12% of Canadians receive their TV service over-the-air and that conventional viewing represents just 7% of total TV viewing in the country. The CBC though concurs with McEwen that a mandated analog shut-off date should be implemented "in the interests of making the most efficient use of scarce spectrum." The CBC suggests the commission work with Industry Canada to establish an August 31, 2011 mandated shut-off deadline. Rogers Communications Inc. also recommends that the CRTC impose deadlines. "…To keep pace with other jurisdictions, the commission should establish a fixed date in 2010 for the shut-off of analog transmission," Canada’s largest cableco – and over-the-air broadcaster in such markets as Toronto and Vancouver – states in its September 27 submission to the CRTC. Noting the conversion of all its transmitters to HD would cost about $61 million plus $38 million in operating costs over ten years, CanWest MediaWorks Inc. recommends an analog cut-off date of 2011. The broadcaster wants the commission to ask broadcasters for their OTA high-definition roll-out plans at their upcoming licence renewals. "While the commission’s market-driven approach … has been sound, we believe that a mandatory cut-off date for analog OTA transmission following the US will become necessary in order to maintain an orderly marketplace," stated the CanWest submission. "In addition to ensuring competitive parity between broadcasters, this approach will also allow time for broadcasters to plan future capital needs in anticipation of an eventual cut-off date for analog." CHUM Ltd. though tells the CRTC that initially the digital transition should not involve OTA transmission. "Investing hundreds of millions of dollars for a very minimal percentage of the population is not a wise investment for a system that is already suffering from finite resources," stated CHUM president and CEO Jay Switzer in the broadcaster’s submission. "Even if the sector was experiencing healthy profitability, investing in over-the-air transmission would take important resources out of the system with no discernable business purpose, and with no sound public policy justification," the submission signed by Switzer reads. "While there may be an over-the-air business that evolves over time, there is nothing that can be foreseen in the next six-10 years (the next licence term of group licensees). It is clear the vast majority of Canadians are receiving their programming services via BDUs." CTV Inc. also wants the regulator to allow its networks to transition to digital and HD "without the obligation to provide digital over-the-air transmission facilities and to gradually phase out analog transmitters." CTV estimates the capital cost of upgrading its 25 main station transmitters and its 89 rebroadcast transmitters to be more than $200 million, plus another $15 million in annual operating costs, according to CTV senior VP of corporate and public affairs Paul Sparkes. "This level of investment would be required to reach an increasingly small number of Canadians who rely on over-the-air transmission to receive their broadcast signals," he writes. Aboriginal Peoples Television Network (APTN) also voiced concerns about a mandated move to digital, particularly since it is a service that operates 96 over-the-air terrestrial transmitters in Canada’s North in additional to being carried on DTH and cable. "Simply put, APTN cannot afford, on its own, to replace its terrestrial network with digital transmitters," reads the submission from APTN president and CEO Jean LaRose, who pegs the cost of such an upgrade at close to $9 million. But it’s not just the broadcasters themselves who are reticent to consider investing in OTA digital broadcasting technology, McEwen charges. In A Report to the CRTC on Digital Transition Strategies in a Number of Different Countries, he sums up: "Government has, to date, shown no inclination to make any change to its policy of a market-driven approach … To be blunt there seems to be no political will to take the necessary actions to create an effective digital take-up in the over-the-air spectrum for conventional broadcasters." He adds, "Not to make a decision about the digital transition and eventual analog shut off is in fact making a decision that may have irrevocable negative impacts on public policy and the industry and viewers that the current policy, legislation, and regulation supports." THE TRANSITION TO DIGITAL TERRESTRIAL TV IN EUROPE: A SAMPLINGCountryFinal DeadlineEstimated Number of Households AffectedSwitchover ProgressFranceJanuary 1, 20115.5 million58% of France’s population will have access to DTT coverage.Germany20082.5 millionTimeline determined at local state level. Berlin has completed switchover, followed by four other areas.Italy201210.6 millionThe first phase of switch-off in Sardinia and Valle d’Aosta regions was delayed until 2008.NetherlandsNovember 26, 200674,000More than 160,000 households have DTT coverage.Portugal20103.2 millionRe-launch of DTT service planned for 2006.SpainApril, 20107.4 millionRe-launch of DTT service in November 2005; now 80% of the country is covered.SwedenMarch 1, 2008350,000First analog transmitter turned off in September 2005.United Kingdom20125.5 millionBorder area will be first to switch to full digital broadcasting in the second half of 2008.Source: DVB.org, national regulatory authorities, Parks Associates.

Mandate a digital-only date for OTA: McEwen

News | October 24, 2006

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