REPORT

THE PROPOSED SWITCHOVER FROM ANALOGUE BROADCASTING

TO DIGITAL BROADCASTING IN SOUTH AFRICA

DIGITAL BROADCASTING MIGRATION WORKING GROUP Final version - 17 November 2006

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Document Status

The preparation of this report has been facilitated by the Digital Broadcasting Migration Working Group (“WG”), established by the Minister of Communications. The report has been compiled by acknowledged industry experts with the aim of providing recommendations on specific terms of reference set by the Department of Communications. While every effort has been made to ensure accuracy and to provide a consensus view when required, it should not be assumed that all member organisations of the WG support all aspects of the report. The views expressed in the report are those of the industry experts working in the WG and are not necessarily binding on the organisations that the experts represent in the WG.

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TABLE OF CONTENTS Acronyms ........................................................................................................................5 1. INTRODUCTION.....................................................................................................8 2. SCOPE OF DIGITAL BROADCASTING................................................................10

2.1 DEFINING DIGITAL TELEVISION STANDARDS AND DELIVERY PLATFORMS ............................................................................................................11

2.1.1 Digital Terrestrial Television ...................................................................11 2.1.2 Satellite Digital Television ......................................................................11 2.1.3 Digital Cable Television..........................................................................12 2.1.4 Internet Television and IPTV ..................................................................12 2.1.5 Digital Mobile Television.........................................................................14

2.2 DEFINING DIGITAL RADIO STANDARDS AND DELIVERY NETWORKS....14 2.2.1 Digital Terrestrial Radio..........................................................................15 2.2.2 Digital Satellite Radio .............................................................................17 2.2.3 Internet Radio and Mobile Radio ............................................................18

2.3. STANDARDS, FORMATS AND APPLICATIONS RELATED TO DIGITAL BROADCASTING......................................................................................................19

2.3.1 Image Quality and Digital TV Formats....................................................19 2.3.2 Aspect Ratios.........................................................................................21 2.3.3 Interactive Broadcasting and Return Path Channels ..............................21 2.3.4 Electronic Programming Guide (EPG)....................................................23 2.3.5 Set-top Box (STB) ..................................................................................23

2.4 POLICY APPROACH TO TELEVISION AND RADIO ....................................31 2.5 POLICY CONSIDERATIONS IN PLATFORM SELECTION...........................33

3. PUBLIC POLICY OBJECTIVES FOR DIGITAL BROADCASTING SWITCHOVER36 3.1 GLOBALISATION AND NEPAD ....................................................................37 3.2 GLOBAL INFORMATION ECONOMY ...........................................................38 3.3 NATIONAL GOVERNMENT POLICIES .........................................................39 3.4 GOVERNMENT INTERVENTION..................................................................40 3.5 PUBLIC POLICY ADVANTAGES OF DIGITAL BROADCASTING.................41

4. PUBLIC INTEREST ISSUES IN SWITCHOVER FROM ANALOGUE TO DIGITAL BROADCASTING .........................................................................................................44

4.1 PUBLIC TRUSTEE MODEL...........................................................................45 4.2 PUBLIC INTEREST OBLIGATIONS ..............................................................47 4.3 PUBLIC INTEREST IN A DIGITAL BROADCASTING ENVIRONMENT ........49

4.3.1 Fostering Democracy and Democratic Values (Diversity).......................49 4.3.2 Reflection of National Identity, Culture and Character ............................53 4.3.3 Universal Access and Redress...............................................................59 4.3.4 Consumer Protection .............................................................................60 4.3.5 Public Broadcasting ...............................................................................60 4.3.6 Community Broadcasting .......................................................................67 4.3.7 Minimum public interest requirements ....................................................70

4.4 IMPLEMENTATION POLICY CONSIDERATIONS ........................................75 5. IMPACTS OF TRANSITION ON BROADCASTERS AND THE EXISTING LICENSING REGIME....................................................................................................77

5.1 CONTENT DELIVERY AND THE CONTENT VALUE CHAIN........................78 5.1.1 Content Delivery in a Digital Environment ..............................................78 5.1.2 Digital Content Value Chain ...................................................................89

5.3 EVALUATION OF EXISTING POLICY AND LICENSING REGIME ...............92 5.3.1 Policy and Licensing of Digital Terrestrial Television in Europe ..............92 5.3.2 Policy and Licensing of Digital Sound Broadcasting in Europe ............. 103 5.3.3 Existing Digital Broadcasting Satellite Model in South Africa................ 106 5.3.4 New Legislative Framework and Digital Broadcasting Licensing .......... 107

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5.4 APPROACHES TO NEW BROADCASTING SERVICES, ICT ACTIVITY AND BROADCASTING ON NON-TRADITIONAL NETWORKS....................................... 124

5.4.1 New Broadcasting Services ................................................................. 124 5.4.2 ICT Activities within the traditional broadcasting spectrum ................... 126 5.4.3 Broadcasting on non-traditional networks............................................. 128

5.5 IMPACT OF TRANSITION ON EXISTING BROADCASTING SERVICES AND PROTECTION OF RIGHTS .................................................................................... 129

5.5.1 Impact of Transition.............................................................................. 129 5.5.2 Protection of rights in transition ............................................................ 130

6. IMPLEMENTING DIGITAL BROADCASTING IN SOUTH AFRICA ..................... 132 6.1 OPTIONS FOR DIGITAL SWITCHOVER .................................................... 133 6.2 ECONOMIC MODELING OF DIGITAL SWITCHOVER IN SOUTH AFRICA 137

6.2.1 Scenario One ....................................................................................... 138 6.2.2 Scenario Two ....................................................................................... 138 6.2.3 Scenario Three .................................................................................... 138

6.3 LICENSING AND SURRENDER OF ANALOGUE FREQUENCIES............. 139 6.3.1 Digital Radio......................................................................................... 139 6.3.2 Digital Television .................................................................................. 139

6.3 DRIVERS OF CONSUMER ADOPTION...................................................... 148 6.4 CO-ORDINATION OF DIGITAL MIGRATION PROCESSES ....................... 149 6.5 DIGITAL TELEVISION SWITCHOVER PROCESS...................................... 150

6.5.1 Digital Switch-on .................................................................................. 150 6.5.2 Digital Switchover................................................................................. 150 6.5.3 Analogue Switch-off ............................................................................. 151

6.6 DIGITAL DIVIDEND..................................................................................... 151 6.6.1 Where does the Digital Dividend come from?....................................... 151 6.6.2 Digital Broadcasting needs post-2015 .................................................. 153

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Acronyms

3G Third Generation Mobile Technology capable of carrying voice,

data and multimedia

AM Amplitude Modulation; often used to refer to medium wave

broadcasting

API Application Programme Interface

ATSC Advanced Television Systems Committee

BEE Black Economic Empowerment

BFN The Black Filmmakers Network

CA Conditional Access

CAM Conditional Access Module

CODEC Encoder/Decoder

COFDM Coded Orthogonal Frequency Division Multiplex

CSN Community Services Network (TV channel operated by M-Net)

DAB Digital Audio Broadcasting (usually applied to Eureka 147)

DBAB Digital Broadcasting Advisory Body

DMB Digital Multimedia Broadcasting

DR Digital Radio

DRM Digital Radio Mondiale

drm Digital Rights Management

DSB Digital Sound Broadcasting

DTG Digital TV Group

DTH Direct to Home satellite delivery of content

DTT Digital Terrestrial Television

DTV Digital Television

DVB Digital Video Broadcasting

DVB-C Digital Video Broadcasting – Cable

DVB-H Digital Video Broadcasting-Handheld

DVB-S Digital Video Broadcasting – Satellite

DVB-S2 Digital Video Broadcasting – Satellite version 2

DVB-T Digital Video Broadcasting–Terrestrial

DVD Digital Versatile Disk

ECA The Electronic Communications Act, No. 36 of 2006

EDTV Enhanced Definition Television

EPG Electronic Programming Guide

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ETSI European Telecommunications Standards Institute

FCC Federal Communications Commission

FM Frequency Modulation; sound broadcasting system in the VHF-

band

FTA Free-to-air

HD High Definition

HDTV High Definition Television

IBOC In-Band On-Channel

ICASA Independent Communications Authority of South Africa

ICT Information & Communication Technology

IPO The Independent Producers Organisation

IPTV Internet Protocol Television

ISDB-T Integrated Services Digital Broadcasting for Terrestrial

ITU International Telecommunication Union

ITU RRC-06 ITU Regional Radiocommunication Conference for the planning of

digital broadcasting

LSM Living Standards Measure

MAPPP-SETA Media, Advertising, Publishing, Printing And Packaging Sector Education Training Authority

MBMS Multimedia Broadcast/Multicast Service

MediaFlo Media Forward Link Only

MFN Multi-frequency Network

MHP Multimedia Home Platform

MPEG Moving Picture Experts Group

MPEG-2 Compression technology developed by MPEG currently in use for

digital broadcasting

MPEG-4 Improved compression technology developed by MPEG currently

being introduced globally for digital broadcasting

MW Medium Wave

OS Operating System

The PANSALB Act Pan South African Language Board Act, No.59 of 1995

PDA Personal Digital Assistants

PPV Pay-Per-View

PVR Personal Video Recorder

QAM Quadrature Amplitude Modulation

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RCT Return Channel- Terrestrial return path from viewer to broadcaster

in interactive broadcasting

QPSK Quadrature Phase Shift Keying

RDS Radio Data System

RF Radio Frequency

RRC Regional Radiocommunication Conference for the planning of

digital broadcasting services

SABC The South African Broadcasting Corporation

SADIBA The Southern African Digital Broadcasting Association

SATFA South African Table of Frequency Allocations

SDMB Satellite Digital Multimedia Broadcasting

SDTV Standard Definition Television

SFN Single Frequency Network

SMS Subscriber Management Service

STB Set Top Box

SW Short Wave

TBN Trinity Broadcasting Network

TDN The Digital Network Group

TV Television

VHF Very High Frequency; sound and television broadcasting services

in the band 88- 254 MHz

VOD Video on Demand

VOIP Voice Over Internet Protocol

UMTS Universal Mobile Telecommunications System

UHF Ultra High Frequency; broadcasting services in the band 470-3000

MHz

WG Digital Broadcasting Migration Working Group

WARC ITU World Administrative Radio Conference

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1. INTRODUCTION Digital technologies are changing the way services are delivered, leading to a blurring of the boundaries between types of services and the means of delivery, and eroding the traditional distinctions between text, audio and video. This process of change is often referred to as convergence, alluding to the convergence that is taking place between the previously separate sectors of print media, data, telecommunications and broadcasting. The pace of change is not uniform across all sectors. In South Africa, for example, convergence first took place at the level of transactions where digital technology allowed consumers to carry out a number of familiar activities such as banking, buying and selling in new ways. This led to the promulgation of the Electronic Communications and Transaction Act, No. 25 of 2002, to regulate this new way of transacting electronically and create certainty in the market on the use of electronic transactions. The next area where convergence has been active is that of telecommunications, which has grown to be more than just the provision of voice services and value added services to include broadcast content delivery. This convergence between telecommunications and broadcasting led to the promulgation of the Electronic Communications Act (ECA), No. 36 of 2006, and the Independent Communications Authority of South Africa Amendment Act, No. 3 of 2006 (ICASA Amendment Act). However, as mentioned previously the pace of change is not uniform and this convergence between telecommunications and broadcasting is likely to be a protracted affair if left to market forces alone unless specific steps are taken to ensure that the current public, commercial and community terrestrial broadcasting services switchover1 from analogue transmission networks to digital transmission networks, thus opening the doorway to an enhanced and perhaps interactive broadcasting experience for the public. The Minister of Communications (“the Minister”), in her Budget Speech in 19 May 2005, announced the establishment of a Digital Broadcasting Migration Working Group (“WG”) to develop recommendations and contribute towards the development a national strategy for the migration of broadcasting systems from analogue to digital. The Minister indicated that the WG would consist of representatives from the broadcasting industry, Independent Communications Authority of South Africa (ICASA), government, civil society, organised labour and consumer groups. The WG was mandated to assist government in creating a digital agenda that informs broad communication policy in South Africa, as well as key national economic policy that integrates the knowledge economy into the vision of the information society. The first meeting of the WG was held on 26 August, at the Indaba Hotel in Fourways, Johannesburg. This inaugural meeting focused on setting the terms of reference for the WG and organising the WG into working committees. At this plenary meeting four committees were established, namely the:

• Policy Working Committee; • Content Working Committee; • Economic Working Committee; and • Technical Working Committee (the terms of reference of each working committee

are set out in Appendix A).

1 Switchover, for the purposes of this report, is defined as the progressive migration of households from analogue-only reception to digital reception of

broadcasting transmissions.

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Given the differing terms of reference, each committee determined the research and drafting process it would follow in developing its recommendations. In respect of the technical and policy working committees, the broader working committee divided the work among smaller task teams who then provided drafting for discussion and agreement. In respect of the content working committee, a questionnaire was developed and completed by members of the independent production sector, in order to assess the level of production readiness. Both the Independent Producers Organisation (IPO) and the Black Filmmakers Network (BFN) were asked to consult their members on their state of readiness for digital production. The BFN subsequently provided a report and briefing to the committee. Broadcasters were also asked to make a presentation outlining their state of readiness for a digital domain. Presentations to the committee were made by the SABC, M-Net and e.tv. The committee also approached the MAPPP-SETA to provide advice on its training and development activities for a digital domain. Finally, the committee was of the view that a specialised legal expertise was required to make meaningful recommendations on intellectual property issues. Consultants were briefed to advise the committee in relation to various matters arising from the migration of broadcasting services from analogue to a digital. In respect of the work of the economics working committee, the need was identified for an economic modelling exercise in order to determine the economic viability of digital switchover in South Africa. The economics working committee subsequently drew up a task directive and approached the Department of Communications (DoC) for funding in order to engage economic experts to conduct the above study. Consultants were engaged to provide an economic model that would allow for scenario planning taking into account the costs and benefits to government, the consumer, broadcasters and the signal distributors. The scenarios presented in the economics report provide a broad framework for the impact of Digital Terrestrial Television (DTT), based on three alternative timeframes. The model that has been developed by the consultants is appended to this report and should be used to develop further scenarios in managing the digital switchover process on an ongoing basis. The WG would recommend that the Minister not disband the WG immediately after the handing in of the report on digital switchover in South Africa. This would put government, the regulator and even the proposed independent body in a position to access or utilise the collective expertise of the WG in developing a digital switchover strategy and managing the switchover process.

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2. SCOPE OF DIGITAL BROADCASTING The scope of work of the WG was clearly set out by the Minister as being limited to developing recommendations and contributing towards the development of a national strategy for the switchover of broadcasting systems from analogue to digital broadcasting in South Africa. It is clear from this scope that the digital switchover of existing analogue broadcasting networks is not limited to the terrestrial broadcasting platform, as the broader term of “digital broadcasting” is used. This led to the WG attempting to determine what is captured in the scope of the term “digital broadcasting”. The WG decided that Digital broadcasting essentially means the practice of using digital techniques to encode audio and video signals and to transmit digital data rather than analogue waveforms on networks. Coupled with the use of advanced digital compression techniques this will result in more efficient bandwidth usage compared to analogue broadcasting services, allowing a content provider more room to provide broadcasting and electronic communication services, or to provide a higher-quality signal than has previously been available. It was decided by the WG, that in line with implementation globally, digital broadcasting can still be divided into two streams, namely television and radio (audio or sound broadcasting). In practice though, it was admitted that this distinction is difficult to maintain in a digital era as sound-broadcasting services can now be provided by digital television technologies and video can be broadcast using digital radio technologies. The WG, therefore distinguished on the basis of the primary content offering between services and the following definitions were identified. Digital television (DTV) means the use of digital modulation and compression to transmit video, audio and data signals to consumer access devices (or receiver sets), and Digital Sound Broadcasting (DSB) or Digital Radio means the use of digital modulation and compression to transmit audio programmes (music, news, sports, etc.) only. In the future when multimedia content, irrespective of the nature of the content, is distributed on any network and on multiple platforms it is likely that this distinction between television and radio will fade away to be replaced by a distinction between fixed, nomadic and mobile delivery of multimedia content. Broadcast systems were invented on the basis that signals would propagate terrestrially. Although satellite broadcasting systems became a possibility in the 1960’s, terrestrial networks continue to be the primary delivery systems for television and radio broadcasting services. All broadcast systems require significant frequency spectrum which are a finite resource. One of the main benefits of a switchover to digital broadcasting is the freeing up of such valuable frequency spectrum, as well as improving the quality and quantity of broadcasting services. There have been a number of developments over the past twenty years and various technology platforms are capable of providing digital television and radio. Around the world, satellite direct-to-home (DTH) operators have been launched, new digital cable networks have been built and many analogue cable networks upgraded. Recently, traditional telecommunications networks (broadband) and mobile telecommunications networks have begun offering broadcasting content (television and radio programming services) using digital technologies, allowing offering such as Internet Protocol Television (IPTV) and 3G mobile television.

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The implication of these different technologies is that as the switchover from analogue to digital broadcasting takes place, there is no reason why the traditional focus on the terrestrial platform should be maintained. In fact a scenario is possible whereby multiple platforms (cable, broadband, terrestrial or satellite) collectively and individually could provide full digital television or radio services. The WG felt that despite recent moves towards technology neutrality, in legislation such as the ECA, there was still merit in distinguishing for the purposes of this Report between the different technologies by which digital content is delivered to the public or subscribers.

2.1 DEFINING DIGITAL TELEVISION STANDARDS AND DELIVERY PLATFORMS

In line with the traditional policy approach in South Africa, with regards to broadcasting, of distinguishing between delivery on the basis of terrestrial, satellite and cable/broadband the following means of delivery and relevant technologies were identified by the WG.

2.1.1 Digital Terrestrial Television Digital Terrestrial Television (DTT) means the implementation of digital technology to provide a greater number of channels, especially when using Standard Definition Television (SDTV); and/or better quality of picture when using Enhanced Definition Television (EDTV) or High Definition Television (HDTV); and sound when using Dolby Digital2 through a conventional aerial instead of a satellite dish or cable connection. The main technology standards used are Advanced Television Systems Committee (ATSC) standard in North America, Integrated Services Digital Broadcasting (ISDB-T) standard in Japan, Digital Video Broadcasting (DVB-T) in Europe. These and other transmission standards were developed to replace traditional analogue terrestrial broadcasting with a digital broadcasting equivalent.

2.1.2 Satellite Digital Television Satellite Digital Television means the implementation of digital technology to combine large numbers of channels onto available bandwidth via satellite for reception by consumers via satellite dishes. The greater radio frequency bandwidth available to satellite operators usually allows them to outperform DTT operators in terms of the number of channels offered. The costs of satellite dishes have been reduced in the past three years making them affordable to the average consumer.

2 Dolby Digital, also known as AC-3, is a digital audio coding technique that reduces the amount of data needed to produce high quality sound. Dolby

Digital takes advantage of how the human ear processes sound. Dolby Digital is used with digital versatile discs (DVDs), high definition television

(HDTV), and digital cable and satellite transmissions. It has been selected as the audio standard for digital television (DTV) in the United States of

America. The European DVB standard, however, does not use Dolby Digital for audio, but instead uses MPEG standard technology for both the audio

and video signals.

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The technology standard used globally is Digital Video Broadcasting - Satellite (DVB-S), although the other main standards such as ATSC and ISDB have also made provision for satellite direct-to-home broadcasting (DTH) in the standards. Digital satellite television is based on the DVB-S (EN 300 421) standard and has been deployed in South Africa since 1995. Digital satellite television has similar spectrum efficiency advantages to DTT. DVB-S2 (EN 302 307) is the next generation of DVB family standards that is 30% more bandwidth efficient than DVB-S. In addition, digital satellite television has the benefit of providing universal service at a more affordable transmission cost than DTT. DVB-S2 (TR 102 376) is the successor to DVB-S announced in 2005. It offers a 30% efficiency gain achieved through:

• New modes of operation, namely Variable Coding and Modulation (VCM) and Adaptive Coding and Modulation (ACM).

• New error correction code called Low Density Parity Code (LDPC), and • New modulation schemes

DVB-S2 is targeted not only for traditional broadcast, but also for interactive services and professional applications like contribution and distribution for DTV networks.3

2.1.3 Digital Cable Television Cable television (often shortened to cable) means a system of providing television, radio or sound programming and other services to consumers via radio frequency signals transmitted directly to people’s televisions through fixed optical fibres or coaxial cables as opposed to the over-the-air method used in traditional television broadcasting in which a television antenna is required to receive signals. Although prevalent in other parts of the world, cable television was never introduced in South Africa. In North America and Europe analogue cable television is being upgraded to digital. Digital cable television means a type of cable television that delivers more channels than possible with analogue cable by using digital video compression. Digital cable also enables bi-directional (two-way) communication, enabling services such as the ability to purchase pay-per-view (PPV) programming and video on-demand (VoD) services.

2.1.4 Internet Television and IPTV Traditionally, television was only distributed via cable, satellite or terrestrial systems. However, with the increase in Internet connection speeds, advances in technology and decreases in connection costs a new trend has emerged where traditional broadcast television content and “internet only” television content has become accessible on the Internet and traditional telecommunications broadband networks. A clear distinction is being made between Internet Television and Internet Protocol Television (IPTV), which lends itself to regulatory distinctions as well. Internet television is seen, in terms of the internet model, as being similar to the normal consumer internet experience in that the model is open to any rights holder as it is based on the same publishing model that exists on the World Wide Web (Internet), namely that anybody can create a website and publish that on a global basis. In fact, Internet Television operates in the same fashion as it is accessible from any type of computer (or any other consumer device that can access the internet) and connection, it is also not

3 Eutelsat S.A. High Definition TV via Satellite (Paris, France: Eutelsat S.A., 2006)

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tied to a specific household or Set Top Box (STB). In other words, it gives the content publisher the ability to reach consumers anywhere in the world on multiple devices independent of any specific carrier or network operator using streaming technology based on the Moving Pictures Expert Group (MPEG)4 compression standard usually. The content publisher may be from the formal media sector or the informal sector (user generated content). The model can be free-access or restricted access subject to payment. Internet Television is transmitted over the Internet using the Internet Protocol (IP), which sometimes results in it being called Internet Protocol Television (IPTV). However, most advocates of the open model Internet Television approach reserve the term IPTV for another model, namely the model of marketing video and television-type content through secure and protected IP telecom networks.5 IPTV in this context is not television that is broadcast over the internet, but the method of sending information over a secure, private network that is geographically bound. IPTV is generally funded and supported by large telecom providers who intend providing a competitive product for digital cable and satellite broadcasting services. Traditionally, voice and broadband telecommunication networks have been viewed as a way of delivering voice, internet or data type services, however, convergence is leading to broadband networks being seen as a way of delivering a range of data, voice and video services to households. The IPTV service is often provided in conjunction with Video on-demand and may also include Internet services such as Web access and voice-over-internet protocol (VOIP), where it may be called Triple Play and is typically supplied by a broadband operator using the same infrastructure. In businesses, IPTV may be used to deliver television content over corporate local area networks (LANs) and business networks. IPTV STBs are essentially cut down PC's in their own right and are capable of interacting with other devices such as PDA's, mobile phones, and the Internet to provide a truly flexible solution allowing local information to be tailored to specific regions (e.g. weather and news from a local area).6 The nature of internet television being based on a global internet model means that similar to the internet it is not possible to regulate this type of service as it usually operates outside the borders of countries in which it is received. IPTV in contrast, works on the same model as cable and satellite television as it entails the deployment of infrastructure and devices to access it within the borders of a country which are all managed and operated by the broadcasting service and network operator. The fact that the infrastructure deployed is based in regions and in suburbs which are connected to consumer premises (households) makes it possible to subject IPTV to regulation similar to that in place for traditional broadcasting networks. In South Africa, where there is no legacy cable television infrastructure to upgrade to digital, a “greenfields” roll-out of IPTV seems to make more sense than introducing digital cable television. An advantage of IPTV is that it uses Internet protocols to provide two-way communication for interactive television. It is also possible to receive Internet based service notifications for things such as incoming email while watching IPTV. If IPTV is packaged with a digital phone, a caller ID could pop up on screen when the telephone rings. IPTV is already being introduced in international markets, with providers in many countries including Japan, Hong Kong, Italy, France, Spain, Ireland, and the United Kingdom. 4 MPEG is the name of a family of standards used for coding audio-visual information (e.g. movies, video, music) in a digital compressed format. The

major advantage of MPEG compared to other video and audio coding formats is that MPEG files are much smaller for the same quality. The use of

MPEG is not restricted to the Internet it is the preferred compression standard on terrestrial and satellite platforms as well.

5 Good, R. IPTV vs Internet Television – Key Differences. <http://www.masternewmedia.org/2005/06/04/iptv_vs_internet_television_key.htm> (4 June

2006)

6 Ibid.

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2.1.5 Digital Mobile Television Digital Mobile Television is a new television broadcasting service that has become possible due to convergence, where the content is broadcast or streamed not to traditional television sets but to mobile phones or other portable devices. There are three main radio technology families for delivering broadcast content to mobile phones or devices:

• In-band cellular broadcast techniques such as the Multimedia Broadcast/ Multicast Service (MBMS) extension to Universal Mobile Telecommunications System (UMTS);

• Terrestrial digital broadcast networks and their extensions, such as Digital Video Broadcast transmission to Handheld terminals (DVB-H) based on DVB-T standards, Terrestrial Digital Multimedia Broadcasting, based on T-DAB standards (T-DMB), Media Forward Link Only (MediaFLO), a Qualcomm proprietary solution improving DVB-H, and ISDB-T, a Japanese digital television allowing HDTV as well as reception on handsets; and

• Hybrid satellite/terrestrial systems, such as Satellite Digital Multimedia Broadcasting (SDMB) in Korea, MobaHO! in Japan, and the recent DVB-H adapted for S-band and the hybrid operation concept, which Alcatel is proposing to the DVB Forum as an extension of DVB-H.

It is important to note that these technologies all offer varying degrees of mobility and reception performance versus cost of deploying a network for mobile reception.7 The principle of technology neutrality in regulation should prevail and mobile services could be allowed on any of the multitude of mobile digital broadcast platforms available, including T-DAB, DMB, DRM, DRM+ and DVB-H. There is also a potential in South Africa that DVB-H and DVB-T could be used in hierarchical modulation mode, both being broadcast from the same transmitters in a digital broadcasting network. However, such a choice by the broadcasting service and/or electronic communications network service would introduce some limitation in terms of coverage and number of services, as DVB-H requires denser coverage. This would therefore result in DVB-H being confined to only using Quadrature Phase Shift Keying (QPSK) modulation. The decision to use this mode should therefore be left to the commercial decision of broadcasting services operating on a DTT platform.

2.2 DEFINING DIGITAL RADIO STANDARDS AND DELIVERY NETWORKS There are numerous digital terrestrial sound broadcasting standards in operation throughout the world, as well as some new standards that are currently under development. The ITU Regional Radiocommunication Conference (RRC-06) on Digital Broadcasting has adopted the Eureka 147 DAB standard for countries in Africa and Europe. Eureka 147 is able to operate in the frequency ranges 174- 240 MHz (Band III) and 1452-1492 MHz (L-Band). However, globally most of these services have been deployed in Band III.

7 Satellite-evolution.com. “Mobile Television: Stronger Together, Weaker Apart” in Satellite Evolution EMEA March/April 2006, pp. 28-36

<http://www.satellite-evolution.com/portal/_portal.cgi?page=emeaissues2006.htm>

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The sound broadcasting sector, in South Africa, are of the opinion that the existing AM8 and FM9 services do not meet the needs of all South African listeners. The analogue services in the congested spectrum are currently unable to deliver on the published policy objectives to amongst others adequately serve the 11 official national languages provide the expansion of Greenfield station’s service coverage and facilitate the licensing of new services in key markets10. In certain cases, a shortage of spectrum in the Very High Frequency (VHF) - FM band prevents the licensing of new sound broadcasting services, or the expansion of existing broadcasters’ coverage. The introduction of digital sound broadcasting services could remedy this situation. It is argued, that the same reasoning and motivation for the introduction of DTV applies to radio and that the digitisation of radio is critical to ensure its continued relevance in a converged digital environment in the future. It should be noted that Digital Radio, in addition to what is listed below, can also be provided in the form of audio bouquets using any of the standards and platforms identified above for DTV. In the context of DSB, it is once again possible to distinguish between terrestrial, cable/broadband and satellite delivery together with the accompanying technologies or standards.

2.2.1 Digital Terrestrial Radio Digital Terrestrial Radio is more commonly known as digital audio broadcasting, which is used both to identify the generic technology of digital audio broadcasting, and specific technical standards, particularly the Eureka 147 (DAB) standard. The technology used includes Digital Radio Mondiale (DRM) globally in medium wave (MW) and short wave (SW) bands In-Band On-Channel (IBOC) in North America, Integrated Services Digital Broadcasting (ISDB-Tsb) in Japan, and Eureka 147 in Europe, Canada and parts of Asia. The main objective of radio stations converting to digital systems is to enable higher fidelity, greater noise immunity, and new services. However, since FM stereo with good reception provides hi-fi sound, digital radio systems around the world find it difficult to motivate consumer take-up based on improved audio quality alone, its introduction is also hampered by a lack of global agreement on standards. Eureka 147-DAB uses Coded Orthogonal Frequency Division Multiplexing (CODFM) modulation which is also used for the DVB family of standards and is designed to operate in Band III (174 MHz to 240 MHz) and the L-Band (1452 MHz to 1492 MHz). Roll-out of large area coverage of T-DAB services has been largely in Band III. The T-DAB rolled-out in Europe has been predominantly in Band III. The ITU Regional Radiocommunication Conference on Digital Broadcasting 2006 (RRC-06) has recommended the adoption of the Eureka 147 (DAB) standard for countries in Africa and Europe. Mass produced receivers for T-DAB (Eureka 147) are available from more than 15 different suppliers in numerous mobile, portable, car and home forms. Prices have fallen to below $7711, but this is still more than what the lower LSMs (Living Standard Measure) in South Africa can afford.

8 AM broadcasting is broadcasting using amplitude modulation and is also often used to refer to mediumwave broadcasting (MW).

9 FM broadcasting is broadcasting which makes use of frequency modulation.

10 Independent Communications ASA. The Review of Ownership and Control of Broadcasting Services and Existing Commercial Sound Broadcasting

Licences, Position Paper. (Johannesburg: ICASA, 13 January 2004)

11 www.worlddab.org

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In the United States of America (USA) digital radio schemes maintain compatibility with traditional analogue broadcasting schemes based on a 200 kHz channel allocation grid for FM and a 10 kHz channel allocation width for AM, enabling an approach known as IBOC. With IBOC, both analogue and digital signals are sent in the same channel, allowing older analogue radio sets to still receive the signal. There is an increase in noise and the associated degradation to the analogue signal to noise ratio is managed through increasing the power ratio between the analogue carrier and digital signal blocks. This has the benefit of simplifying the problem of frequency allocation in the USA, since the existing radio broadcast frequencies can be used for digital transmissions. Initially, three schemes were being promoted in the USA all based on CODFM modulation, these have now collapsed into one scheme known as High Definition (HD) Radio for digital broadcasting using existing FM and AM stations. As the South African FM radio band plan is based on 100 kHz channels and not 200 kHz, as is the case in the US, it is not possible to introduce HD Radio in South Africa without re-planning the entire South African radio broadcast frequency allocations and retuning every FM transmitter. Accordingly, the WG do not consider this technology to be viable or relevant to the South Africa situation. In addition to the T-DAB technology and HD Radio there is also DRM. Digital Radio Mondiale is an international non-profit consortium focused on designing and implementing an open-source platform for digital radio broadcasting, especially on shortwave. DRM uses COFDM technology and can operate in several modes with varying degrees of spectrum bandwidth requirements, signal robustness and audio quality. One hybrid mode allows both digital signals and analogue signals to be combined and broadcast simultaneously. In this mode the digital audio quality is highly limited and voice based speech codecs are used. With multiple 9 kHz channels combined DRM can deliver FM-like quality stereo services. The main advantage of DRM is that it provides a means of radically improving the audio quality of services using frequencies below 30 MHz. Depending on the mode selected DRM can also transmit other digital data besides digitised music, including text, pictures, and computer programs (data-casting) — as well as RDS-type12 metadata or programme-associated data like DAB does. DRM has been designed especially to use older transmitters designed for audio AM, so major new investments are not required for early adopters. The encoding and decoding can be performed with digital signal processing, so that small computers added to a conventional transmitter and receiver can perform the rather complex encoding and decoding. The WG hold the view that it may benefit South Africa to investigate opportunities for the introduction of broadcasting services using the DRM standard. DRM+ is an extended version of the existing DRM standard, which is being developed to operate in all broadcast bands below 120 MHz; i.e. primarily the VHF-FM Band 87.5-108 MHz. DRM+ is being developed to meet a requirement by certain European and South American broadcasters who need a switchover path to digital broadcasting for both AM and FM systems using a single standard. Given the current utilisation of the FM Band in South Africa, and the demand for additional sound broadcasting services, DRM+ may provide a solution to the problem in future. The standard for DRM+ is expected to be adopted by European Telecommunications Standards Institute (ETSI) in 2007, and the design, development and testing phases are expected to be completed by 2008-2010.

12 Radio Display System (RDS) is a radio broadcast technology for displaying the artist, album, and track title information on FM radio receivers.

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As currently envisaged the standard will require bandwidth within the FM band and will require broadcasting services in the FM band to be switched off before the DRM+ services can be introduced. DRM receivers are not currently available nor mass produced. Japan in contrast to other countries has adopted a different technology that it developed called ISDB as its DTV and DSB format to allow radio and television stations to convert to digital. This standard, which has not been used outside of Japan, would not be recommended by the WG as there do not appear to be worldwide economies of scale developing to reduce the costs of the radio sets based on this standard.

2.2.2 Digital Satellite Radio Digital Satellite Radio can be described as a satellite-based direct-broadcast radio service in which digitally encoded audio entertainment material is broadcast to terrestrial-based receivers, either directly from an orbiting satellite, or in cases in which the receiver is in a shielded location--from the satellite to the receiver via a terrestrial repeater station. Unlike, Digital Terrestrial Radio, Digital Satellite Radio services are commercial business entities, which offer a package of channels as part of their service — requiring a subscription from end users to access its channels. Currently, the main providers are WorldSpace, XM Satellite Radio and Sirius Satellite Radio. Satellite radio uses the 2.3GHz S band in North America, and generally share the 1.4GHz L band with local Digital Audio Broadcast (DAB) stations elsewhere. It is a type of direct broadcast satellite, and is strong enough that it requires no satellite dish to receive. Due to the high orbit of the satellites, two or three are usually sufficient to provide coverage for an entire continent. Local terrestrial repeaters may be required to enable signals to be available if the view of the satellite is blocked, for example, by high rise building in metropolitan areas. XM Satellite Radio and Sirius Satellite Radio dominate the American market with satellites providing coverage for the continental USA. This dominance extends into Canada as both satellite radio providers are partners in two of three satellite radio services which have applied for licences in Canada and been approved by the Canadian Radio-television and Telecommunications Commission (CRTC). Elsewhere in the world, WorldSpace tends to be the main sound broadcasting player and it has its own satellites covering most of Europe, Asia and Africa. Only proprietary WorldSpace receivers can receive the signal and many of the programs are available only to subscribers. Of course all the satellite subscription television broadcasting services also provide an audio bouquet in addition to their television bouquets. The main difference being that they target the household, rather than the car and mobile receiver market primarily addressed by satellite sound broadcasting services. In 1992 the ITU World Administrative Radio Conference (“WARC 92”) allocated the frequency band 1 452 – 1 492 MHz to the broadcasting service and the broadcasting-satellite service. In terms of the provisions of ITU Radio Regulation No 5.345 (“RR 5.345”) the use of the band 1 452-1 492 MHz by the broadcasting-satellite service, and by the broadcasting service, is limited to digital audio broadcasting and is subject to the provisions of Resolution 528 (“Res 528 WARC 92”).The South African Table of Frequency Allocations (SATFA) confirms the allocation of the band 1452 -1492 MHz to digital audio broadcasting and states in the foot note that “This band has been allocated internationally for use for digital broadcasting (S-DAB and T-DAB).” Due to the fact that satellite radio experiences dead spots (satellite shadows) and multipart interference in metropolitan areas in between skyscrapers, the Federal Communications Commission (FCC) adopted rules allowing for the licensing of

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complementary terrestrial repeaters operating in the same frequency band to resolve the problem. The receiver switches automatically from satellite to terrestrial repeater without any interruption in service. The WG suggests that when ICASA licenses satellite sound broadcasting services they must plan and assign terrestrial frequencies for complementary terrestrial repeaters.

2.2.3 Internet Radio and Mobile Radio Internet Radio is a broadcasting service, which is transmitted via the Internet using streaming technology based on any number of audio compression standards and media players. Internet Radio can be the re-broadcast of a licensed terrestrial radio station, but many internet radio stations are independent of traditional terrestrial radio stations and only exist on the Internet. As the service is streamed over the internet it is possible to access the stations from anywhere in the world. Internet users tend to find internet stations by going to online radio networks, such as Live 365 or SHOUTcast which list thousands of Internet Radio stations covering a variety of music genres. The Internet Model means that it is not really possible to regulate Internet Radio at a national or local level and regulators in most overseas jurisdictions tend to exempt Internet Radio from licensing regimes. In contrast, Mobile Radio is a new sound broadcasting service that has become possible due to convergence, where the content is broadcast or streamed not to traditional radio sets but to mobile phones or other portable devices. As this service is linked to national, regional or local networks, it is capable of being regulated in the same manner as traditional broadcasting services. It utilises the same three main radio technology families for delivering broadcast content to mobile phones or devices, as were identified for digital mobile television RECOMMENDATIONS: Based on the above discussion on digital broadcasting standards, the WG makes the following technical recommendations, namely that: 1. Based on decisions taken at the ITU Regional Radiocommunication Conference

2006 (RRC-06), the DVB family of standards should be adopted in South Africa for digital television broadcasting.

2. The principle of technology neutrality in regulation prevails and mobile broadcasting services must be introduced on any platform using any mobile digital broadcasting standard.

3. In the digital switchover process, provision should be made for the introduction of at least one DVB-H mobile broadcasting service on the frequencies planned at RRC-06 for metropolitan digital transmission networks in South Africa.

4. The Eureka 147 (ETSI EN 300 401) and Digital Radio Mondiale (DRM) (ETSI ES 201 980) standard be adopted as complementary standards for digital sound broadcasting in South Africa.

5. The temporary allocation for T-DAB in 238.432-239.968 MHz in the current National Table of Allocations must be made permanent and licensed without further delay to allow for the introduction of a multi-channel Digital Sound Broadcasting Service in South Africa;

6. As there is currently no global standard for digital satellite sound broadcasting, market forces should be allowed to dictate the take up of digital satellite sound broadcasting in South Africa; and

7. When ICASA licenses satellite sound broadcasting services the regulator must plan and assign terrestrial frequencies for complementary terrestrial repeaters.

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2.3. STANDARDS, FORMATS AND APPLICATIONS RELATED TO DIGITAL BROADCASTING

2.3.1 Image Quality and Digital TV Formats Standard TV signals are made up of 625 lines of resolution, Digital Versatile Disks (DVDs) are digitally made movies, which means are of a better visual quality than movies broadcast on standard TV. HDTV allows for even better resolution. RESOLUTION COMPARISON13

There are 18 "standard" digital television formats. Each one provides a different picture quality. The 18 standards fall into 4 broad categories:

• 480i - (square-screen only) digital version of the best current television signals; • 480p - (square or widescreen) also known as "standard definition"- has the same

detail as today's television signal but looks sharper;. • 720p - (widescreen only) this HDTV format provides an image just about as good

as 1080i, while allowing other 480p signals to be broadcast at the same time; and

• 1080i - (widescreen only) the HDTV format that allows the most detailed image available from broadcast TV.

The number refers to the number of lines of vertical resolution. The letter refers to the way the TV makes the picture, either Progressive (p) or Interlaced (i). Because a "p" image looks sharper than an "i" image, the number of lines of resolution can be reduced and still result in a good-looking image. So a 720p image looks just as good as a 1080i image. At these resolutions, image clarity is more a result of the quality of the film the program was shot on, and the quality of the transfer to video, rather than the resolution it is transmitted in. The standards falling under the 480i and 480p format categories are referred to as SDTV. The WG would suggest the use of the 480p for SDTV as it allows for sharper image quality and can accommodate both 4:3 and 16:9 ratios. The main HDTV standards, as mentioned above, are 720p, 1080i and 1080p.

13 These images are not actual TV images, since you can't truly demonstrate different resolutions on paper. They are accurately rendered approximations

designed to demonstrate the real difference between the video formats. Source: http://www.wnep.com/Global/story.asp?S=709431 (Used in this

document with the permission of webmaster)

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Another aspect to standards that needs to be considered is the compression standard used. Obviously, the higher the definition or resolution, the higher the data rate required to transmit the picture for real time video. Therefore, the higher the efficiency of the compression system, the lower the bandwidth required for transmission of the signal. For this reason, only MPEG4 Part 10 should be considered for HDTV transmission (emission). The 1080p standard will deliver the highest quality video, but is not yet a viable option for broadcasting. Most HDTV displays (plasma displays) require progressive scanning and convert interlaced formats to progressive prior to display. Progressive scanning is therefore the preferred standard. The choice is therefore between 720p/50 and 1080i/25. The 1080i system offers more than twice (1920X1080 = 2.07 million pixels) the number of pixels of the 720p system (1280X720=0,92 million pixels). The WG holds the view that South Africa should therefore adopt the 720p standard now, with a view of moving to 1080p as the technology improves (See Annexure D – Technical Report for a more detailed analysis). Based on current compression standards it would not be advisable to implement HDTV terrestrially during the digital switchover, as one HDTV channel would significantly reduce the number of channels that could be accommodated on a single frequency. It would therefore not be wise to roll out HDTV terrestrially initially, but to first wait for spectrum to become free with the switch-off of analogue services. Any spectrum planning exercise should keep in mind the spectrum requirements of future terrestrial HDTV. In the mean time, HDTV could be rolled out on DTH or IPTV. In Europe, an HD ready label scheme has been put in place to enable consumers to identify equipment capable of providing an HD picture. The HD Ready label for TV sets requires:

• the 16:9 “wide” screen format; • a minimum resolution of 720 lines (and 1280 dots per line); • compatibility with the two HD production and reception formats (1080i and 720p); • dual analogue input (YUV, DVI and HDMI), to ensure compatibility with other

audio-visual equipment in the household (decoder, camcorder, player and recorder).

In South Africa, the benefit of a labelling scheme would be to allow consumers to make an informed choice when purchasing a TV set, with a view to being ready for when HDTV broadcasts commence on digital broadcasting platforms. RECOMMENDATION: The WG makes the following technical recommendation, namely that South Africa consider implementing a HD Certified labelling scheme and adopt the following minimum standards for High Definition TV (HDTV): • MPEG4 Part 10 with AAC and Dolby AC3 support; • 720p standard now, with a view of moving to 1080p; and • HDMI interface.

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2.3.2 Aspect Ratios The 16:9 aspect ratio has been adopted by the ITU (ITU-R BT.709) as part of the specification for HDTV. This may be part of the reason why the two are often confused. There are different ways of achieving widescreen content from actual filming to various post-production processes; full capture in a widescreen format, squeezing wide frames onto traditional film so the process can simply be reversed for display (anamorphic widescreen), cropping and re-packaging video (pan and scan) etc. Display devices usually have an algorithm for filling up a screen when the content is of a different aspect ratio, e.g. letterboxing, pillar boxing, or a zoom function to crop the top and bottom or sides. DTT in Standard Definition can be broadcast in both 16:9 and 4:3 as used in analogue. RECOMMENDATION: The WG makes the following technical recommendation, namely that South Africa consider including a 16:9 aspect ratio into any specification set for HDTV in South Africa.

2.3.3 Interactive Broadcasting and Return Path Channels Interactive services are services that have no association typically to the video and audio. These services are also streamed to the STB and stored in the STB memory also using data channels within the DVB stream. The user can call up these services and interact with them at an STB level. In contrast, advanced return path interactive services are services downloaded to the STB, but interaction is via a return path from the STB back to the host service provider, via imbedded GSM cards within the STB or internal / external dial up modems or wireless broadband access connections. There is the ability on digital platforms, assuming bandwidth availability, to provide non-traditional broadcast services like interactive advertisements, national and regional information, live web pages, games, quizzes etc that are not associated with any service or programme. These services typically are already operating on existing digital broadcasting platforms in SA and around the world with varying degrees of success. More advanced interactive services allow viewers to switch camera angles, video feeds, etc. but require massive additional bandwidth. It is increasingly being recognised that broadcasting will not be a one-way communication service in future. ITU-R Study Group 6, which deals with broadcasting services, describes broadcasting as follows:

“Broadcasting makes use of point-to-everywhere information delivery to widely available consumer receivers. When return channel capacity is required (e.g. for access control, interactivity, etc.), broadcasting typically uses an asymmetrical distribution infrastructure that allows high capacity information delivery to the public with lower capacity return link to the service provider. The production and distribution of programs (vision, sound, multimedia, data, etc.) may employ contribution circuits among studios, information gathering circuits (ENG, SNG, etc.), primary distribution to delivery nodes, and secondary distribution to consumers.”

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There are numerous alternatives that can be deployed for the broadcasting return channel, including:

• Telephone dial up • Wireless broadband access connections • Mobile cellular telephony • Traditional terrestrial broadcast spectrum • Satellite

In 2002 ETSI developed a standard (EN 301958) for an interaction channel (return channel) for DVB-T. The standard specifies the channel coding/modulation and the medium access control protocol. However, it only provides guidelines on spectrum. Nevertheless, in the DVB-RCT system, the Forward Interaction path and the Return Interactive path are implemented in the same radio frequency bands - i.e. VHF/UHF Bands III, IV and V. The DVB-T and DVB-RCT systems form a two-way system, which share the same frequency bands. Thus it is possible to benefit from common features in regard to the RF devices and parameters (antenna, combiner, propagation conditions, etc.) Nevertheless, the Return Channel- Terrestrial (RCT) system is suited to work in other frequency bands preferably adjacent to broadcasting. The Return Interaction Channel can be located in any free segment of an RF channel, taking in account existing national and regional analogue television assignments, interference risks and future allocations for DVB-T without causing interference to existing and planned broadcast services. The non-uniform distribution of energy in analogue TV RF channels lends itself ideally to this approach. In developing the standard, ETSI envisaged that specific spectrum allocations and sharing rules would be agreed for DVB-RCT transmissions in the spectrum currently assigned to broadcasting, during the ITU RRC process. However, at RRC-04 there was opposition to the Conference addressing the issue of interactive broadcasting and a statement was included in Chapter 5 of the RRC-04 Report, which states: “5.1.3.3 Possible future developments

The new plans, to be adopted at the second session, will need to provide a framework in which each country can continue to satisfy its own individual requirements on an equitable access basis. The new plans must be sufficiently forward-looking and sufficiently flexible to cover developments in digital technology in future years. In addition to video and audio signal distribution, digital terrestrial broadcasting may serve as a data platform for innovative telecommunication applications (e.g. e-health, e-government, e-learning) to effectively help to bridge the digital divide, in particular in the developing world.”

No further debates were held regarding interactive broadcasting at RRC-04. STB-related interactive services can be provided with digital broadcasting, provided that the STB has sufficient memory and an operating system to support such services. Interactive services using return paths such as telephone, GSM modem, broadband connections could be implemented where feasible. However, inclusion of advanced interactivity features in the basic STB, is not recommended.

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RECOMMENDATION: The WG recommends that interactive services that do not require a return path can be implemented from the inception of digital terrestrial television, but interactive Broadcasting Services using a return path requiring the use of broadcast frequency spectrum are not recommended during the digital switchover phase. After analogue switch-off when sufficient broadcast spectrum becomes available this type of return path can be considered.

2.3.4 Electronic Programming Guide (EPG) Enhanced services are services running in parallel to the video and audio streams. They use data paths embedded in the DVB stream. The services may be onscreen or user initiated via the STB to display the information, but the information pertains to, and is associated with the video and or audio. The information is downloaded on the STB and the interaction with the user is with the STB. Typical examples of enhanced services include:

• Electronic programme information (EPI) is a basic user initiated call to the STB to display a banner over the video with the current and possibly next up programme title only. This requires integration of the head end supplier with the automation systems of the channel service providers to keep this EPI current and accurate.

• Electronic programme guide (EPG) is a more advanced service enabling the viewer to call up information of the current programme and a number of programmes to follow, with additional information and synopsis of each of the programmes. This requires more advanced integration with head end service providers and channel service providers at automation payout level and business enterprise scheduling and programme information systems.

• This EPG service can be further enhanced with look ahead of all programmes on channels up to 7 days with more detailed synopsis of programmes and possible search functions. Further, this requires more transport stream capacity.

• Partially sighted services provide additional audio, enhancing the impaired viewing experience. This requires additional audio streams and complex production facilities to produce these services.

2.3.5 Set-top Box (STB) This section addresses the following additional technical decoder-related matters which need to be considered, as these will have significant impact on the decisions on DTT roll-out.

• Horizontal vs Vertical Model • Choice of Operating System • Conditional Access Options & Implications • Compression Technology • Minimum Decoder Specifications

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(a) Horizontal versus Vertical Market

The DTH decoder market in South Africa is vertically integrated. That is, each operator controls the models of decoder which may be used on their platform. This is not expected to be the case for DTT. Most of the successful DTT roll-outs have been based on Free to Air (FTA) services. For this reason the decoder market could not be controlled. The ability for a decoder to receive services from different platforms and service providers is known as a horizontally integrated market. In an attempt to facilitate a horizontally integrated market, DVB developed a specification for a standard decoder middleware known as MHP (Multi-media Home Platform). It is also envisaged that different levels of DTT decoders will be available in the market, from entry-level “minimum” decoder to perhaps Personal Video Recorders (PVRs). ().

(b) Operating System

There is no clear distinction between operating system (OS), API (Application Programme Interface) and middleware. Here the term middleware is taken to mean OS and API. The middleware provides a high level interface to the low level decoder functions such as display drivers and remote control functions. The middleware also takes care of the low level decoder management such as menu navigation and programme guide. The middleware provides a standard interface for application development, which allows an application to run on different hardware platforms using the same middleware. Through applications, the middleware allows decoder interactivity (see Figure 1).

FIGURE 1: STB SOFTWARE ARCHITECTURE

RTOS and drivers

Open TV

Java

Navigation, User Interface, EPG.

Decoder Software Architecture

Run Time Engines And

Virtual Machines

Operating System

Application Layer

Middleware

Low Level Driver APIs

Downloaded Applications

MHEG5 Flash

MediaHighway MHP

CA Kernel

API

API

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A number of different middleware systems are available. Some decoder manufacturers develop their own middleware. This is generally low cost as no royalties or licensing is required. This middleware is generally not intended for application development. It merely provides basic decoder functionality. There are two main proprietary middleware systems commonly in use. These are Open TV and MediaHighway. These are proprietary and attract high royalties and licensing fees. There are two non-proprietary systems available. These are MHEG5 and MHP. MHEG5 (Multimedia and Hypermedia Experts Group) is an internationally standardised language for multimedia and hypermedia objects. This is more like a virtual machine than an operating system. It is used for support of multimedia in the UK on DTT (Digital Terrestrial TV). MHP (Multimedia Home Platform) is a standardised middleware defined by DVB (Digital Video Broadcasting – a European Standards Group). MHP was defined by DVB to be an open solution to allow multiple service providers to operate through a single compatible receiver at the home. This was an attempt to facilitate a cost effective horizontal market. The large memory footprint required to support MHP on a decoder resulted in a relatively high cost decoder. This has less of an impact today due to the lower cost of memory. Many European countries are now mandating the adoption of MHP for decoder middleware.

A middleware system is required if enhanced programming is to be provided. Currently in South Africa for DTH, both platforms use OpenTV. This has stringent licensing conditions. MHP standardises the operating system, allowing any operator to “plug in” its own applications to any STB that is MHP compliant. This, in turn, offers the end-user the flexibility to receive content offerings from one or more content publishers without the need to acquire a new STB. It also gives end-users the flexibility to change content publishers at minimal cost.

(c) Conditional Access

Conditional access systems could be considered to be “plug-in software” applications sitting on top of the operating system. Satellite and cable services traditionally have mainly been used for commercial services and hence one would typically find various advanced conditional access systems supporting various TV channels. Until now it has not been critical that the encryption systems used for satellite DTH (Direct to Home) services, be of a common standard or offering common interface. In fact commercial companies regarded this as a strategic edge to be able to run its own encryption system. Conditional access is considered to be a commercially competitive issue and, consequently it is the view of the WG that this should remain an unregulated activity. There are currently 2 proprietary CA systems in use in South Africa for digital satellite broadcasting. Sentech uses the NagraVision system whilst MultiChoice uses IRDETO. In the short to medium term, both these systems should be allowed to continue in South Africa in the satellite DTH environment.

Digital broadcasting systems can be operated in three basic modes viz. FTAFTA, free-access and fully encrypted:

• FTA services do not cater for any encryption system and typically any STB that complies with the DVB-T standard should be able to receive the signal. The advantage of such a system is that STB’s are extremely cheap and it will reduce the barrier to entry when STB’s are to be funded or subsidised. The disadvantage is that one has no control over the viewer base, will not know exactly how many viewers are watching off the DTT platform and it only offers limited value added services. No software

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control or managing of the decoder will be possible. No value-add applications can be provided on the decoder, and no over the air upgrades will be possible. . In order to ensure that the market is not flooded with low quality equipment, it is proposed that STB’s should be subject to some form of quality control to ensure that a reasonable quality of STB is ensured. A minimum standard for the equipment will have to be set. It is suggested that this could be done through Standards South Africa, the standards-generating arm of the South African Bureau of Standards (SABS).14 This would make sense as SABS already publishes national standards which it prepares through a consensus process in technical committees (made up of a variety of stakeholders).

• Free-access systems use more advanced STB’s which provide the option

of implementing conditional access. The basis of this option is that viewers will have to acquire a STB as well as a smart card (or decoders with embedded CA) to be able to watch the programmes. Apart from a normal TV licence fee, no additional monthly cost will be required. Although more expensive initially, this option offers broadcasters full control over their viewers as well as the introduction of advanced value added services. It will be possible for example to control TV license fees paid or institute pay-per-view services, with the necessary supporting infrastructure. The activation of embedded CA in order to deliver a free access system would necessitate that that there be call centre established for all the STBs in the market and that consideration be given to who will cover the cost of regularly updating the CA for the purposes of ensuring that security is not compromised. In addition, this step would require that royalties be paid for the use of the proprietary CA, and if the principle that no additional cost is imposed on the consumer is applied, then it would have to be covered in the operating budget of broadcasters on an annual basis.

• Fully encrypted services can be used to ensure monthly payments for

programmes viewed etc. This model is based purely on commercial principles and full control of subscribers is essential. Once one provides full encryption services on a DTT platform, the same platform can be used for free-access as well as FTA services. Activation of CA for fully encrypted services would require the same support infrastructure as in free access systems with the addition of subscriber management systems.

The cost of the STB poses the most critical barrier to entry in terms of getting the viewers to accept a digital switchover process. The entry level STB has to be as cheap as possible, However, it is also necessary to ensure that more sophisticated STBs are available which are flexible enough to provide value added services.

14 SABS is a statutory body that was established in terms of the Standards Act, 1945 (Act No. 24 of 1945) and continues to operate in terms of the latest

edition of the Standards Act, 1993 (Act No. 29 of 1993) as the national institution for the promotion and maintenance of standardization and quality in

connection with commodities and the rendering of services

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POSITION: The WG did not reach agreement on whether CA should be embedded on the basic STB which would be subsidised by government. It was decided that each WG member could indicate what the minimum specification for the subsidised STB should be in an Appendix to the Report (please refer to individual WG members views which have been attached in Appendix C). RECOMMENDATION: The WG did agree, to recommend that broadcasting service licensees should be allowed to roll out the CA system of their choice in more advanced STBs that can be offered in the market.

(d) Compression Standard

New large-scale DTT (DVB-T) installations world-wide will in future support MPEG-4. Starting a new roll-out on MPEG-2, will immediately result in a legacy system, requiring a costly upgrade to MPEG-4, sooner rather than later. MPEG-4 decoders are becoming rapidly available, and although there will initially be a price penalty for MPEG-2 vs MPEG-4, the large anticipated world-wide roll-out of MPEG-4 will soon see prices below that of the current MPEG-2.

(e) Minimum STB specifications

If South Africa is to follow the route of a horizontal decoder market then it will be necessary to define some form of minimum decoder specification for the entry level STB to ensure technical compatibility. Presumably some process for conformance testing and certification will also be required. This function is best performed by some independent industry body. In the UK this function is performed by the “Digital TV Group”. In particular DTG Testing Ltd., performs the following functions:

• Over the Air Upgrades • Test Materials • Application Testing • Product Conformance testing

A question that faced the WG was whether the minimum STB specification needed to make provision for e-government. Electronic government or e-Government refers to government’s use of information and communication technology (ICT) to exchange information and services with citizens, businesses and other arms of government.

In South Africa, the e-government policy concluded that it must address at least three major issues: • e-governance – application of IT to intra-governmental operations; • e-services – application of IT to transform the delivery of public services. The

services affected include general information and regulations, education and culture, health consulting and tele-medicien, benefits, taxation etc.; and

• e-business – the application if IT to operations performed by government in the manner of business-to-business transactions and other contractual relations.

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Linking digital broadcasting and e-services will result in improved service delivery and the achievement of Batho Pele objectives for offering equal access to government services and more and better information. The information society has much untapped potential as identified in NEPAD objectives to improve productivity and the quality of life of citizens. The ability of digital television to offer interactive services or pseudo-interactivity would benefit e-government and allow for new services, applications and content that will create new markets and provide the means to increase productivity and hence growth and employment throughout the economy. It will also provide citizens who do not have access to computers and the internet with a convenient access point to information and communication tools in the household that may substitute or complement services available on other platforms.

In order to achieve this and not promote a further digital divide in the arena of digital broadcasting when it is introduced, interactive television would require adding to the basic requirements for the reception of DTT a minimum requirement for open middleware standard. Where governments have mandated interactivity the standard selected has been the Multimedia Home Platform (DVB-MHP) which is an open middleware system standard designed by the DVB Project for interactive digital television. The MHP standard enables the reception and execution of interactive Java-based applications on a TV set. Applications can be delivered over the broadcast channels, together with audio and video streams.15

The inclusion of MHP in the selection of the basic STB or idTV (digital tuner) standard would significantly increase the cost of the digital switchover, however unlike the inclusion of embedded CAS which has been opposed by a FTA broadcaster, the subsidy of STBs with MHP capability can be justified on the grounds of e-government and enabling access to government information by the public on other platforms.16 The inclusion of MHP as a middleware standard for STBs will raise the cost by a much as $16-20 for a once-off licensing fee. There are other alternatives to achieve the same result, Altech UEC, which is a South African manufacturer of STBs, for example bundles their basic MPEG 4 STB with Cheetah, a proprietary middleware solution, currently for free.

POSITION: The WG are of the view that the decision to mandate an interoperable open middleware standard for the basic STB to promote e-governance and interactive television for all, is a government decision and the WG has not taken a specific stance or recommendation on this. Table 1 below, provides illustrative costs for a range of STBs that can be considered when setting a minimum specification.

15 This would not negatively impact on the introduction of Digital Television sets with integrated digital tuners, as MHP has been mandated in some

markets resulting in MHP Integrated Digital TV sets being available that support interactive services such as text information services, weather maps,

games, e-mail, etc.

16 It is also worth noting that conditional access (CA) is not required for interactivity or e-government services as it related primarily to the

provision/security of exclusive audio or video content.