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BROADCASTING SERVICES AMENDMENT (DIGITAL TELEVISION AND DATACASTING) BILL 2000

1998-1999-2000

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

BROADCASTING SERVICES AMENDMENT
(DIGITAL TELEVISION AND DATACASTING) BILL 2000

DATACASTING CHARGE (IMPOSITION) AMENDMENT BILL 2000

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Communications, Information Technology and the Arts, Senator the Hon Richard Alston)

ISBN: 0642 435812

BROADCASTING SERVICES AMENDMENT
(DIGITAL TELEVISION AND DATACASTING) BILL 2000

DATACASTING CHARGE (IMPOSITION)
AMENDMENT BILL 2000
OUTLINE

The Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000 amends the Broadcasting Services Act 1992 (the BSA) and the Radiocommunications Act 1992 (the Radcom Act) to:
• make changes to the arrangements for the introduction of digital television in Australia; and

• implement a new regulatory regime for the provision of datacasting services.

The changes follow various reviews required to be conducted by clause 59 of Schedule 4 to the BSA.

The proposed changes would:
• require commercial and national television broadcasters to simulcast their television broadcasting services in digital mode in standard definition (SDTV) format during the simulcast period (items 67, 71, 76 to 80, 82, 84, 88, 90, 93, 102, 104, 106, 109, 111, 114 and 123 of Schedule 1);

• require commercial and national television broadcasters to simulcast a minimum of 20 hours per week of high definition television (HDTV) programming during the simulcast period in addition to the SDTV version of the service (items 69, 72 and 134 of Schedule 1 and new Division 2 of Part 4 of Schedule 4 to the BSA to be inserted by item 126 of Schedule 1);

• enable commercial and national television broadcasters to:
- provide digital enhancements to their main simulcast programs, where the subject matter of the enhancement is closely and directly linked to the primary program, or (where the primary program is a sporting event) the enhancement consists of an overlapping match or game in the same sport at the same venue;

- multichannel 2 television programs where a sporting or other important event runs beyond scheduled time into another scheduled program (to enable the viewer to choose between watching the end of the event or the other program); and

- provide an electronic program guide;

(items 91, 92, 94, 112, 113 and 115 of Schedule 1); and

• insert a new Schedule 6 in the BSA to provide for the regulation of datacasting services (item 140 of Schedule 1).

The scheme for regulation of datacasting services has the following elements:

• a datacasting service will be defined in broad terms as a service that delivers content in any form where the delivery of the service uses the broadcasting services bands (item 12 of Schedule 1);
- this definition is wide enough to also include the delivery of radio or television programs;

• it will be an offence to intentionally provide a datacasting service without a datacasting licence (clause 49 of proposed Schedule 6);

• a datacasting licence will be subject to television program genre and audio content restrictions which are designed to encourage datacasting licensees to provide a range of services that are different to traditional broadcasting services (Divisions 1 and 2 of Part 3 of proposed Schedule 6);

• under the genre conditions:
- category A television programs (such as drama, current affairs, sport, documentary, light entertainment and comedy) are not to be transmitted, except for incomplete extracts of 10 minutes or less (clauses 13 and 14 of proposed Schedule 6); and

- a category B television program (such as news, business information or a weather bulletin) of 10 minutes or less can be transmitted, but can only be updated every half hour (clauses 15 and 16 of proposed Schedule 6);

• it will be an offence for a datacasting licensee to intentionally engage in conduct that breaches the television program genre and audio content restrictions or other licence conditions (clause 52 of proposed Schedule 6);

• datacasting services will be allowed to provide, among other things:
- information-only programs (including matter that enables people to carry out transactions);

- educational programs;

- interactive computer games;

- content in the form of text or still visual images;

- parliamentary broadcasts;

- ordinary electronic mail;

- Internet content;

• where any television or radio programs outside the genre and audio content restrictions are provided in accordance with a datacasting licence, the service is deemed not to be a broadcasting service for the purpose of any law of the Commonwealth (for example, the licensee cannot be prosecuted for providing a broadcasting service without a licence under Division 1 of Part 10 of the BSA) (clause 6 of proposed Schedule 6);

• broadcasters will be exempt from the offence of providing a datacasting service without a licence for the provision of a broadcasting service under, and in accordance with the conditions of, a broadcasting licence (clause 51 of proposed Schedule 6);

• datacasting transmitter licences become a category of apparatus licence under the Radcom Act, are intended to be allocated under a price-based system under section 106 of that Act and will have a term of 10 years with the expectation of a single renewal of 5 years only (Schedule 2);

• a condition of the Radcom licence will prevent a datacasting transmitter licensee, before 1 January 2007, from operating a transmitter for transmitting a datacasting service (within its broad meaning) unless there is a BSA datacasting licence authorising the provision of the service (proposed paragraph 109A(1)(h) to be inserted by item 25 of Schedule 2);
- the transmitter licensee will be able, from 1 January 2007, to use the transmitter to provide licensed broadcasting services as well as licensed datacasting services (proposed paragraph 109A(1)(i) to be inserted by item 25 of Schedule 2);

- the 1 January 2007 date corresponds to the end of the moratorium on the allocation of new commercial television licences under section 28 of the BSA;

• the transmitter licences for commercial and national television broadcasters will be subject to a limitation which prevents the transmission of a datacasting service in digital mode in addition to the broadcasting service unless the licensee holds a datacasting licence under the BSA authorising the provision of the datacasting service (proposed subsections 100A(1B), 100B(2B), 102(5) and 102A(5) to be inserted by items 10, 12, 15 and 17 of Schedule 2);

• datacasting licences will be allocated by the Australian Broadcasting Authority (the ABA) on written application (Part 2 of proposed Schedule 6);

• in addition to the television program genre and audio content restrictions, datacasting licences will be subject to content and suitability conditions similar to those that apply to commercial television broadcasting services (Division 3 of Part 3 of proposed Schedule 6);
- content conditions will not apply to the supply of an Internet carriage service; however where such a service is provided, the licensee is required to comply with any applicable online provider rule under Schedule 5 of the BSA;

• codes of practice and standards provisions similar to those that apply to broadcasters will apply to datacasters (Part 4 of proposed Schedule 6);

• a mechanism will be included for complaints to the ABA about datacasting services similar to the complaints mechanism applying to broadcasters (Part 5 of proposed Schedule 6);

• provision is included to enable the ABC and the SBS to provide datacasting services, either directly themselves or through other business arrangements in accordance with provisions of their governing legislation that enable them to engage in authorised businesses (clauses 39 and 40 of proposed Schedule 6);

• provision is made to prevent:
- a person being in a position to exercise control of both a commercial television broadcasting licence and a datacasting transmitter licence (items 7, 13, 14, 16, 25 to 39, 42, 43 and 58 to 66 of Schedule 1); and

- national broadcasters from being in a position to exercise control of a datacasting transmitter licence (clause 41 of proposed Schedule 6);

• provision is included for the ABA to give nominated datacaster declarations which will have the effect of clarifying regulatory responsibilities between a datacasting licensee and a datacasting transmitter licensee in circumstances where the licences are held by different persons (Part 7 of proposed Schedule 6);
- for example, where a transmitter licence is held by a company which provides transmission services on behalf of content providers and is not itself involved in the selection or provision of the datacasting content for transmission, it is only the content providers who need be subject to content regulation under the BSA.

The Bill also:

• requires a further review before 1 January 2004 of:
- HDTV quotas and the regulatory arrangements for HDTV in remote areas (items 73 and 139 of Schedule 1); and

- whether any amendments should be made to Schedule 6 which sets out the regulatory scheme for datacasting (clause 61 of proposed Schedule 6);

• requires the reviews which are to be held before 31 December 2005 to also deal with:
- the provisions associated with additional commercial television broadcasting licences in solus and two-station markets; and

- the regulatory and revenue arrangements which should apply to enable a datacasting transmitter to be used on or after 1 January 2007 to provide other services licensed under the BSA;

(item 138 of Schedule 1);

• re-enacts the provisions for digital television format standards in a clearer and more logical sequence (item 68 and new Division 1 of Part 4 of Schedule 4 to the BSA to be inserted by item 126 of Schedule 1);

• requires the ABA to determine start-up dates for SDTV digital transmission in remote areas (items 87, 89, 108 and 110 of Schedule 1);

• clarifies that captioning is taken to be part of a television program to ensure that when broadcaster’s programs are retransmitted, the captioning must also be retransmitted (item 17 of Schedule 1);

• clarifies that captioning standards must not require captioning of non-English language programs, music without recognisable words in English, or incidental or background music (items 127 and 128 of Schedule 1); and

• ensures that the ABA has the power to allot the channels that will be used by broadcasters for digital services after the end of the simulcast period having regard to the most efficient use of spectrum (items 83, 95, 96, 99, 105, 116, 117 and 120 of Schedule 1);

• encourages the issue of an additional commercial television licence in 1 and 2 station markets by:
- providing a mechanism for the issue of a licence in 2 station markets (items 19, 23, 41, 44, and 54 of Schedule 1); and

- enabling a licensee allocated an additional licence to multichannel the existing and new services in SDTV digital mode on the one channel (item 86 of Schedule 1);

• ensures that if solus operators allocated an additional commercial television licence in a single market do not provide services under the licence, they will lose the licence and the opportunity to obtain such a licence in future, unless exceptional circumstances apply (item 22 of Schedule 1);

• clarifies the operation of the spectrum reduction provisions in circumstances where there is a breach of HDTV format standards or HDTV quota standards (items 97, 98, 100, 101, 118, 119, 121 and 122 of Schedule 1);

• requires the report of the Australian Communications Authority (the ACA) about datacasting charges under clause 53 of Schedule 4 to the Act to exclude charges for broadcasting services and currently provided teletext services from datacasting charge (items 75 and 137 of Schedule 1);

• clarifies that the suitability provisions in the Act are subject to the spent convictions arrangements in Part VIIC of the Crimes Act 1914 (items 24 and 45 to 47 of Schedule 1);

• contains transitional provisions relating to the arrangements for the introduction of digital television and datacasting (Part 2 of Schedule 1);

• makes various amendments to the BSA consequential upon the introduction of arrangements for the regulation of datacasting services (items 1 to 6, 11, 12, 20, 21, 25 to 39, 42, 43, 48 to 53, 55 to 66, 70, 74, 85, 107, 130, 131 and 135 to 137 of Schedule 1);

• makes other minor technical amendments to the BSA (items 8 to 10, 15, 18, 40, 81, 103, 124, 125, 129, 132 and 133 of Schedule 1);

• amends the Radcom Act to provide for the introduction of datacasting services and makes other minor technical amendments to that Act (Schedule 2);

• makes minor amendments to other legislation consequential upon the provisions for regulating datacasting (Schedule 3).

The Datacasting Charge (Imposition) Amendment Bill 2000 amends the Datacasting Charge (Imposition) Act 1998 to clarify that datacasting charge will not be imposed on a transmitter licence for current teletext services as long as they remain substantially the same as the services currently provided.

FINANCIAL IMPACT

The amendments are expected to have no significant impact on Commonwealth expenditure. Considerable revenue should be derived from the allocation of datacasting transmitter licences under a price-based allocation system, but it is not possible to forecast what that revenue might be at this time.

The amendments include changes that give the Australian Broadcasting Authority more flexibility in deciding which channels should be allocated to broadcasters at the end of the simulcast period (having regard to the most efficient use of spectrum). This could result in more spectrum channels being handed back to the Commonwealth when analog services are switched off, than would otherwise be the case. This would, in turn, increase the potential revenue to the Commonwealth from the sale of this spectrum for other purposes.

The amount of the datacasting charge to be imposed on commercial and national television broadcasters under the Datacasting Charge (Imposition) Act 1998 will be formulated following a report by the ACA. The exemption of teletext services from datacasting charge by the Datacasting Charge (Imposition) Amendment Bill 2000 is not expected to have a significant impact on the revenue received from the charge.

ABBREVIATIONS

A number of abbreviations are used in this Memorandum, as follows:

REGULATION IMPACT STATEMENT

Introduction

The Government legislated for the introduction of digital terrestrial television broadcasting (DTTB) in Australia by amending the Broadcasting Services Act 1992 (BSA) with the Television Broadcasting Services (Digital Conversion) Act 1998 (Digital Conversion Act). The principal elements of the legislation are:

• The commercial and national free to air television broadcasters will be loaned sufficient additional spectrum, free of charge, to enable them to simulcast their existing service in analog and digital format for at least 8 years, after which period they will be required to return the analog spectrum to the Commonwealth;
• Free to air broadcasters will be required to commence digital terrestrial television broadcasts in metropolitan areas on 1 January 2001 and commence in regional areas between 1 January 2001 and 1 January 2004;
• Following the commencement of digital broadcasting, the free to air broadcasters will be required to broadcast minimum levels of High Definition Television (HDTV). If the free to air broadcasters do not comply with these requirements they will forfeit their additional spectrum;
• The free to air broadcasters will be able to use part of their additional spectrum not utilised for digital television to provide datacasting services, but will have to pay a charge to do so. This is to ensure that they do not have an unfair competitive advantage over other datacasting providers by virtue of their free loan of spectrum;
• Available broadcasting spectrum not required by the free to air broadcasters for digital conversion will be allocated on a competitive basis for the transmission of datacasting services. Existing free to air broadcasters will not be permitted to bid for this spectrum;
• Free to air broadcasters are not be permitted to use their digital spectrum for multichannelling (the provision of multiple separate programs) or subscription television services;
• The prohibition on the issue of new commercial television broadcasting licenses has been extended until 31 December 2006;
• Captioning standards will be set in regulations, the intention being that prime time services and non-prime time news and current affairs, should be captioned; and
• A regime is established for access to transmission towers for the location of transmitters, or the sites on which such towers are located.

As discussed in the Regulation Impact Statement contained in the Explanatory Memorandum for the Television Broadcasting Services (Digital Conversion) Bill 1998, some of the above elements have implications for competition in the broadcasting industry. The RIS stated that the Government considers that restrictions on competition during the transition to digital television are required in order to achieve its objectives to:
• Allow for a smooth transition from analog to digital terrestrial television broadcasting (DTTB) and transmission which avoids disruption to consumers;
• Maximise the use of existing transmission infrastructure;
• Introduce DTTB services within a timetable to ensure that Australia does not fall significantly behind the rest of the world;
• Maximise viewer choice and diversity of product (recognising the role of community television services and Australian content in this regard) across free to air and subscription services.

The Government considers that these objectives can only be achieved within the announced policy framework.

Schedule 4 of the BSA requires that certain standards and regulations for digital television be considered through a series of reviews (Clause 59 of Schedule 4 of the BSA). The review process included extensive consultation with stakeholders about the options for appropriate regulatory and other solutions for the digital conversion process. The reviews were required to consider whether amendments of laws of the Commonwealth were required in relation to the following matters:
• the scope of datacasting services;
• the provision by commercial and national broadcasters of services which are ‘incidental and directly linked’ to their simulcast programs (so-called enhanced services);
• Part 4 of Schedule 1 of the Act relating to digital television format standards including high definition television (HDTV), captioning, transmission standards and datacasting. HDTV and captioning were considered separately. The issues of transmission and datacasting standards were not considered as they were addressed in the Standards Australia process and determined with industry consensus;
• the use of multichannelling by the ABC and SBS to provide additional channels of programs which are in accordance with their charters;
• whether underserved regional licence areas (those with fewer than three commercial television broadcasting services) are provided with up to the same number of services as metropolitan licence areas;
• the retransmission of digital commercial broadcasting services on subscription television services; and
• convergence between broadcasting services and other services.

Also subject to review were the regulatory arrangements that should apply to:

• the allocation of spectrum in the broadcasting services bands for use for the provision of datacasting services; and
• the digital transmission of a community television service, free of charge, using spectrum in the broadcasting services bands allocated for datacasting services.

Under the BSA, the Minister is to report to Parliament on the reviews. Certain provisions in the BSA and the Radiocommunications Act 1992, including Part 4 of the BSA (relating to HDTV, captioning and other standards) and provisions relating to the use of transmitters for datacasting services, do not come into effect until a day to be fixed by Proclamation. Such a Proclamation must not be made before the last occasion on which a copy of a report of a review listed above is laid before a House of Parliament as required under the BSA.

Policy Decisions

After consideration of the issues raised in the reviews, the Government announced further elements of the digital television conversion framework relating to high definition television, datacasting and program enhancements on 21 December 1999. In March 2000, the Government made decisions regarding captioning, provision of new services in underserved areas and arrangements for the hand-back of analog spectrum. The main elements of these decisions are:

Must carry of standard definition television (SDTV)

• Existing free to air broadcasters will be required to provide a standard definition digital simulcast of their transmission in analog mode at all times in addition to meeting high definition television quota requirements.

High Definition Television Quotas

• Free to air broadcasters are required to commence HDTV as soon as practicable after the commencement of digital services in a licence area (or part of a licence area);
• Within two years of commencement of digital transmissions, commercial and national broadcasters must provide at least 20 hours per week of HDTV programs;
• Commercial broadcasters must meet this target with material originally produced in HDTV. The HDTV requirements for the national broadcasters (ABC/SBS) are more flexible to take into account their diverse programming sources and may include upconverted SDTV material;
• A review will be held in 2003 on HDTV quotas and the provision of HDTV in remote areas.

Datacasting

• A new definition of datacasting is to be adopted which provides that a datacasting service is a service in the broadcasting services bands which cannot provide content in genres commonly regarded as free to air television e.g. drama, current affairs, sporting programs and events, music programs, infotainment and lifestyle programs, light entertainment and variety programs, compilation programs, quiz programs and games shows.

- Datacasters will be able to provide 10-minute extracts of these categories of television programs, as long as the extracts are not self-contained, and cannot be combined to form a television program;
- News, sports news, financial, market and business information, and weather may be provided in ten minute headline bulletins. A program of any length on an individual news item or sports news item, weather and business information, may be provided as long as the program is only available to a viewer selecting from a menu on the screen, is not presented by a host and is not linked to another item;
- Outside the restricted genres, datacasters will be able to provide any services, such as information programs where the sole or dominant purpose is to provide information on products, services and activities; interactive home shopping; banking and bill paying; Internet web sites; electronic mail; education services; interactive games and Parliamentary broadcasts.

Program enhancements

• Free to air broadcasters will be allowed to provide digital enhancements to their main simulcast programs, provided that:
- the enhancements do not together constitute a separate television channel;
- there is a direct and obvious linkage between the enhancement and the program to which is linked;
- enhancements are contemporaneous with the simulcast programs to which they are linked.

• Multichannelling will be allowed by free to air broadcasters in dealing with ‘overlaps’ - for example to allow the end of a sporting match to be shown even if it runs over time and clashes with a news bulletin which commences at its scheduled time.

Captioning

• FTA broadcasters must caption all prime time programs (6-10.30pm) and all news and current affairs programs (apart from those programs in a language other than English, or providing music only).

Underserved Areas

• Provisions will be made to enable additional digital services to be provided in licence areas that currently have one or two licences.

Spectrum Planning

• The current provisions in the BSA relating to the hand-back of channels at the end of the simulcast period will be amended to allow the ABA more flexibility to determine which channels the broadcasters use once analog transmissions cease.


The attached Regulation Impact Statement (RIS) broadly follow the framework of the reviews, consider the various options discussed in those reviews and provide an analysis of the decisions.

No regulatory amendments have arisen from the reviews concerning multichannelling by the ABC and SBS, retransmission of digital services on subscription broadcasting, and convergence. Accordingly, matters addressed in those reviews are not addressed in the following RIS.
DATACASTING & ENHANCED PROGRAMMING

Background

The policy boundaries for these reviews were set by the Broadcasting Services Act 1992 (BSA). A number of provisions of the BSA require that a regulatory distinction between broadcasting and datacasting be determined. In summary, the Act provides for the following:

• There should be no new commercial television broadcasting licenses allocated prior to 2007 (section 28).
- This provision would be breached if datacasting services by players other than FTA broadcasters were such that they constituted de facto television broadcasting services.
• FTA broadcasters must not provide multichannel television broadcasting services, at least during the simulcast period (subclause 7(1)(m) of Schedule 2, subclause 35(1) of Schedule 4).
- This provision would be breached if datacasting services by FTA broadcasters were such that they constituted a separate television channel.
• FTA broadcasters must not use their digital channels to transmit certain other kinds of broadcasting services including radio services (subclause 7(1)(p) of Schedule 2, subclause 36(1) of Schedule 4).
- This provision would be breached if datacasting by FTA broadcasters became a means of transmitting other broadcasting services, such as a radio service.

Subclause 59(1)(dd) of Schedule 4 of the BSA requires the Minister for Communications, Information Technology and the Arts to cause to be conducted, before 1 January 2000, a review into:

‘whether any amendments of the laws of the Commonwealth should be made to deal with the scope of the services that are categorised as datacasting services.’

This review examined, amongst other things, ways of distinguishing between datacasting services and broadcasting services in the context of the legislative provisions listed above.

In addition, subclauses 59(1)(da) and (db) of Schedule 4 require the Minister to cause to be conducted a review into:

‘whether any amendments of laws of the Commonwealth should be made in order to allow a commercial television broadcasting licensee [or national broadcaster] to broadcast a television program in digital mode during the simulcast period for a licence area, where the program is incidental and directly linked to a program that is broadcast simultaneously by the licensee in both analog mode and digital mode in that area.’

This review examined the types of services which should be provided as program enhancements.

B1 Issues

Datacasting and enhanced services will add to the attractiveness of digital television, providing valuable new services for consumers, new commercial opportunities for broadcasters and other prospective datacasters, helping to speed up the conversion process and the eventual return to the Commonwealth of analog television spectrum.

The issue is to determine how datacasting, broadcasting and enhanced programming can be effectively distinguished, given the policy parameters already set by Government and endorsed by Parliament in the 1998 digital television legislation (listed above). In addition, datacasting needs to be clearly distinguished from broadcasting as FTA broadcasters will be charged a fee for the provision of datacasting services under the Datacasting Charge (Imposition) Act 1998.

A further issue is how datacasting services should be licensed and regulated. Broadcasting services are licensed under the BSA according to several categories, with the level of regulation differing according to the influence of the services. Subsection 4(1) of the BSA states:

‘The Parliament intends that different levels of regulatory control be applied across the range of broadcasting services according to the degree of influence that different types of broadcasting services are able to exert in shaping community views in Australia.’

Commercial broadcasting services are the most highly regulated, being those with the greatest influence. Subscription broadcasting services, which are controlled through subscriber management and conditional access systems, are less regulated. Services with much smaller audience reaches, or which serve particular niche sectors of the community, operate under class licences with relatively few licence conditions.

In contrast, services primarily aimed at providing connectivity, such as Internet carriage services, are for the most part not regulated under the BSA. A form of content regulation, aimed at limiting certain categories of undesirable material on the Internet, is provided through Schedule 5 of the BSA.

Datacasting services are a new kind of services which are likely to have elements which are like broadcasting services, and others which are more like Internet and related services. The changing nature of digital services may, over time, call into question the traditional ways of regulating broadcasting and similar services, as new ways of providing entertainment and information to audiences are developed. An issue is therefore whether datacasting should be regulated under the BSA, and if so to what extent. Judgements on this issue will also be influenced by the degree to which the appearance and content of the service is the main means of distinguishing ‘broadcasting services’ from ‘datacasting services’ for the purposes of regulation.

The Government agreed in 1998 to make available spare channels in the broadcasting services bands spectrum, not needed for the conversion to digital television, to be made available through competitive allocation for the provision of datacasting services. However the Government decided not to allow free to air broadcasters to bid for this spare spectrum. An associated regulatory issue is whether to maintain this prohibition, or allow more open competition for the purchase of datacasting spectrum.

B2 Objective

The overall objective is to manage the transition from analog to digital television broadcasting, in a way which minimises disruption to consumers, and maintains existing high quality television services, but which also uses the opportunities digital technology provides to develop innovative, new digital services. This objective needs to be reflected in the regulatory framework for broadcasting, datacasting and enhanced services, in a way which is consistent with the requirements that no new commercial FTA broadcasts are licensed before 31 December 2006 and that there is no multichannelling by FTA broadcasters prior to a review before the end of 2005.

B3 Options

1. Distinguishing datacasting from broadcasting:

(a) Retain current definitions in the BSA: The BSA already includes definitions of broadcasting and datacasting. The issue is whether the existing definitions provide an adequate basis for distinguishing clearly between broadcasting and datacasting services.

(b) The appearance of the transmitted material: This approach presumes that a television broadcast provides programs that have certain characteristics that define them as ‘television’. If these characteristics can be defined more specifically, this may enable types of services to be defined as constituting datacasting or broadcasting - the argument being that a datacasting service must not be a service which ‘looks and feels’ like a broadcasting service.

(c) The level of ‘interactivity’ the service offers: This approach bases the distinction between broadcasting and datacasting on whether or not the services involves interactivity (i.e., exchange of information) between the user and the program originator, and encompasses whether or not the service is provided ‘on demand’ – that is, at the request of the recipient or user.

(d) Whether or not the service is subscription based: If datacasting services were only provided on a subscription basis this would potentially provide a clear distinction from free to air television services.

(e) Limiting bandwidth: Limiting the bandwidth or channel capacity available to any one datacaster could technically limit the type of services a datacaster might provide.

2. Licensing Datacasting

(a) License datacasting services under the BSA, in a similar fashion to individually-licensed broadcasting services, with appropriate obligations and penalties;

(b) Treat datacasting licences in a way which is consistent with the approach taken for Internet services, with limited content regulations designed to (for example) control undesirable material, but without requiring individual service licences.

3. Control Provisions

(a) Maintain the current prohibition on commercial and national FTA broadcasters purchasing or controlling spare spectrum channels;

(b) Allow open competition among all players for spare spectrum.

4. Enhanced programming

(a) Provide no distinction between enhanced services and datacasting: This approach would in effect treat all enhanced services as a form of datacasting and thus subject to a datacasting charge as proposed in the Datacasting Charge (Imposition) Act 1998. It would also mean that enhanced programming would be constrained by whatever restrictions apply to datacasting.

(b) Require a temporal and/or content link between the program on the main channel and the program enhancement. A temporal or content link would limit what is shown as an enhancement to content which could be directly linked to programming provided on the simulcast channel.

B4 Impact analysis

The groups potentially affected by the definition and regulation of datacasting and enhanced programming are:

• FTA broadcasters
• Aspirant datacasters
• Subscription television broadcasters
• Internet companies
• Consumers / viewers
• The ABA (as the regulatory body for content issues) and the ACA which will oversee allocation of datacasting spectrum.

1. Distinguishing datacasting from broadcasting:

(a) Make no amendments to the BSA

This option could be construed as a ‘no change’ option. This option was supported by some aspirant datacasters who favoured no change to the existing framework. However, whether or not the present definitions can be practically applied would depend on judgements about the legal scope of the term ‘broadcasting’, and also the scope of the term ‘program’ in the BSA – which currently appears to be very wide. The range of views expressed in submissions suggests that, at least to some commentators, these definitions are inadequate to provide any certainty.

The current definition of datacasting is limited to those services that are not broadcasting. If the legal interpretation of the current definition of broadcasting in the BSA was very broad in scope then the nature of the services that could be offered as datacasting would be highly limited. A narrow definition of datacasting could limit investment in the development of attractive and commercially viable datacasting services.

Currently, there is no licensing arrangement for datacasting in the BSA. Without legislative amendment, datacasting services would not be regulated through a licensing regime.

Stakeholder impact

FTA broadcasters and pay TV operators would face competition from datacasters who would be largely unregulated, and who could provide a variety of ‘broadcasting-like’ services. Aspirant datacasters would benefit from being able to provide a wide range of services with possibly little restriction. Consumers could benefit from new services, but could face a reduction in the quality of existing broadcasting services and the availability of local content (due to reduced investment in content production by broadcasters). As datacasting would be unlicensed, there would be limited means of enforcing service conditions or protection of consumers.

(b) Appearance of the material

A definition of ‘look and feel’ requires analysis of the characteristics which define ‘television’. This could be achieved through technical parameters. Such parameters may be ‘real time delivery’, frame rate requirements or bandwidth used. Alternatively, content/genre distinctions could be made.

An approach based on a quantitative limit on video content addresses the ‘look and feel’ aspect of television (i.e. the main characteristic of the medium is a continuous stream of video programming). Proposals for a maximum of 10 minutes of continuous video in any one hour could provide for some video content without allowing the continuous stream of video which characterises television. Although this option could ensure that datacasting does not have the appearance of television, it places an arbitrary constraint on the scope of datacasting services, which could constrain the provision of a range of multimedia options. It would also be very difficult to enforce in an interactive service offering viewers some control over what they see and when.

An approach based on identifying those genres of programming which comprise broadcast television has the advantage of not imposing any arbitrary technical limits on datacasting, while at the same time ensuring that datacasters offer new and innovative services rather than still ‘more of the same’. However, the precise boundaries of program genres are difficult to define. The impact of this approach on industry and consumers will depend on what genres are allowed.

There was a strong view in some submissions to the scope of datacasting review that the distinction between services should not be based upon specific technical criteria, as these would become redundant or anachronistic as technology developed, and might unintentionally inhibit innovation.

Commercial broadcasters proposed in submissions to the datacasting review that any material that has the ‘look and feel’ of television, including material that ‘entertains,’ should be not be provided by datacasters. They argued that datacasting services should deliver ‘information’ (that is, text, data and still images) and not ‘entertainment’ which is primarily shown for entertainment or dramatic value (that is, television programs comprising moving images). They identified program types that should be excluded from datacasting - including drama, comedy, animated programs, game shows, sports broadcasts and chat shows.

Other submissions suggested that the ‘look and feel’ approach has limitations as a means of distinguishing broadcasting and datacasting. For example, it has been suggested that a ‘look and feel’ test is inadequate because the ‘look and feel’ of broadcasting cannot be articulated with specificity, and technological developments are likely to change the fundamental nature of television and its ‘look and feel’.

The issue of the proportion of video or moving images was also raised as a distinguishing factor in a ‘look and feel’ approach. Commercial broadcasters proposed both time limits and frame rate limits on the proportion of video in datacasting, and suggested that in any 30 minutes of datacasting only 10 minutes should consist of moving images, which are limited to one quarter of the screen area. Other submissions suggested a limit of 10 minutes of video any 30-minute period, while otherwise proposing a broad interpretation of datacasting.

Stakeholder impact

Impact will depend on the content restrictions adopted. This approach could provide a degree of protection to free to air broadcasters, in relation to their traditional entertainment programs. Datacasters would be restricted in terms of the services they could provide. The impact on consumers would depend on the nature of the restrictions, and whether they would allow useful and attractive datacasting services to emerge.

(c) Interactivity

This approach is based on the assumption that broadcasting is currently characterised as a non-interactive service, where the viewer has no direct control over the material being delivered, and where timing and scheduling of delivery of material is entirely at the control of the broadcaster. In contrast, data services such as those provided by the Internet involve some degree of immediate electronic communication and interaction between viewer and service provider.

This approach raises a number of issues. First, it appears to assume that interactivity is likely to be a widespread feature of datacasting services. However there are a number of successful ‘carousel’ point to multipoint datacasting models operating or being developed overseas which do not involve direct interactivity between user and service provider, and these could be excluded under this option. Such simple non-interactive models may well offer a viable and desirable approach to datacasting in Australia, particularly from a consumer perspective.

On the other hand, this option would allow the delivery of services which are very similar to current television services – such as video-on-demand – which may be inconsistent with the requirement that datacasting services not be a back-door method of providing FTA broadcasting services. In any case, the concepts of ‘interactivity’ and ‘on demand’ are becoming blurred by technological developments and are increasingly difficult to determine.

This option was supported by several submissions. It was suggested that services, such as Internet, cache services and electronic commerce should be excluded from broadcasting. Those submissions proposing interactivity as the main distinguishing feature of datacasting used a liberal definition of ‘interactivity’ - including services where the viewer simply selects from amongst a range of content downloaded and stored in the receiver.

Stakeholder impact

Stakeholder impacts will depend on the precise way this model is implemented. Potentially, this option would not stop datacasters providing television programs through interactive means, which would benefit datacasters but could impact negatively on FTA broadcasters and pay TV operators (who are increasingly providing near video on demand). Consumers would get some new services, but could be affected if the model resulted in consumers needing special, more expensive equipment with the additional features needed to receive interactive datacasting.

(d) All datacasting to be subscription-based

This approach would allow datacasters to deliver any service they chose, provided it was a subscription based service. This approach is consistent with the moratorium on the issue of new commercial television broadcasting licenses before 2007. It would also provide datacasters with a high level of freedom to provide services to consumers within a subscription framework. Some datacasting models are, however, based on a free to air and advertising revenue-based approach, which would not be permitted under this model.

The advantages of this approach, and its ease of implementation, would depend on the detail. It could make datacasting services more flexible, and thus improve the business case for datacasting, but maintain a clear distinction between these services and commercial FTA services. A general concern with this approach is that it could be conceived as being against the intent of the policy of not allowing new broadcasting services during the digital conversion process. In addition, this option would restrict the provision of such services to consumers who could afford them.

Stakeholder impact

This option could mean that consumers are offered a wide range of new services, but only if they are prepared/able to pay for them. Availability of free to air (advertiser funded) datacasting may be limited. Datacasters would be restricted to subscription-only models, and may have to provide consumers with special equipment with conditional access systems. This approach would afford a measure of protection for FTA broadcasters, but could impact negatively on pay TV services if datacasters provided little more than pay TV channels.

(e) Limiting bandwidth available to datacasters

This approach involves allocating to any one datacaster only a small portion of the available transmission capacity in each datacasting channel. For example, a datacaster could be limited to (say) one fifth of the available capacity. This approach would constrain the range and quality of the services that datacasters could provide, but it may not ultimately stop datacasters from providing television programs to viewers. Video programming can be provided at low bit rates, taking a fairly small proportion of the total capacity available in any channel.

This approach provides a technical constraint that would act on all services offered by the datacaster and not just those considered broadcast television. As such it could act as a general constraint on innovation in datacasting.

An advantage of this approach is that the available channels for datacasting would be split between a number of (smaller) providers increasing the competition between datacasters and lowering one of the barriers to entry. However, it is doubtful whether these smaller datacasters could offer services which would be competitive with the datacasting offered on main television channels.

Stakeholder impact

Under this option, datacasters would not have sufficient bandwidth to provide a wide variety of niche services to different customer groups at the same time. They would not be able to allow them to offer new kinds of services which are different from the mass-appeal commercial television services. However, spectrum capacity could be available to a greater number of datacasters (as each would only be allowed a limited amount). As this model would still allow some traditional television to be delivered by datacasters, broadcasters could be faced with some increased competition. The new services for consumers would be restricted by bandwidth limitations.

2. Licensing Datacasting

(a) License datacasting services under the BSA

Datacasting services are expected to comprise a mixture of free to air and subscription services. Datacasting services will have considerable reach, particularly in densely populated areas such as capital cities, which could eventually extend to millions of people depending on the transmission network. Most datacasting services will be received on commonly available digital television reception equipment, through ordinary television aerials. Thus, barriers to reception of datacasting (over and above reception of digital television) will be relatively small. Over time, such services may have a potential audience reach approaching commercial television services.

It can therefore be argued that similar regulatory obligations should be placed on datacasters as applies to broadcasters. Datacasting services might not compare in terms of reach and influence with those of commercial broadcasters, and the audiences are likely to be more fragmented. There are strong arguments however that datacasting services should be licensed and regulated, at least to the same degree as pay television services. Datacasting services are likely to be provided by commercial free to air broadcasters alongside their normal television programs. It may be difficult to justify having significantly different regulatory regimes for two services providing related content to the same audience.

A counter argument is that datacasting services may look quite similar to the Internet, with multimedia content and with Internet services such as e-mail. A case can therefore be made that such services should be regulated only to the same extent as Internet services, which may be their main competition. A more flexible regulatory regime could also increase the chances of successful datacasting services being established which deliver innovative services to consumers.

If a decision is made to distinguish datacasting from broadcasting by reference to the type of material being transmitted (e.g. the program genres), then an appropriate regulatory and enforcement regime would need to be put in place to ensure that datacasters do not provide de facto broadcasting services by providing prohibited genres. This would lend weight to the view that datacasting should be licensed, and that there should be penalties for providing unlicensed services as there are in the case of broadcasting services.

A further possibility is that different service providers or classes of datacasting could be regulated differently, in similar fashion to broadcasting services, depending on the nature of the service and whether the provider also operates a commercial or national television service. However, this option could considerably add to regulatory complexity and uncertainty, and could pose uncompetitive outcomes to the extent that it treats organisations differently.

Stakeholder impact

Licensing has the potential to impose restrictions of various kinds on service providers, which will limit the services they can provide (depending on the type of restrictions enforced). On the other hand, licensing provides a mechanism for achieving particular economic or social objectives such as protecting consumers from undesirable content, and fostering the development of particular kinds of services or content.

(b) Treat datacasting licences consistent with the approach taken for Internet services

The arguments for and against option (b) are the opposite of those for option (a) above.

3. Control Provisions

The decision not to allow FTA broadcasters to purchase spare spectrum recognises that these broadcasters will be loaned, free of upfront and ongoing charge, sufficient spectrum channels to enable their digital services to match the coverage of their existing analog services. They may use any spare capacity within these channels for datacasting services. Allowing them to bid for any spare spectrum may restrict the development of new, innovative datacasting services by new players for the benefit of consumers.

On the other hand, allowing broadcasters to bid for, or control, spare spectrum would allow the market to determine the value of the spectrum and the new services, and could increase competition for, and therefore the revenue to the Commonwealth from, any spare spectrum. It would maximise the opportunity for broadcasters to build on their existing skills to exploit the new digital broadcast technologies.

A key issue is the extent to which control measures are applied. If the restriction on FTA broadcasters is limited to purchasing spectrum (and not to controlling it), there is a risk that broadcasters will use other approaches to directly control either the owners and operators of the new services, or to supply all the content. This could circumvent the spirit of the restriction. On the other hand, it could be of benefit to consumers if datacasters are able to source substantial proportions of their content from FTA broadcasters.

4. Enhanced Programming

(a) Provide no distinction between datacasting and enhanced services

This option would not involve establishing a separate category of ‘enhanced services’ – all services would be either broadcasting or datacasting. The impact of such an option would depend on the regime for datacasting and what can be provided as datacasting services. If a narrow definition of datacasting were adopted, additional digital services by broadcasters would be restricted, and options such as second camera angles of sporting events may not be able to be provided. However, to the extent that enhancements constitute an ‘overlap’ area which is partially broadcasting and partially datacasting, this option would allow a clearer regulatory boundary to be drawn between different categories of digital services.

(b) Require a temporal and/or content link between the program on the main channel and the program enhancement

This approach would allow broadcasters to provide alternative views of and additional information about whatever was being presented on the main channel. It could therefore add value to the main channel by providing new services to consumers. However, it would still limit the service to enhancements of the main channel rather than allowing a distinctive and separate service such as would be allowed by full multichannelling. It would therefore constrain to some extent the content which could be provided by FTA broadcasters and achieve the objective of preventing de facto multichannelling.

Stakeholder impact

FTA broadcasters would benefit from being able to transmit additional digital services, which could potentially increase the number of viewers and (in the case of commercial services) advertising revenue. The more these services are restricted, the smaller the potential benefit to broadcasters. However, an issue for commercial broadcasters is that enhancements potentially divert viewers from the main broadcast channel, where the main advertising stream would be shown. Consumers would benefit from program enhancements. Enhancements could impact negatively on datacasters, in that enhancements could provide a means for broadcasters to deliver datacasting-like material but avoid the datacasting charge (which is intended to achieve competitive neutrality between broadcasters and datacasters).

B5 Consultation

The conduct of the reviews and the recommendations arising from them has involved extensive consultation with stakeholders including the Federation of Australian Commercial Television Stations (FACTS), individual commercial and national television broadcasters, the Australian Subscription Television and Radio Association (ASTRA), individual providers of subscription television, News Ltd and Fairfax, Internet service providers, the telecommunications carriers, receiver manufacturers, peak information and communications technology associations, and groups representing the interests of consumers. Discussion papers and submissions were also made available to the public on the Department of Communications, Information Technology and the Arts (DCITA) web site.

A consultants’ study was commissioned by DCITA in November 1998 to advise on local and international developments in datacasting. The report entitled ‘The Development of Datacasting Technologies and Services’ was released publicly in March 1999. The report examined developments in relevant technologies and canvassed possible future directions for the development of ‘datacasting like’ services.

1. Defining datacasting

Commercial free to air broadcasters are concerned to ensure that datacasters do not provide a service which is in any way similar to television. They see the key characteristic of television as the provision of continuous video and have argued that significant restrictions should be placed on the amount of video which datacasters can provide. They also argue that datacasting should be primarily a subscription service and that each datacaster should be provided with only a limited amount of spectrum (which would place a further technical restriction on the ability to provide video services).

Aspirant datacasters stress the importance of allowing datacasting services to grow and develop without unnecessary regulatory constraints. It is argued that a key difference between broadcasting and datacasting is not the amount of video but rather the level of interactivity – that is, the degree to which the viewer can interact with the incoming material, by selecting the particular content they want, when they want it. In contrast, traditional television is a passive experience – the viewer watches what is provided by the broadcaster, when the broadcaster chooses to provide it, and has no involvement beyond changing channels.

2. Licensing Datacasting

There is general agreement amongst potential new entrants to the datacasting market that datacasting regulation should be minimal and flexible in order to stimulate new market growth and investment in new digital infrastructure. However, submissions to the review on the scope of datacasting took different views on the how this might be achieved. Some submissions considered that datacasting services should be regulated in a way which is consistent with the online environment and that regulation should be technology neutral, in order to promote consistency between industries that are moving towards convergence. It was argued that regulatory intervention in the industry is counter productive to its efficient growth, to encouraging competition and to the circulation of the widest possible spread of information and opinions through the community.

In contrast, broadcasters (both free to air and subscription) argued for a more restrictive regulatory regime.

A number of submissions concluded that it is not practicable for datacasting to be subject to the full range of broadcasting content requirements. Others advocated different levels of regulation for different players, in order to correct market and regulatory distortions and to create a competitively neutral environment between FTA broadcasters and new players. For example some submissions considered that FTA broadcasters would have a ‘first mover’ advantage in providing datacasting, and should be constrained more heavily in the datacasting market than other datacasters, at least in the short term, in order to level the playing field between the players. Others suggested that regulatory controls be applied according to the ‘degree of influence’ the service is able to exert.

There was divided opinion on the appropriate body to regulate the new datacasting market. Submissions proposing light handed regulation of datacasting as a new information technology recommend that the Australian Communications Authority should regulate datacasting. Other submissions, favouring more regulation of content, proposed that the Australian Broadcasting Authority manage the emerging market.

3. Control Provisions

The details of the control framework were not addressed in the digital television reviews. Consultation on the general principle that free to air broadcasters should not be able to purchase spare datacasting spectrum channels took place in the context of the Television Broadcasting Services (Digital Conversion) Bill 1998. The restriction is supported by potential new datacasters.

4. Enhanced Programming

Commercial broadcasters argued for a flexible approach towards the content of enhanced programming and against a strong temporal link between enhancement and main program. Aspirant datacasters emphasised the importance of enhancements not being multichannelling. One datacaster proposed the elimination of the category of enhanced programming altogether on the grounds that such a category would give commercial broadcasters an excessive commercial advantage. Under this approach, the only additional services broadcasters could provide would be datacasting.

B6 Conclusion and recommended option

1. Distinction between datacasting and broadcasting

The legislated prohibition on new commercial television licenses before 31 December 2006 means that datacasting must be clearly distinguished from commercial television services. The definition of datacasting is limited to those services offered in the broadcasting services bands in order to minimise the impact on free to air broadcasters during the conversion period, but not to limit the delivery of such services using other delivery mechanisms.

Of the options canvassed, it is considered that the genre approach provides the best and clearest method of distinguishing datacasting. This option provides certainty for industry while offering consumers new services.

It is therefore proposed that datacasting services are prohibited from providing television programs in genres and formats commonly regarded as free to air television (e.g. drama, current affairs, sporting programs and events, music programs, infotainment and lifestyle programs, light entertainment and variety programs, compilation programs, quiz programs and games shows). However, subject to this requirement, datacasting may be free to air or subscription, or be either interactive or non-interactive.

A more flexible approach should be taken towards news, related programs such as business or finance information, and to other kinds of programs which are primarily aimed at providing information rather than entertainment. These information programs are likely to be important to the success of new datacasting services.

Outside the restricted genres, it is appropriate for datacasters to provide any services. This may include interactive home shopping; banking and bill paying; Internet web sites (provided the content is under the control of the datacaster); electronic mail; education services; interactive games and Parliamentary broadcasts.

Restricting the bandwidth available to datacasters would significantly constrain the services they are able to develop, but would not necessarily have the desired effect of stopping datacasters becoming broadcasters. Genre restrictions provide a more effective regulatory tool. Accordingly datacasters should have access to the full capacity of the available television channels (that is, 7 MHz) to maximise their ability to serve a wide variety of niche audiences.

2. Licensing datacasting

It is proposed that datacasting services be licensed, and that the licences be associated with conditions broadly similar to those for pay television licences, and for class licences. While these services will probably have a more fragmented audience than commercial broadcasting services, they will still be widely available often on a free to air basis, and should therefore meet content regulations which reflect community standards. A licensing regime would also provide a mechanism for regulating any restrictions on programming for datacasters, where these are used as the means of distinguishing broadcasting services from datacasting services.

The licensing regime for content licenses should be administered by the ABA. There should be an appropriate range of powers given to the ABA to administer the licensing system, and to take action against provision of unlicensed services, or breaches of licence conditions.

3. Control Provisions

Broadcasters have been loaned spectrum free of charge, to facilitate the conversion of analog services to digital. The spectrum used for analog television will be returned to the Commonwealth at the end of the simulcast period. In contrast, datacasters will have to bid for spectrum on the open market, and the number of channels available may be limited by the requirement to provide for both analog and digital television services. Accordingly, it is appropriate that commercial and national broadcasters are not allowed to purchase the additional channels made available for datacasters.

It is proposed, therefore, to continue to implement the announced policy which restricts broadcasters from purchasing spare digital spectrum. This will be underpinned by regulations that prevent broadcasters from having control over datacasters, and vice versa, and to prevent broadcasters from providing a majority of the content on datacasting channels.

4. Enhanced Programming

FTA broadcasters should be allowed to provide enhancements provided these are directly linked to the main (simulcast) digital programs. A key part of ‘directly linked’ will be ensuring the enhancement is provided within the same time period as the main program. Therefore, enhancements should be contemporaneous to the programs to which they are linked. In addition, enhancements should be extended to allow a limited form of overlapping of programs, where events extend into other scheduled programs because of circumstances outside the broadcaster’s control.

B7 Implementation and Review

Datacasting

The proposed arrangements will be implemented through amendments to the BSA. The ABA will be responsible administering the arrangements, and the ACA for the allocation and licensing of apparatus licences. The Minister must cause a review to be conducted of the regulatory arrangements before the beginning of 2004.

Enhanced programming

The proposed arrangements will be implemented through amendments to the BSA.

DIGITAL TELEVISION FORMATS AND QUOTAS

Background

Part 4 of Schedule 4 to the BSA stipulates that regulations must require free to air (FTA) broadcasters in non-remote areas to meet specified goals or targets in relation to the extent to which television programs are transmitted in digital mode in one or more specified HDTV formats. This requirement does not apply to analog transmissions.

If HDTV standards are contravened, FTA broadcasters (both national and commercial) are required to surrender the transmitter licence authorising digital television transmissions, unless the licence holder can satisfy the Australian Broadcasting Authority (ABA) that there are exceptional circumstances. A replacement transmitter licence can be issued to the broadcaster concerned, provided that it authorises a lesser transmission capacity (i.e. transmission bit rate) than the licence it replaces (this is intended to have the effect of removing the technical capacity of the broadcaster to provide HDTV, even if it wished to provide such services).

The legislation recognises that different arrangements in respect of HDTV may need to apply in remote areas. For example, conversion of direct-to-the-home satellite receivers and community self-help retransmitters to enable them to handle HDTV transmissions is likely to have significant implications for remote communities. Accordingly, Part 4 of Schedule 4 provides that the regulations may (rather than must) also determine standards relating to levels of HDTV programming that broadcasters in remote areas will be required to transmit.

HDTV provides pictures with a much higher resolution than SDTV and this improvement is most evident on larger screens where to lower level of picture information on an SDTV is easily seen. The superior viewing experience from a typical HDTV picture is possible because the HDTV picture contains more than twice the information (or detail) of a comparable SDTV picture. The HDTV viewing experience can also be enhanced by combining it with improved (surround) sound quality.

A digital SDTV service will produce a generally superior picture from an analog SD signal but cannot reproduce the fine detail of an HD picture nor does it display as well on a large screen. HDTV requires between 50% and 90% of the capacity of the (7 MHz) digital channel depending on the HD format being transmitted. An SDTV signal that produces a picture quality at least equivalent to the best PAL signal requires about 20-25% of a full digital channel.

The interactivity that is expected to be a prominent feature of digital services is not dependent on the transmission format. This interactivity will normally be supported by a modem in the set top box or integrated receiver providing a telephone back channel for responses to offers or choices. Most of the apparent interactivity on offer by the digital system will involve selection between different services offered uniformly to all viewers and will not require a back channel. This apparent interactivity arises from the capacity of the digital system to deliver many more services in the same channel capacity normally required for a single analog service.

HDTV receivers will be capable of decoding both SD and HD programming. In contrast, the less complex but cheaper SDTV receivers will only decode SD programming and will go blank if only an HDTV signal is available. The consumer response to digital television will be influenced by, amongst other things, the cost of the receivers and consumer expectations about the services likely to be available on the receiver. Clearly consumers are unlikely to be happy with receivers which periodically go blank during normal service times. Broadcaster decisions and Government requirements related to digital television transmission formats would have a significant influence on types of receivers brought to market by manufacturers and sought by consumers.

A commitment to the provision of HDTV services does not preclude the provision of similar services in SDTV. Indeed, SDTV can be seen as both an important intermediate step in the transition to HDTV and an important option for consumers in the period when HDTV receivers entail a significant price premium.

B1 Issues

The Government mandated the provision of HDTV in 1998 and a review was conducted in 1999 to determine the arrangements to apply to this requirement. In considering regulations which may apply to the transmission of HDTV, a number of issues were considered:

• The possible approaches to defining HDTV formats - the broadcasting sector has traditionally operated on a number of industry agreed standards for the broadcast and display of television services. Such standards ensure the interoperability of equipment, the quality of services and access to international technology. In the case of the existing analog system Australia adopted the European PAL standard. Following extensive consideration of the international standards available for digital television, Australian broadcasters in co-operation with other stakeholders selected the European DVB standard. The issue addressed in this case is whether industry or consumers might be better served by some variation or subset of the broad definition of HDTV provided in the international standards;

• The desirability or necessity of setting HDTV standards in regulation or legislation – in this case the question is whether any of these standards need to be set in regulation or legislation, either to ensure adherence to these standards and any associated requirements based on these standards, or to provide certainty to industry or consumers;

• The practical considerations in relation to:
– the timing of the commencement of HDTV transmissions;
The BSA requires that digital transmissions should commence in capital cities on 1 January 2001. This requirement does not specify the format of transmissions. There are significant differences in the availability and cost of HDTV and SDTV equipment and programming which may argue for a distinction between the commencement requirements for SDTV and HDTV. SDTV equipment is now generally available while much of the HDTV equipment has only recently become available in the USA and has not been modified to meet Australian specifications. HDTV equipment generally commands a price premium both because of its higher complexity and because it is a new and high end product.
– how any requirements might change over time;
Prices and availability of HDTV equipment and programming are expected to improve significantly over the first few years of digital transmission. This may suggest the need for requirements which are responsive to the changing conditions.
– the proportion of HDTV provided;
It is anticipated that broadcasters will provide a mixture of SDTV and HDTV programming. The BSA requires regulation of the amount of HDTV.
– HDTV requirements for prime time viewing, specific program genres, or local
content.
These last three questions examine whether there is any viewer benefit to be addressed by requiring HDTV at certain times or in certain program types (including locally produced programming).

• Whether or not HDTV quotas should discriminate between HDTV originated product (material produced using HDTV equipment, or derived from 35 mm film) and ‘upconverted’ HDTV (digitally enhanced standard definition programming transmitted in a HD format). There is a need to determine, therefore, whether upconverted material is consistent with the Government’s intent that FTA broadcasters should provide ‘cinema quality’ HDTV and whether such material would meet viewer expectations about the quality of HDTV programming.);

• Whether the position of national and regional broadcasters warrants any special treatment - the BSA recognises different conditions for national and regional broadcasters (e.g. conversion schemes, commencement date). The issue here is whether some distinction should also be made for the provision of HDTV;

• The conditions that should apply to remote areas - the BSA does not provide conditions for conversion plans for remote areas. However, in relation to HDTV, the BSA states that regulations may require HDTV standards for remote services; and

• Whether broadcasters should be required to provide a continuous SDTV signal. This would mean that even when programming was provided in HDTV format a separate SDTV signal would also be required to deliver the same programming.

B2 Objective

The objective is to develop an appropriate set of requirements for the transmission of HDTV and SDTV by free to air broadcasters, as required by the BSA, which ensure the availability of HDTV programs for those who wish to purchase HDTV receivers, but which also allow low cost options for consumers. Any requirements for HDTV and SDTV should also seek to maximise viewer benefit from the implementation of digital television, encourage uptake of digital receivers, avoid unnecessary or excessive cost impositions on broadcasters and ensure that the format regulations do not impair other objectives of the conversion process.

B3 Options

1. HDTV Formats and Regulation

a) The Government endorse the transmission standards, including those for HDTV, agreed by industry through Standards Australia^[1] (SA) and reflect these in regulations (or legislation).
b) The Government endorse the transmission standards, including those for HDTV, agreed by industry through Standards Australia and provide a power within the BSA for the Minister to make regulation in the event that such regulation proves necessary.
c) Regulate according to the lowest practical format consistent with the agreed international standards^[2] as a minimum level and leave the use of higher formats as an option for industry. (A variation is to define minimum standards for HDTV higher than the minimum proposed by industry.)
d) Set one HDTV format with which all broadcasters must comply.

2. HDTV Goals and Targets

2.1 Originated and upconverted programming and targets

(a) HDTV targets specify the amount of originated HDTV material only (regulations could specify a minimum amount of originated HDTV material to be broadcast in any given period);
(b) Require, over a given period, an overall quota of HDTV programming which could be either upconverted from SDTV or originated HDTV and within this require a minimum but lesser amount of originated HDTV programming;
(c) Specify only a minimum quota of HDTV, but enable the broadcasters to determine whether and to what extent they provide originated HDTV material.

2.2 Prime time requirements

(a) Broadcasters be required by regulations to provide a minimum quantity of HDTV format programs during evening prime time viewing, regardless of the quantity of HDTV programs provided during the rest of the day.
(b) Do not specify any prime time targets.

2.3 Program genre requirements

(a) Specify in regulations the types and amount of programs that should be provided in HDTV;
(b) Do not specify any such requirement.

2.4 Timing of HDTV transmissions

(a) Require HDTV programming almost immediately after commencement of digital transmissions based on upconverted programming or a mixture of upconverted and originated material;
(b) Set a minimum amount of originated HDTV to be achieved by a nominated future date.

3. Provisions for National, Regional and Remote Broadcasters

3.1 National Broadcasters

(a) Allow more flexible HDTV targets for national broadcasters by reducing the amount of HDTV they are required to broadcast; allowing them greater flexibility about when they broadcast in HDTV; or allowing them to meet targets over different time frames;
(b) Require national broadcasters to meet the same targets as commercial broadcasters.

3.2 Regional Broadcasters

(a) Apply more flexible goals and targets to regional broadcasters.
(b) Require regional broadcasters to meet the same targets as metropolitan broadcasters.

3.3 Remote Broadcasters

(a) Specify HDTV requirements within time periods similar to those applying in regional licence areas.
(b) Outline a conversion to digital television without any HDTV requirements in remote licence areas.

4. Whether or not to require continuous SDTV transmission

(a) Require all HDTV programming to be simultaneously transmitted in SDTV format, providing continuous SDTV programming.
(b) Leaving provision of a SDTV signal during HDTV transmissions to the broadcasters.

B4 Impact Analysis

1. HDTV Formats and Regulation

(a) Endorse the transmission standards agreed by industry through SA and reflect these in regulations (or legislation).

The Standards Australia process has wide industry support. It gives broadcasters some choice in transmission formats and the ability to use formats, which respond to the nature of the content being transmitted. Manufacturers advise that there is no cost penalty associated with a requirement to ensure that receivers are capable of decoding a limited range of internationally recognised HDTV formats. As the agreement in SA involves both receiver manufacturers and broadcasters it is open to question whether the Government should regulate the transmission standard and whether it is sufficient to merely retain the power to do so in the event that it proves necessary. The latter course would allow the industry to agree to new approaches if technology developments demanded them without the need to seek legislative or regulatory amendments.

Regardless of the standards adopted all receivers brought into Australia will need to be modified to Australian conditions. In the case of a very basic SDTV receiver the modifications required are relatively minor. An HDTV receiver might require more extensive modification (especially software development) as the technology is at an early stage and is not extensively applied in Europe. Like almost all electronic equipment sold in Australia, SD and HD receivers are expected to be manufactured overseas.

(b) Endorse the transmission standards agreed by industry through SA and provide a power within the BSA for the Minister to intervene if required by setting regulations that define HDTV formats.

Under this approach the industry agreed standards would be endorsed by Government but not put into regulation. As all parties have indicated a commitment to the use of internationally recognised standards, it is not expected that formal regulation of formats should be required. However, if a disagreement were to arise the responsible Minister would have the power to intervene to require agreement and/or to protect the public interest.

(c) Set the lowest format, of the agreed standard, as a minimum level and leave the use of higher formats as an option for industry. (An alternative is to define a minimum format for HDTV higher than the minimum proposed by SA.)

This approach ensures a minimum format is set for HDTV in regulation but does not regulate additional formats, allowing flexibility for broadcasters and the receiver industry to provide programming and receivers determined by consumer demand. In practical terms it is not very different in effect from option 1(a).

The option to regulate a minimum standard for HDTV at a higher level than that agreed by industry was not explored further because the level agreed by industry is consistent with international standards.

(d) Set one HDTV format that all broadcasters must comply with.

This option would ensure that all programming is provided in one format and all receivers can receive and display that format. This could help minimise receiver costs to consumers, but would reduce flexibility for broadcasters to choose appropriate formats for different program types or adjust bit rate according to demand. Industry including manufacturers have indicated a strong preference for having a range of formats.

Provision of flexibility to broadcasters should improve the viewing experience of consumers as it will allow broadcasters to choose the format best suited to the programming. The additional flexibility in format choice is unlikely to affect receiver costs because the necessary chip sets are sourced internationally and are designed to meet the normal range of formats required by broadcasters and television set manufacturers.

HDTV Goals and Targets

2.1 Originated and upconverted programming and targets

(a) Limit HDTV targets only to material produced in HDTV format (regulations could specify a minimum amount of originated HDTV material to be broadcast in any given period).

It is generally acknowledged that the full benefits of HDTV can only be realised using originated rather than upconverted material. However, the transmission of originated HDTV programming will require broadcasters to upgrade a large proportion of their studio equipment and to obtain or make HDTV originated programming. Both these activities will require increased expenditure by the broadcasters. The amount of originated HDTV content currently available for purchase is significantly less than SDTV content. This is because SDTV content includes current analog programming. HDTV targets should take account of the amount of material currently available and likely to be produced in a suitable HDTV format.

The purpose of requiring the transmission of specified amounts of originated HDTV programming would be to ensure that those people who purchased HDTV capable equipment realise the full benefit of their investment. It would also realise the intention of the Government that HDTV should be an integral component of the digital television system.

(b) Require, over a given period, a certain amount of HDTV programming which could be either upconverted from SDTV or originated HDTV while still requiring some minimum but lesser amount of originated HDTV programming.

The central issue is whether it is necessary to include upconverted material in quota requirements and whether this would benefit viewers or penalise broadcasters.

The transmission of upconverted SDTV programming in an HDTV format is a relatively straightforward and low cost exercise. Content is sourced as, or produced in, analog or digital SD format, it is managed in the studio in SD format and upconverted just prior to transmission into an HD format. The overall quality of upconverted material depends critically on the quality of the original product and while rarely equal to originated product it can give an improved picture. However, the US experience suggests that much of the upconverted material performs poorly on large screens and does not meet viewer expectations. Upconversion will nevertheless play an essential role in HDTV simply because there are vast amounts of product not available in any form but SD.

Expanding HDTV transmission quotas to include upconverted programming would add an additional demand on broadcasters if there was also a requirement to continue to provide an SDTV signal of the same programming. Such a requirement would reduce the capacity for alternative services such as datacasting and enhanced programming in these periods. As indicated above the benefit to viewers of including a quota for upconverted programming is unclear.

(c) Specify a minimum quota of HDTV, but enable the broadcasters to determine whether and to what extent they provide originated HDTV material.

This option would reduce short-term costs to broadcasters but would probably mean that significant amounts of originated HDTV programming might not be available for some time, as it would reduce the pressure on broadcasters to make the necessary investments in HDTV product. Broadcasters have indicated that they would prefer to wait some time before acquiring the capability to broadcast originated HDTV, because of the likely high cost and uncertain availability of new ‘early generation’ HD capable studio equipment and the higher cost of purchasing programming in HDTV format. For these reasons they would prefer to have the option of offering only upconverted material in the short term.

This approach would address the uncertainties about the availability of sufficient suitable originated programming and the costs of equipment by allowing broadcasters to decide when and whether they offer originated HDTV. However it would leave potential purchasers of HDTV capable receivers uncertain about the nature and amount of HDTV programming that they are likely to receive and possibly reduce the rate of take-up of digital receivers.

2.2 Prime time requirements

(a) Broadcasters be required by regulations to provide a minimum quantity of HDTV format programs during evening prime time viewing, regardless of the quantity of HDTV programs provided during the rest of the day.

The intention of such a requirement would be to ensure that HDTV programming was available during period when the viewing audience was largest. The need for such a requirement is unclear, given that broadcasters are likely to provide much HDTV material during prime time. However, some prime time programs may not be produced in HDTV format, so this option could affect broadcasters’ scheduling decisions.

(b) Do not specify any prime time requirements.

It is likely that broadcasters would plan to put some HDTV broadcasts on during prime time because it would be their most expensive and highest quality programming. On the other hand, the retailers of HDTV receivers are likely to want to be able to demonstrate the performance of HDTV receivers during normal business hours. Some HD material (e.g. sport) will not be shown in prime time. Thus, prime time requirements might not fully serve the needs of consumers and retailers.

2.3 Program genre requirements

(a) Specify in regulations the types and amount of programs that should be provided in HDTV.

This approach would be aimed at ensuring that HDTV programming is not concentrated in a limited set of genres (e.g. foreign sourced films). This approach is advocated by those who see HDTV requirements tied to different genres as a means of ensuring that locally produced HDTV is supported by the broadcasters. Locally produced programming might include popular sports, lifestyle programs and drama series. Supporters of this approach point to the potential to use programming type requirements as an industry development measure.

This approach could give arise to higher cost by requiring HDTV transmission of programming not readily available in HDTV format or by requiring local production of programming at a point when production costs are higher. Genre-based quotas would need to reflect the suitability of the genre for HDTV format. Judgements about the suitability of certain genres for the HDTV format are likely to be subjective and not conducive to simple forms of regulation.

(b) Do not specify any programming type requirement.

The ability of broadcasters to minimise the cost of HDTV requirements would be enhanced by providing flexibility in relation to HDTV programming without subquotas for different types of programming. This flexibility would also allow broadcasters to concentrate HDTV programming in the genres that benefit most from the HDTV format and to respond to the needs of other groups such a retailers, as well as to consumer preferences.

2.4 Timing of HDTV transmissions

(a) Require HDTV programming almost immediately after commencement of digital transmissions based on upconverted programming or a mixture of upconverted and originated material.

The main benefit of this approach would be to ensure that HDTV services were available to potential buyers of receivers from commencement of digital services, and to retailers marketing HD equipment. Such a provision would require broadcasters to undertake a very rapid upgrade of studios in a period when suitable equipment would only just be available. The result is likely to be higher cost from the premium pricing of new equipment and possibly inferior technical solutions due to limited planning time. This equipment acquisition would also occur during a period when broadcasters are undertaking (and bearing the costs of) substantial transmission infrastructure upgrades.

(b) Set a minimum amount of originated HDTV to be achieved by a nominated future date.

HDTV broadcasting equipment compatible with Australian technical specifications is currently being developed. However, it is not clear that all the equipment required by the broadcasters will be available in the timeframes needed for the commencement of digital transmission on 1 January 2001. In contrast, most studios have already been upgraded to digital SDTV equipment. A flexible approach would allow the broadcasters to time their equipment acquisition according to the market for the supply of equipment, give them more time to assess and test equipment coming onto the market and allow them to better balance their investment in transmission and broadcast equipment. However, it would still set minimum targets to ensure that those investing in HDTV receivers get the premium product.

3. National, Regional and Remote Broadcasters

3.1 National Broadcasters

(a) Allow more flexible HDTV targets for national broadcasters.

Any reduction in the absolute HDTV requirement potentially frees transmission capacity for other services such as datacasting. This would allow the national broadcasters greater freedom to explore other forms of digital services to assist in meeting their charter obligations. However, a reduction in the amount of HDTV provided by national broadcasters over that provided the commercial broadcasters could call into question the Government’s commitment to HDTV.

Allowing national broadcasters a more flexible time period for achieving HDTV targets could reduce digital conversion costs for these broadcasters, and also recognises that national broadcasters will probably have access to less HDTV programming than commercial broadcasters in the short to medium term. National broadcasters source much of their programming from Europe, where there is little or no HDTV production.

(b) Requiring national broadcasters to meet the same targets as commercial broadcasters.

This would guarantee that viewers would obtain the maximum amount of HDTV programming. However, it would impose a cost burden on publicly funded broadcasters, and would be difficult to achieve given program availability.

3.2 Regional Broadcasters

(a) Apply more flexible goals and targets for regional broadcasters.

This approach would result in different treatment for metropolitan and regional viewers. The removal of any requirement for HDTV could result in savings for the regional broadcasters but would have implications for the way regional broadcasters obtain and retransmit programming obtained from the metropolitan stations under affiliation agreements. Regional viewers would receive less programming in HDTV format.

(b) Require regional broadcasters to meet the same targets as metropolitan broadcasters.

Special provisions are already proposed for regional broadcasters including a later start up date and possible funding support under the Regional Equalisation Plan. No strong argument for further differentiation between regional and metropolitan viewers has been made.

3.3 Remote Broadcasters

(a) Specify HDTV requirements within time periods similar to those applying in regional licence areas.

Remote areas of Australia are currently serviced via satellite. The satellite capacity to deliver these services would need to be considerably expanded to carry HDTV. At the same time all direct to home receivers would require upgrading and all terrestrial retransmission networks would also require an upgrade. These upgrades would involve individuals, communities and remote broadcasters in considerable expense.

(b) Outline a conversion to digital television without any HDTV requirements in remote licence areas.

Satellite services are increasingly transmitted in standard definition digital form until the final broadcast point. Direct to home services have been recently upgraded to digital receivers with analog displays. Terrestrial retransmission of satellite signals is in analog form. At this stage, a requirement that the final transmission should be in digital form could make possible a range of new services provided there was a reasonable uptake of digital receivers in remote communities but would come at significant cost to self-help retransmission facilities. The cost of the upgrade would include upgrade of transmission facilities in remote areas and upgrade of viewer receivers.

4. Whether or not to require continuous SDTV transmission

(a) Require the provision of continuous SDTV programming including during the broadcasting of HDTV programming.

The requirement for the provision of a continuous SDTV signal would ensure that SDTV receivers were able to decode all broadcast programming. This can only be achieved if there is a requirement that HDTV programming is simultaneously transmitted in SDTV format. Such an approach would allow consumers to choose whether they acquire a basic and lower cost SDTV receiver with an improved picture (compared to analog) and new digital services, or the significantly better picture quality but more expensive HDTV receiver.

This option would mean that in the periods when HDTV was transmitted, additional channel capacity would be required for the simultaneous SDTV signal. Providing SDTV during those periods when HDTV was transmitted would limit the broadcaster’s capacity to provide for other services and gain from the associated economic benefits. Broadcasters have suggested that once they allocate capacity for the SD and HD streams they would have only minimal bit rate for a minimal datacasting service and no capacity for video based enhancements to the programming.

Continuous SDTV should improve the take-up rate of digital television by ensuring that cheaper SDTV receivers do not go blank at certain times. The faster take-up rate and cheaper receivers would also assist the new (digital only) datacasters and could speed up the eventual return of the analog spectrum.

This approach would maintain the Government’s commitment to HDTV, while providing a transition path in the initial introductory phase when consumers are uncertain of the costs and benefits of digital television and HD capable digital receivers are costly.

(b) No action by Government leaving provision of an SDTV signal during HDTV transmissions up to the broadcasters.

The likely outcome of not requiring a continuous SDTV signal is that manufacturers and retailers would provide only HDTV capable receivers. This view is based on the fact that two of the three commercial free to air broadcasters and both national broadcasters have expressed a commitment to broadcasting in HDTV format and the view that the take-up of digital receivers will be in large part driven by the free to air offer. Aspirant datacasters have put forward a similar rationale when they have argued for either SDTV only or for a requirement for a continuous SDTV signal.

The USA experience where the Government does not regulate transmission standards also supports the above argument. US broadcasters do not transmit SD programming but rather offer HDTV programming based largely on upconverted SD material. US manufacturers offer only HDTV receivers for terrestrial reception.

The experience in the US also indicates that there is considerable consumer confusion regarding HDTV and the difference between HD and SD receivers, which may be slowing the take up of digital services. In addition, the amount of originated HDTV programming provided by broadcasters has been minimal, which has reduced the incentive to purchase digital receivers.

The absence of a requirement to provide a continuous SDTV signal would give broadcasters more capacity to offer other services such as datacasting and enhanced services during periods when HDTV transmission was provided and may encourage the broadcasters to provide more HDTV than required by the quota.

B5 Consultation

A discussion paper was released in December 1998 as part of the HDTV review that sought comment on a variety of issues in relation to possible standards, goals and targets for HDTV. The paper outlined possible approaches to defining HDTV formats and sought comments on a wide range of issues. Subsequently, an options paper was released in July 1999, followed consideration of the submissions from the initial discussion paper and further consultation with interested parties. The discussion and option papers and all submissions were made available on the Department of Communications, Information Technology and the Arts (DCITA) web site.

Consumers will be directly affected by the cost of digital television sets or set top boxes and the range and quality of the services that can be received on them. Decisions about what formats broadcasters should provide will influence consumer receiver choices. The conversion process will also impact on viewers. New and improved services for viewers should be progressively rolled out in each licence area in a manner which gives viewers confidence that they will continue to receive their existing services while making real and informed choices about how they should make the transition to digital television. Those viewers that elect to purchase HD receivers should receive a significantly improved viewing experience when viewing HDTV programming.

Early in the consultation process the FTA broadcasters indicated that they expected to provide a mixture of SDTV and HDTV transmissions fairly soon after the commencement of digital broadcasting. They indicated that they intended to provide either SDTV or HDTV (but not simultaneously) at different times of the day according to the type of programming being transmitted, the audience and the time of day. HDTV transmissions were to be produced by upconverting SDTV product immediately prior to broadcast (allowing studio production and program mixing to be undertaken in SDTV format). Originated HDTV was not expected to become available until sometime later.

There was, however, considerable disagreement among manufacturers, broadcasters and other groups about the final picture quality produced by upconverted programming. It was recognised that the picture quality of upconverted SDTV depended critically on the quality of the original programming. There was also concern in some quarters about the effects on picture quality when upconverted SDTV was downconverted at a receiver for display on a conventional television set.

There was nevertheless general agreement that the highest picture quality required originated HDTV programming (and a compatible display device). FTA broadcasters, while arguing that upconverted SDTV could produce very good quality pictures, acknowledged that they intended to move increasingly towards originated HDTV programming. Those arguing against an HDTV requirement did not dispute that originated HDTV programming could offer a much higher picture quality, rather they questioned the higher cost of HDTV receivers and display devices.

The FTA broadcasting industry, represented by FACTS, accepted the need for a transmission quota for HDTV but opposed any requirement that FTA broadcasters be required to produce or acquire HDTV originated material. Broadcasters proposed that goals and targets for HDTV should relate to the way in which programs are transmitted, not to production.

The subscription television industry argued that FTA broadcasters should, from commencement of digital transmission, provide 100% HDTV including upconverted material and a minimum of HDTV originated material. However, FTA broadcasters argued that they would need to rely on upconverted material due to the lack of local and overseas programming produced in HDTV format, and to allow stations to stagger their digital investment by purchasing HDTV production and processing equipment at a later stage.

Broadcasters suggested that market demand would eventually encourage transmission of HDTV originated programs and that such demand would grow as the number of digital televisions in the market place increases. In general, commercial FTA broadcasters have indicated support for a transmission regime that provides for HD and SD programming with the expectation that all receivers should be HDTV capable. One commercial broadcaster has indicated that it does not support this position and instead advocates an approach involving providing a continuous SD programming stream. Both commercial and national broadcasters are concerned that HDTV quotas combined with a requirement for a continuous SDTV signal will reduce their capacity to provide other digital services in their digital channel.

Some submissions to the HDTV review argued that a critical factor in the success of DTTB implementation would be picture and sound quality improvement, and that merely upconverting SDTV source material would not necessarily guarantee an improved picture quality on any receiver. In particular, submissions noted that an upconverted signal would need to be downconverted by a set top box for viewing on an analog receiver. They suggest that this ‘double conversion’ process would reduce picture quality.

Finally, FTA broadcasters suggested that any HDTV requirement should be applied flexibly so that it does not prevent the commercial broadcasters from providing enhanced programming and datacasting services. Flexibility would include setting quotas over weeks or months rather than requiring a minimum number of hours each and every day.

Receiver manufacturers and importers generally divide into those that strongly support HDTV as the most important potential driver of conversion and those that strongly support SDTV-only transmission based on well understood and available European technology. The competitive position of manufacturers will be influenced by the transmission formats selected. Equipment suppliers would be adversely affected by a slow uptake of receivers by consumers, however, this risk is reduced by the fact that most receiver equipment will be designed and manufactured by the overseas parent companies.

During the review, and in subsequent submissions to Government, prospective datacasters and one broadcaster proposed that FTA broadcasters should be required to carry, at all times, a continuous SDTV version of their HDTV digital signal in addition to any HDTV quotas. It was argued that this would allow substantially lower cost receivers to be available to the public, due primarily to the economies of scale achieved through global production of SDTV digital receivers. The submissions also noted that HDTV would be possible in a 7 MHz channel alongside a continuous SDTV signal. Aspirant datacasters were primarily concerned about the impact of the cost of receivers on the take-up of digital receivers. As a result they strongly supported the adoption of standards based on existing European technology to provide for the importation of receiver equipment at the lowest possible price.

The subscription television industry maintained that the spectrum provided to FTA broadcasters should be used to provide HDTV and advocated stringent requirements for the broadcast of HDTV programming. Subscription broadcasters believe that they would be particularly adversely affected if FTA broadcasters were not required to broadcast substantial amounts of HDTV and as result had additional capacity in which to provide multichannelled programming.

B6 Conclusion and recommended options

Standard definition digital television should offer viewers better picture quality (and widescreen display) and allow for range of new and possibly interactive services (such as datacasting and program enhancements). These services would be available on their existing television set with the addition of a set top box or on a new SD digital television. High definition television should deliver significantly better, cinema quality, pictures (with wide screen, sharper and better colour definition) than SDTV, in addition to datacasting and enhanced services. However, HDTV requires a compatible receiver and display device (screen) or a new integrated HDTV set that will cost more than SDTV receivers.

It is proposed that commercial and national free to air television broadcasters be required to provide a standard definition television (SDTV) signal at all times in addition to their HDTV and other digital services (option 4(a)). This means that consumers can buy lower cost SDTV equipment and be assured that they will receive a continuous service. Datacasting services may also be more viable if viewers have access to cheaper SDTV set top boxes.

There appears no need, at this time, to set the technical formats for HDTV in regulations as industry consensus has been achieved on the basis of internationally recognised standards. The current provisions in the BSA should be amended to remove the requirement to regulate HD format standards and to provide the power for the Minister to intervene with regulation in the event that it were to prove necessary (option 1(b)).

It is recommended that the BSA be amended so that regulations determine that FTA television broadcasters provide HDTV as soon as practicable after commencement of DTTB. Within two years of the commencement of digital transmissions in a licence area, commercial broadcasters should provide a minimum weekly quota of 20 hours of originated HDTV material (options 2.1(a) and 2.4(b)). This requirement will be fully implemented by metropolitan broadcasters by 1 January 2003 and over the following three years for regional broadcasters depending on their commencement date for digital broadcasting. If commercial free to air broadcasters do not satisfy this requirement they will risk losing their licence unless they can demonstrate exceptional circumstances.

It is recommended that no specific prime time requirements (option 2.2(b)) or genre requirements (option 2.3(b)) should be adopted as the benefits from such requirements are not clear and there is the potential to unnecessarily interfere with the programming and scheduling decisions of the broadcasters.

National broadcasters should have some flexibility in meeting their HDTV targets due to constraints in the sourcing of their content (option 3.1(a)). Both the ABC and SBS source much less content from the USA in comparison to the commercial broadcasters. The USA is expected to be the main source of HDTV programming, except for perhaps feature films, during the first few years of digital transmission.

The broadcasters have been loaned enough spectrum to provide HDTV and a regulatory requirement to broadcast in this format ensures that programming in HD format will be provided, including during peak viewing time if necessary.

It is also recommended that regional broadcasters should meet the same targets as metropolitan broadcasters (option 3.2(b)) noting that regional broadcasters have already be given consideration which should ease their implementation of digital television services.

It is also recommended that there should be no requirement to broadcast HDTV by remote broadcasters at this time (option 3.3(b)) in view of the costs likely to be incurred by direct to home viewers and by remote communities.

In view of the inevitable uncertainties associated with the conversion process, including the ongoing availability of programming, developments in digital technologies and the consumer response to digital television, it is recommended that a review of HDTV requirements be conducted within a few years of commencement of digital broadcasts.

B7 Implementation and review

The proposed arrangements will be implemented through amendments to the BSA, and regulations and made conditions of broadcasting licences. The ABA will be responsible for administering the arrangements and ensuring compliance with the licence conditions.

A review is to be held in 2003 to re-examine the goals and targets for HDTV, including the availability of HDTV material accessible to Australian television broadcasters, and to address the provision of HDTV by broadcasters in remote licence areas.
CAPTIONING

Background

The captioning of television programs allows the audio component of a television broadcast to be displayed as text on the screen to assist deaf and hearing impaired viewers to follow the program. There are two types of captioning: closed and open.

Closed captioning provides text for the spoken component of a program and may include descriptions of sounds, laughter and music, particularly for pre-recorded programs. Closed captions are normally positioned at the bottom of the screen beneath the speaker and timed to appear synchronously with speech. They may also be coloured to indicate who is speaking. To receive and display closed captioning viewers require a teletext television or decoder.

Open captions include all the information that closed captions contain but are permanently displayed on the screen and do not require a decoder. Subtitles, although similar to open captions in that a decoder is not required, provide text for the dialogue but not the other audio elements of the program.

Regulatory arrangements

Currently, the provision of closed captioning is subject to the co-regulatory arrangements operating under industry codes of practice. Under paragraph 123(2)(i) of the Broadcasting Services Act 1992 (BSA), codes of practice may relate to the captioning of programs for the hearing impaired. The Federation of Australian Commercial Television Stations (FACTS) Code of Practice commits licensees to endeavour to increase the amount of closed captioned programming, in consultation with organisations representing hearing impaired and deaf viewers. The Code provides for this section to cease to have effect on the determination of a captioning standard.

The Australian Broadcasting Corporation’s (ABC) Code of Practice commits the ABC to transmitting addresses to the nation and events of national significance with closed captioning, and to endeavour to increase the amount of closed captioning as resources permit.

With the passage of amendments to the BSA under the Television Broadcasting Services (Digital Conversion) Act 1998 a requirement was introduced for the determination of a captioning standard.

Clause 38 of Schedule 4 to the BSA requires captioning standards to be determined to apply to holders of commercial television licences and national broadcasters. The standards must require commercial and national broadcasting services to meet specified goals or targets in relation to the extent to which television programs, or specified kinds of programs, are captioned. The standards are to apply to commercial and national broadcasting services from the date at which their respective services commence broadcasting in digital mode, which in metropolitan areas is scheduled for 1 January 2001 and in regional areas during the period 1 January 2001 to 1 January 2004. The standards are to apply to both their digital and analog transmissions.

Subclause 38(4) of Schedule 4 to the BSA sets out two primary objectives in relation to the determination of captioning standards:

• that, as far as is practicable, commercial and national television broadcasters should provide a captioning service for television programs transmitted during prime viewing hours (defined in clause 38 as 6pm to 10:30pm); and

• that, as far as is practicable, broadcasters should provide a captioning service for television news programs, and television current affairs programs, transmitted outside prime viewing hours.

However, the legislation provides that the provisions under Part 4, including those relating to the determination of a captioning standard, will have no effect until:

• a number of reviews, including the review on whether any amendments should be made to Part 4 of the Schedule, have been completed and presented to Parliament;
• a resolution in relation to Part 4 has been passed by each House of the Parliament; and
• a Proclamation, made in accordance with the resolution of both Houses, has fixed a date for Part 4 to come into effect.

B1 Issue

An estimated 1.7 million deaf and hearing impaired Australians have limited access to free to air television services.

Free to air television plays a major role in providing entertainment, education and information to audiences throughout Australia and in developing and reflecting a sense of Australian identity, character and cultural diversity. Deafness advocacy groups have also stressed the importance of providing access to news and current affairs programs which provide reports on important local, national and international issues.

In the absence of direct regulation, access to television programming for deaf and hearing impaired viewers services has been limited by the amount of captioned programming provided by broadcasters under codes of practice.

Based on published program schedules, the Australian Caption Centre’s (ACC) captioning reviews from 1998 and 1999 provide the following information on the level of closed captioning provided by free to air broadcasting services. Figures for SBS are not provided due to difficulties in classifying foreign language subtitled programming for the purposes of the survey.

The ACC’s figures indicate a varying commitment to the provision of captioning by broadcasters, with the ABC and the Seven Network providing substantially more captioned material for the deaf and hearing impaired than the Nine Network and Network Ten. However, it is of concern that in 1999 a number of the measures indicate that there has been a decrease in the amount of captioning and that the overall amount of captioning provided by some networks has effectively stalled. These developments are surprising given the advances in captioning technology and the increased availability of overseas captioned programming.

In the absence of direct regulation, access to television programming for deaf and hearing impaired viewers services has been limited by the amount of captioned programming provided by broadcasters under codes of practice. The Commercial Television Industry Code of Practice has not provided uniform outcomes with considerable variation in the amount of captioning provided by networks both in relation to the overall level of captioning and captioning during prime viewing hours. Furthermore, the amount of captioning provided to viewers in comparable overseas countries indicates that increases in overall captioning by Australian broadcasters has been modest, particularly when considering their low base rates.

B2 Objective

To ensure that the requirements for captioning under the provisions of clause 38 of Schedule 4 to the BSA effectively address the principle of equity of access to broadcasting services.

B3 Options

Four options have been considered in relation to the determination of standards under clause 38 which address the central issues of a phase-in of the standards and the granting of exemptions from the standards.

(a) Determine a standard without a phase-in period and provision for limited exemptions only (non-English language and non-vocal music programs).

(b) Determine a standard without a phase-in period but allow for a greater range of exemptions which are gradually removed over time.

(c) Determine a standard with a phase-in of the requirements and provision for limited exemptions only.

(d) Determine a standard with a phase-in of the requirements and the exemption of a wider range of programming.

In considering these four options it is necessary to examine and evaluate the technical, financial and other constraints that may stand in the way of meeting the requirements of clause 38 and whether a phase-in period or exemptions from the standards are justified.

B4 Impact Analysis

The main groups affected by the proposed standard are:

• commercial television licensees;
• national broadcasting services; and
• deaf and hearing impaired people who rely on captioning to convey the audio component of a program; and
• the Australian Broadcasting Authority (ABA) as the responsible regulatory authority.

The implementation of the captioning requirements will have a financial impact on broadcasters. Submissions from the Australian Caption Centre (ACC) and others indicate that to meet the captioning requirements as currently set out in legislation would cost networks between $2.5 and $4 million. The precise cost for each licensee will depend on their commitment to providing non-prime news and current affairs and the mix of live, pre-recorded and converted overseas programs broadcast during prime viewing hours. It is not possible to provide a detailed breakdown of costs for each licensee as program genres and the associated costs can vary from year to year.

The ABC submission indicated that it costs $942 per hour to caption one hour of live news using stenocaptioning services. In addition to news the ABC also captioned 403 hours of programming in 1998 at an average cost of $1364 per hour. The cost of converting overseas programs which have captioning files is considerably lower, with the ACC’s published rate being $780 per hour. Captioning costs may fall as the production of captioning becomes integrated into the program production process and discounts based on volume are offered.

The ABC has estimated a cost of approximately $4 million per annum to caption programs broadcast during prime viewing hours and news and current affairs programs broadcast outside these hours. The cost to commercial television licensees may be lower as there is no requirement to caption non-program material (advertisements etc) which can make up approximately one hour of broadcast time during prime viewing hours. However, broadcasters are already committing a certain level expenditure to captioning in order to serve their current captioning commitments. Therefore, the extent to which additional funds would have to found to meet the prime viewing hours requirement will be greater for the Nine Network and Network Ten, which captioned 41 per cent of their prime time programming in 1999, compared to the Seven Network and the ABC which captioned 87 and 64 per cent respectively.

Separate costs were identified for the cost of captioning local news bulletins by regional television licensees. Prime Television has estimated a capital cost of $700,000 and recurrent salary costs of $800,000 per annum to caption its nine local news bulletins. The ACC estimated that the four regional Monday to Friday bulletins produced by WIN Television in Wollongong and Canberra could be captioned for less than $600,000 per annum or less than $580 per bulletin. WIN Television also provided estimates of the costs of captioning its 20 local news bulletins on an in-confidence basis. The ACC’s estimate for solus operator GTS4 in South Australia is that it could caption its weekday local bulletin for less than $50,000 per annum. The ACC has advised that captioning costs can vary depending on whether an online or offline approach is used to caption bulletins.

Allowing a phase-in of the requirements for either prime viewing hours programming or news and current affairs programming broadcast outside these hours, would reduce captioning costs for broadcasters. Using figures provided by the ACC and the ABC, broadcasters would be expected to save between $780 and $1364 per hour if a phase-in reduced their captioning obligations.

While the impact on broadcasters would be expected to be more or less equal in relation to a phase-in of prime viewing hours programs, the impact of a phase-in of the requirement for news and current affairs programs broadcast outside prime viewing hours would vary depending on each broadcaster’s commitment to providing non-prime news and current affairs.

Similarly, the granting of exemptions would reduce captioning costs for broadcasters with cost reductions on an hourly basis comparable to that ascribed to a phase-in. Providing a broad range of exemptions, such as under options (b) and (d), would be expected to have a different financial impact on each broadcaster. For example, broadcasters such as Network Ten and the ABC which broadcast relatively little sport during prime viewing hours would derive little benefit from the exemption of this genre of programming.

The narrower range of exemptions considered under options (a) and (c) (non-English language and non-vocal music) would also be expected to have a differing impact on broadcasters. SBS would clearly benefit from the exemption of non-English language programs, particularly in relation to its foreign language news services which are broadcast outside prime viewing hours. These broadcasts would be expensive and difficult to caption in the language of broadcast. Subtitled programs currently provided by SBS and other broadcasters provide a level of access for deaf and hearing impaired viewers. The captioning regulations in the USA provide similar exemptions where all foreign language broadcasts, other than Spanish, the second major spoken language, are exempt from the captioning requirements.

There seems little justification to provide captions for non-vocal music programming. Exempting non-vocal music programming from the standards also reflects the exemptions granted in other countries for this program genre.

While the standards may impose costs on broadcasters, deaf and hearing impaired viewers would obtain a significant benefit from an increase in the provision of closed captioning. Requiring programs broadcast during prime viewing hours to be captioned would improve access to the popular television programs which are broadcast during these hours and to programs which inform and reflect Australian identity, character and cultural diversity. The requirement for non-prime news and current affairs to be captioning would be expected to provide greater access to programs which provide viewers with news, analysis and commentary on social, economic or political issues of current relevance to the general community. The extension of the standards to broadcasters’ digital and analog transmissions ensures that deaf and hearing impaired viewers who currently view captioning on an analog television receiver will benefit from the commencement of digital services.

Any phase-in of the captioning requirements or exemption from the standards would represent a disbenefit for deaf and hearing impaired viewers as it would delay or deny their access to television programming. FACTS proposed a phase-in whereby
60 percent of program material broadcast during prime viewing hours would be captioned in 2002, which is the same as that provided by the ABC in 1998 but less than the Seven Network. It would not be until 2004 that the FACTS phase-in schedule would require the Seven Network to provide more captioning than it provided in 1998.

The FACTS’ proposal to phase-in the requirement to caption news and current affairs programs broadcast outside prime viewing hours in 2006 would delay access to programming which the deaf and hearing impaired community has identified as a priority.

The level of captioning provided in comparative English speaking countries would suggest that a greater amount of captioned programming can be provided by Australian free to air television broadcasting services and that it is possible to caption all program genres including live to air programs. In the USA, the major networks provide a minimum of 85 to 95 hours of captioned programming to affiliates each week and by 2006 broadcasters will be required to caption all programming other than that broadcast between 2am and 6am. A 1998 ruling in Canada requires large stations with revenues of over Can$10 million to caption all local news and 90 percent of all programming during the broadcast day (6am to midnight) by 2002. In the UK, the commercial service Channel 3 was required to caption 10½ hours of programming per day in 1998, increasing to 17 hours per day in 2004.

B5 Consultation

The views of broadcasters, deafness advocacy organisations, interested parties and individuals on the determination of a captioning standard were sought through the statutory review on captioning. More than one hundred submissions were received.

Submissions made in response to the issues paper identified the possible phase-in of the standard and exemptions from the standard as the two key implementation issues. As evidenced in submissions, these two issues are closely interrelated as they have a direct bearing on the cost to broadcasters of providing captioned services and the extent to which deaf and hearing impaired viewers can access captioned programs.

Broadcasters were generally of the view that the captioning requirements of the BSA should be phased-in over a period from three to five years. Broadcasters also supported the granting of exemptions from the standards.

FACTS proposed a phase-in requiring 60% of prime viewing hours programming to be captioned in 2002, rising to 80 percent in 2003 and 100 per cent in 2004. It also proposed that the phase-in be accompanied by exemptions for certain program genres including live sport, local news, non-English language, unscripted live to air and music programming. In relation to news and current affairs outside prime viewing hours, FACTS’ proposal was to caption 100 per cent of this programming in 2006.

The Special Broadcasting Service (SBS) proposed a phase-in of the standard over a five year period with 50% of non-exempt program material captioned during prime viewing hours in the first year, rising to 100% at the end of year five. SBS principally sought exemptions for its foreign language news programs and programs that carry subtitles.

The ABC’s preferred approach was to specify a percentage of prime time and news and current affairs programs to be captioned annually (a figure of 85% was suggested). The ABC considered that this model could accommodate exemptions, thereby removing the need to develop a separate list of exempt programming. It also recommended that the standards allow a two year phase-in period for news and current affairs programs broadcast outside prime viewing hours.

Submissions from deafness advocacy organisations including Better Hearing Australia, the NWPC and Deafness Forum Australia, as well as a number of individuals, opposed a phase-in period of the captioning requirements or the granting of exemptions from the standards.

The ACC and deafness advocacy organisations submit that there are no financial, technical or other constraints to fully implementing the captioning requirements from the commencement of digital broadcasting. The ACC and other captioning providers have also indicated that a considerable effort is being made to ready their services for the expected increase in demand once services commence in the digital mode.

B6 Conclusion and recommended option

The preferred option is to determine a standard requiring national and commercial free to air broadcasting services to caption prime viewing hours programming, and news and current affairs programming outside these hours, with provision for exemptions for non-English language and non-vocal music programming (Option 1) only. The standard will apply to broadcasters’ digital and analog transmissions. The standard will not apply to a particular licensee or national broadcaster before the first occasion on or after 1 January 2001 on which the licensee or broadcaster broadcasts television programs in the digital mode.

B7 Implementation and review

Under paragraph 7(1)(o) of Schedule 2 to the BSA, each commercial television broadcasting licence is subject to the condition that the licensee will comply with captioning standards determined under clause 38 of Schedule 4.

Under section 158 of the BSA, the ABA is responsible for monitoring compliance with program standards. It is expected that a report on compliance with the captioning standard will form part of the regular report provided to the ABA by licensees on compliance with standards determined under the BSA.

Paragraph 158(n) of the BSA, which requires the ABA to monitor and report to the Minister for Communications, Information Technology and the Arts on the operation of the Act, will provide the mechanism for the ABA to report to the Minister regularly on the operation of the provision.

UNDERSERVED REGIONAL LICENCE AREAS

Background

An underserved regional licence area or market is one in which there are fewer than three commercial television services (as defined by subclause 59(5) of Schedule 4 of the Broadcasting Services Act 1992 (BSA)).

There are currently four markets with only one commercial service (the solus markets), with a total licence area population of 234,739^[3]:

• Broken Hill, NSW (licence area population of 21,715).
• Riverland, S.A. (licence area population of 35,915).
• Mt Gambier, S.A. (licence area population of 66,490).
• Spencer Gulf, S.A. (licence area population of 110,619).

There are also ten markets across Australia with two commercial services available, with a total licence area population of 1,566,163:

• Mildura, Vic (licence area population of 55,743).
• Griffith, NSW- two services provided by the incumbent under s.38A (licence area population of 64,396).
• Darwin, N.T. (licence area population of 100,719).
• Tasmania, aggregated market (licence area population of 455,796).
• Remote East-Central (Remote NT, SA, Qld, NSW, Vic, Tas) - licence area population of 432,437).
• Mt Isa, Qld (licence area population of 21,977).
• Geraldton, W.A. (licence area population of 41,963).
• Kalgoorlie, W.A. (licence area population of 55,137).
• SW and Greater Southern, W.A. (licence area population of 236,663).
• Remote Western, W.A. (licence area population of 163,397).

(The four licence areas in Western Australia listed above were consolidated to create a new licence area for a second commercial television service operating in non-metropolitan WA - this service, operated by WIN TV, commenced in March 1999).

Aside from commercial television services, most communities in underserved markets currently receive terrestrially transmitted Australian Broadcasting Corporation (ABC) services, and many receive terrestrially transmitted Special Broadcasting Service (SBS) services, or are likely to obtain them through the SBS rollout program, which is part of the Government's $120 million Television Fund. ABC and SBS services are also available via satellite for direct to home reception with the purchase of a decoder and satellite dish, or retransmission by communities under self-help arrangements. Some communities also have the option of receiving pay television services.

B1 Issue

Underserved licence areas are characterised by small populations, often spread thinly over large geographical areas. This has the disadvantages of increasing the costs to broadcasters of their infrastructure establishment and maintenance, while also limiting the revenue base available due to the restricted availability of advertising earnings. There has, therefore, been little industry interest in providing additional independent commercial television services in most of these markets.

Consumers within underserved regional television licence areas currently receive fewer commercial services than most viewers within metropolitan licence areas. As part of the arrangements for the introduction of digital television services, Schedule 4 of the BSA requires the Minister for Communications, Information Technology and the Arts to cause to be conducted, before 1 January 2000, a review into, amongst other matters:

‘whether any amendments of laws of the Commonwealth should be made in order to ensure that underserved regional licence areas are provided with up to the same number of commercial television broadcasting services as are provided in metropolitan areas.’
(paragraph 59(1)(d))

This review was undertaken by the Department of Communications, Information Technology and the Arts in 1999, in consultation with the industry.

The legislative basis for the planning and allocation of new commercial television services is provided in the BSA. Under the BSA, the Australian Broadcasting Authority (ABA) is responsible for the planning and allocation of broadcasting services, in accordance with the relevant provisions of the Act. The ABA first determines the number and type of services which should be made available in each licence area as part of the licence area planning process in individual markets. Any commercial licenses made available are then allocated by a price based process. The BSA requires the ABA to have regard to the objects of the Act and a range of factors, including market demographics and social and economic characteristics, and to provide for wide public consultation.

The BSA imposes a moratorium on new commercial television broadcasting licences from 25 June 1998 until 31 December 2006, and a prohibition on digital multichannelling by licensed broadcasters during the simulcast period.

B2 Objective

To modify the existing regulatory environment, where appropriate, to encourage the provision in underserved regional licence areas of up to the same number of commercial television broadcasting services as are provided in most metropolitan areas.

B3 Options

Seven options for increasing the availability of commercial television services in underserved areas have been considered.

(a) Allocation of new commercial television licences: The ABA is able to revisit planning in underserved licence areas, and is still to complete these plans for Tasmania. There is currently, however, a legislated moratorium on new allocations before 2007.

(b) Allocation of a second commercial licence to the incumbent operator in a solus market under s.38A of the BSA: Section 38A licence applications are exempt from the moratorium on new commercial licences. The ABA is obliged to provide the second licence if an application is received from an incumbent to commence an additional service, and spectrum is available. The ABA is not required to first test any interest by other parties in providing an independent service.

This option only applies to solus markets and relies upon the incumbent broadcaster applying. There are currently no provisions within the BSA to ensure that s.38A applications are pursued (i.e. a new service is actually established).

(c) Extension of current licence area boundaries to embrace underserved communities: The ABA could consider extending licence area boundaries as part of the normal licence area planning process to provide new services in a particular area. Under this process the ABA would normally invite public comment and consult affected broadcasters before reaching a decision on any proposed licence area variations.

(d) Terrestrial retransmission of commercial television broadcasting services into underserved licence areas, from adjacent licence areas: Under s.212 of the BSA, the ABA may approve the retransmission of free to air broadcasting services beyond the originating licence area of the retransmitted services.

(e) Retransmission of commercial television broadcasting services in underserved areas on pay TV systems: This option could augment other measures to achieve additional commercial broadcasting services in underserved areas, subject to pay TV services being available in the area.

(f) Multichannelling by incumbent commercial broadcasters: The BSA includes provisions which have the effect of preventing multichannelling during the simulcast period. However, multichannelling potentially provides a cost effective way of introducing new digital services in underserved markets by reducing transmission infrastructure costs.

(g) Satellite delivery of commercial television services from other areas: Satellite capacity is being significantly enhanced by the ongoing development of digital compression technology. There may be further potential for satellite delivery of broadcasting services in the future, although any broader role for satellite delivery raises significant policy issues, and would need to be considered by the Government in close consultation with the industry.

B4 Impact Analysis

Impact Group Specification

• Commonwealth Government - responsible for the regulation of broadcasting and is the recipient of licence fees paid by the broadcasting sector.

• Business - Existing and potential free to air commercial television broadcasting licensees in underserved markets. Predominantly medium sized business with established infrastructure as an outcome of capital investment over many years. Australian controlled and the majority are Australian owned due to foreign ownership and control rules applying to broadcasting services.

• Existing and potential subscription service providers - Medium or large businesses, with high levels of capital investment, Australian and foreign.

• Consumers - Television viewers in underserved markets.

Assessment of Impact for Specific Options

Option (a). The allocation of a new, independent, commercial broadcasting licence could be expected to initially provide consumers with a new commercial television service. The new service would be provided in both analog and digital formats, and would be available to viewers on completion of the terrestrial rollout of the transmitting facilities.

However, underserved licence areas are relatively small markets with limited revenue bases. The predominant industry view, supported by the ABA, is that the introduction of a new independent commercial service, at this time, could be expected to affect the financial sustainability of both existing and new services. In particular a new independent service would divide the limited advertising revenue between different operators. Competition has only recently been introduced in several markets (to provide a second service), and incumbent broadcasters also face the costs of imminent digital conversions.

If revenues were not sufficient to sustain existing and a new independent service in these markets at this time it could result in the loss of either, or both, of these services. It could be expected to lead to degradation of the quality of the services, and delays in their digital rollout.

Option (b). A second commercial service in solus markets utilising the s.38A mechanism contained within the BSA would provide viewers with an additional analog commercial television service that must be digitally simulcast.

The ABA is required to approve s.38A licence applications subject only to spectrum availability. The incumbent commercial broadcasters in all four solus markets have applied for s.38A licences, and on this basis the second analog services would commence in early 2001.

As a s.38A service is provided by the incumbent broadcaster there are savings in infrastructure establishment costs. However, s.38A services are subject to the normal simulcasting and digital transmission requirements. As such, incumbent broadcasters would be required to fund three new services (one new analog service and two digital) within a relatively short time frame.

This could reduce the quality of services, and the timeliness of digital rollout, particularly in view of the limited revenue base of solus markets.

Option (c). An aggregation of current licence area boundaries to encompass underserved communities has the potential of providing viewers with additional commercial broadcasting service(s). The new service(s) would be provided at no direct cost to the viewers concerned. Any analog services would have to be converted to digital in the extended licence area. The timeliness of the introduction of the service, however, would be directly related to the new operators' ability to fund and rollout the infrastructure required.

The extension of a licence area increases the area the incumbent broadcaster is able to cover, and the advertising revenue that is available. However, the impact upon incumbent broadcasters is dependent, in part, upon the number of commercial services available in the licence areas concerned prior to aggregation. If a licence area with three commercial services is to be amalgamated with a solus market, one of the licensees will either have to cease operations or merge with another licensee in order to ensure that no more than three commercial licensees are operating within the aggregated area.

Similarly, the aggregation of two service and solus licence areas would see the solus operator facing competition from two new broadcasters, compared to one new competitor for the two service market operators.

The available advertising revenue would have to be shared with the incumbent(s), and the rollout of a new service would be a costly undertaking. The sustainability of existing services would be under threat. Therefore there may be no long term increase in the number of commercial services available.

The financial impost of new competition may also affect the digital rollout of both existing and new services.

Option (d). The terrestrial retransmission of commercial television broadcasting services into underserved licence areas, from adjacent licence areas, will have the same impacts as Option (c) above if the retransmissions are on a reciprocal basis (i.e. both licence areas retransmit).

If retransmission is only permitted from one licence area into another (i.e. it is one way) this option will have the same effect as introducing a new commercial service into the licence area receiving the retransmitted service. The retransmitted service will impact upon the sustainability of both the new and existing services, and potentially result in no long term increase in the number of commercial services available. This will also affect the capability of the broadcasters to undertake their digital conversions.

Viewers can receive a new service - although it may be lacking in relevant local content which viewers may value highly.

Option (e). The retransmission of commercial television broadcasting services in underserved areas on pay TV systems will provide additional services to existing pay television viewers at no additional cost to themselves. However, retransmitted out of area pay television services will not contain local programming. New viewers will need to subscribe to the pay TV service to get the new services. They may also be required to purchase direct to home satellite reception equipment (a satellite dish and decoder) if they are beyond the range of terrestrial pay TV delivery (e.g. MDS, cable). As some regional areas do not have access to pay TV, not all consumers will receive new services.

If the pay television carriage of out of area free to air commercial television services achieves a reasonable degree of market penetration, it will increase the amount of competition faced by incumbent broadcasters. The viewing audience for the incumbent will be reduced, and advertising revenue could potentially be split between the services. The introduction of competition will therefore affect the sustainability of existing services, and the incumbent's ability to fund the conversion to digital while continuing to provide a quality service to viewers.

Option (f). Multichannelling by the incumbent commercial free to air broadcasters will provide viewers with additional services on the conversion to digital services. Viewers may receive the benefits of two or more new digital services. Multichannelling by a s.38A broadcaster will provide the viewers, in solus markets, with existing and new services in digital format. This option has the advantage of reducing the cost of providing the broadcaster's second service as both services can share one set of digital infrastructure and, therefore, supports the sustainability of both services.

However, multichannelling will not always allow the provision of digital services in HDTV format nor of additional services such as datacasting by the broadcaster concerned.

Multichannelled digital services would be required to commence before 1 January 2004 in regional areas. In remote areas they will be required to comply with the ABA's remote digital conversion plans.

Option (g). The use of satellite to deliver free to air broadcasting services has the potential to provide all Australians with a full suite of broadcasting services.

Viewers will benefit from the provision of new services. However, nationally distributed satellite services may lack local content.

Incumbent broadcasters will also be required to compete against the new satellite services being delivered within their local market, while not having the ability to compete reciprocally in other markets and therefore increase their potential revenue streams. The retransmitted service will therefore affect the sustainability of the existing commercial services within that market. This will affect the ability of the broadcasters to carry out their digital conversions.

In order to provide satellite services broadcasters would need to construct terrestrial retransmission sites, or alter their existing transmission facilities. This would be a costly undertaking.

Communities outside the range of terrestrial retransmission facilities would need to establish their own retransmission facilities under self-help arrangements (about $35,000 per service). Alternatively, individual viewers would be required to purchase a satellite dish and decoder, currently in excess of $1,000.

Most importantly, satellite delivered services on a national free to air basis would conflict with the current licence area planning process undertaken by the ABA. Its ramifications are therefore wide ranging, and while there may be further potential for satellite delivery of broadcasting services in the future, the broad policy issues raised would need to be further considered.

B5 Consultation

Policies to facilitate the provision of new commercial services in underserved markets have been developed with extensive industry consultation.

As indicated above, an extensive review of underserved markets formed the basis for developing legislation. As part of the review the Department released an Issues Paper in January 1999 and invited submissions from free to air broadcasters, pay TV operators and other interested industry groups and agencies. In July 1999, the Department released a further paper for comment outlining possible options developed following the initial round of consultations. The Issues and Options Papers were circulated to all major stakeholders and were also posted on the Department’s webpage.

The main industry view was that new independent competition could not be sustained in the near future in existing two service and solus markets. The industry argued that the new capital expenditure required was not commensurate with the revenues and populations within these licence areas - a new independent service would have a detrimental impact on existing broadcasting services within those markets, and on the level of local content, noting that there was a case for extending a period of market consolidation in view of the recent introduction of competition in several two service markets. These factors would be heightened by the costs to broadcasters of the imminent introduction of digital television.

However, as noted above, the licensees in all solus markets have now applied for a second commercial licence under s.38A. While this will potentially provide a second service, there is industry consensus that a third service could not be sustained in these markets.

Multichannelling of digital services is strongly supported in at least two solus markets. Multichannelling will be of benefit to solus operators by easing the financial burden of commencing several new services with a short period of time - and new viable services will of course benefit viewers within these markets.

There is no strong interest in multichannelling in the two service markets. However, one licensee argued that if a third service was required the incumbents should be permitted to jointly operate a multichannelled third service, thus realising some economies of scale.

There was some support within the industry for permitting retransmissions into underserved areas, although the overwhelming industry view was that this would unfavourably affect existing services, and would erode the licence area planning process. Similar views were expressed in relation to a greater use of satellites for delivering services within underserved areas.

The pay television industry considered that no additional measures outside the normal planning processes are required at this time for new services. Pay television operators also had reservations about the use of multichannelling to introduce new services, supporting the existing limits on multichannelling which apply at least until the end of the simulcast period.

B6 Conclusion and Recommended Option

The proposed approach aims to allow for a timely introduction of new analog and digital services in these markets while maintaining the quality of existing services to consumers.

In developing these proposals, account has been taken of the particular economics of underserved markets - widely dispersed populations requiring extensive transmission infrastructure coupled with small populations and, therefore, low advertising revenue bases. Restrictions on competition are supported for the following reasons:

• The high costs of transmission infrastructure rollout for new services is not likely to be covered by any increase in advertising revenues;

• The viability of new independent services is highly unlikely;

• Current services are unlikely to be able to be sustained if there is an increase in competition at this stage (noting that some two service markets have had competition introduced only recently), especially in the conversion to digital;

• Consumers are unlikely to support new services which do not present some local programming, or are of an inferior quality;

• There is little interest by new broadcasters in providing services in these areas.

The most effective way to introduce new services in these markets within a reasonable timeframe is to allow for incumbents to provide such services. New digital technology further enhances the ability for new, economically viable services to be introduced in these markets. The Government recognises that this will impact on the ability to receive HDTV and will review the situation in 2005. However, there are significant benefits to the early introduction of new services.

Solus Markets

The incumbent commercial broadcasters in all four solus markets have applied for s.38A licences. The ABA is under a legislative obligation to grant these licences subject only to availability of spectrum. The ABA is scheduled to complete technical planning for these new services in the solus markets in the second half of 2000.

Both services are required to be simulcast in analog and digital formats (HDTV and SDTV) after the introduction of digital terrestrial television broadcasting. The digital services are required to commence before 1 January 2004.

These licenses will meet significant consumer interests, including the early introduction of new analog services. However, the digital conversion requirement is more onerous on licensees in solus markets than in other markets, because of the additional costs associated with establishing the second analog service, and then replicating both services in digital modes within a relatively short timeframe.

The legislative provisions in respect of solus markets, therefore, are designed to encourage the early introduction of s.38A services by providing licensees with options for lower rollout costs of their two digital services, and the transmission requirements through permitting multichannelling of both digital services in the same channel, with an exemption from HDTV requirements to be made available. SDTV requirements will still apply and the HDTV exemption for multichannelling will be reviewed in 2005.

As a further incentive to provide new services to consumers, it is proposed to apply a ‘use it or lose it’ condition in respect of the s.38A licences. Similar conditions have been applied in solus radio markets. The solus licensees have indicated that they would not object to such a condition.

The use of the s.38A licence mechanism will therefore ensure viewers in solus markets receive a greater range of commercial services. In addition, it will not prevent the ABA from considering new services in these markets in the future in the context of the licence area planning process.

Two Service Markets

The s.38A option does not apply to two service markets. The best prospects for introducing new services in these markets lies in providing incentives and flexible options for incumbent broadcasters to provide additional services. Such services could be provided at a lower cost than would be incurred in establishing an independent service.

Permitting the two incumbent commercial television broadcasting licensees in each existing two service market to provide a combined third 7 MHz digital only service will enable consumers to obtain the same number of commercial services as available in metropolitan areas. A combined service will enable the incumbent broadcasters to share the costs, while requiring the service to be provided in both SDTV and HDTV formats will ensure viewers obtain the full benefits of digital television.

If the incumbents do not wish to provide a combined service a licensee will be permitted to multichannel a new digital service using the 7 MHz allocation for the digital transmission of their existing analog services. Only one of the two licensees in each two service market will be permitted to multichannel, thus limiting to three the overall number of commercial television services in any market, as per existing Government policy.

If only one broadcaster is interested in applying for the multichannel licence, the ABA can issue that licence to the applicant. However if both broadcasters express interest, the multichannel broadcasting licence may be allocated to one of the incumbent broadcasters via a price based allocation process, with bidding limited to the two incumbent licensees. Where multichannelling takes place, the two services are exempt from HDTV requirements. SDTV requirements will apply. The HDTV exemption will be reviewed in 2005.

While there is little current interest in multichannelling in the two service markets, by permitting such an application the Government is providing broadcasters in two service markets with the flexibility to commence new sustainable services if they consider it to be commercially prudent.

A third digital service introduced in regional areas under either of the options above must commence before 1 January 2004, in accordance with the relevant digital implementation plan(s).

B7 Implementation and Review

As noted above, new s.38A analog services will be required to commence from 1 year after the relevant amendments to the BSA. In regional areas new digital services must commence before 1 January 2004.

The appropriateness of the HDTV exemptions will be reviewed in 2005. The moratorium on new commercial licences is scheduled to be lifted in 2007. Under current provisions in the BSA, the ABA would then be able to examine the licence area plans for individual markets, and determine whether the introduction of new commercial services is appropriate, subject to prevailing Government policy.

SPECTRUM PLANNING

Background

The commercial and national free to air television broadcasters will be loaned sufficient additional spectrum, free of charge, to enable them to simulcast their existing service in analog and digital format for at least 8 years, after which period they are required to return the analog spectrum to the Commonwealth

Currently, the BSA provides that, when analog transmissions cease, FTA broadcasters may choose which of their channels (digital or analog) they wish to retain for ongoing digital broadcasting, and that which they hand back (paragraph 6(3)(h) of Schedule 4 of the BSA). Broadcasters could, for example choose to retain the channels currently used for the analog service and return those loaned to them for the simultaneous digital service.

Issue

The ABA considers it likely that fewer channels will be needed for digital services than for their equivalent analog services, due to spectrum efficiencies arising from the digital technologies. Under current legislation broadcasters may choose to retain the more numerous analog channels either to reduce the amount of spectrum potentially available to new entrants or to realise some of the benefits of spectrum efficiency for themselves.

Objective

To provide arrangements for spectrum return by broadcasters which allows the ABA to plan spectrum allocation in the most spectrum efficient manner.

Options

There are two options available:

1 No changes to the current legislation i.e. allow broadcasters to determine which surplus broadcasting channels they hand back at the end of the simulcast period.

2 Amend the BSA to provide the ABA with the discretion to determine which surplus broadcasting channels broadcasters hand back at the end of the simulcast period.

Impact analysis

1 No changes to the current legislation i.e. allow broadcasters to determine which surplus broadcasting channels they hand back at the end of the simulcast period.

Broadcasters are required to hand back spectrum at the end of the simulcast period. This could significantly reduce the spectrum efficiency gains to be realised by the community from the conversion process and reduce the number of channels available for new services. Fewer channels could be handed back at the end of the simulcast period, to be sold for other purposes.

2 Amend the BSA to provide the ABA with the discretion to determine which surplus broadcasting channels broadcasters hand back at the end of the simulcast period.

Under this option, the ABA would have the power to determine (in consultation with the broadcaster concerned) the channels a broadcaster needs at the completion of the simulcast period, having regard to:

− the need to plan the spectrum as efficiently as possible, and
− the objective (already in the BSA) that at the end of the simulcast period the digital service should achieve the same level of coverage and potential reception quality as the analog service it replaces achieved immediately before the end of the simulcast period.

The main benefit of this proposal will be to ensure that the potential spectrum efficiencies are fully realised as a result of the introduction of digital television in Australia. This is in line with the objectives set out in s.23 of the BSA, that the ‘ABA is to promote the objects of the Act, including the economic and efficient use of the radiofrequency spectrum’.

Consultation

The ABA was consulted regarding the provisions surrounding the hand back of spectrum by FTA broadcasters.

Conclusion and recommended option

Although the current provisions in the BSA provide for the hand back of spectrum at the end of the simulcast period as outlined in Option 1, this provision is at odds with the ABA’s role in spectrum planning (as outlined in the BSA) and with the general principle of efficient spectrum management.

Option 2 facilitates the ABA’s involvement in licence area planning for digital services. This option also ensures efficient use of the spectrum. It is recognised that the ABA will become a repository of significant expertise in digital television planning and it would be desirable to draw on that expertise in licence area planning.

Implementation and Review

It is proposed to amend the BSA by replacing the current provisions on spectrum hand-back with a provision which allows the ABA discretion to determine (in consultation with the broadcaster concerned) the channels a broadcaster needs at the completion of the simulcast period, having regard to:

• the need to plan the most efficient use of the spectrum as possible, and
• the objective that at the end of the simulcast period the digital service achieve the same level of coverage and potential reception quality as the analog service it replaces achieved immediately before the end of the simulcast period.

There will be a review conducted on the efficiency of spectrum allocation in 2005.

GLOSSARY

NOTES ON CLAUSES

Clause 1 – Short title

Clause 1 provides for the citation of the Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000.

Clause 2 – Commencement

Most provisions of the Act will commence on Proclamation, subject to automatic commencement 6 months after Royal Assent. The delayed commencement will give the ACA and the ABA time to prepare for the introduction of digital transmission.

A small number of provisions will commence on Royal Assent.

Items 75 and 137 of Schedule 1

The Datacasting Charge (Imposition) Act 1998 (the DCI Act) imposes a charge on broadcasters who provide datacasting services (see sections 6 and 8 of the DCI Act). The charge is set by means of a written determination by the ACA (see section 7 of the DCI Act). Before making the first year’s determination, clause 53 of Schedule 4 of the BSA requires the ACA to give the Minister a written report about proposals to be included in the determination.

Item 137 of Schedule 1 amends clause 53 of Schedule 4, and item 75 of Schedule 1 is consequential on that amendment. Accordingly, to enable the ACA to prepare the report as required by amended clause 53 in advance of Proclamation, items 75 and 137 of Schedule 1 will commence on Royal Assent.

Item 142 of Schedule 1

Part of the preparation prior to commencement will involve variation of the ABA’s commercial and national conversion schemes, under clauses 16 and 30 respectively of Schedule 4 of the BSA, to reflect the changes made by this Bill. Item 142 of Schedule 1 of the Bill allows the ABA to vary the schemes after Royal Assent but before Proclamation. Accordingly, item 142 will commence on Royal Assent.

Item 143 of Schedule 1

Item 143 of Schedule 1 is a transitional provision, allowing the ABA to allocate a datacasting licence under proposed Schedule 6 of the BSA after Royal Assent, but before Schedule 6 of the Act comes into operation (on a date to be proclaimed). Any datacasting licence allocated during this period would only take effect when Schedule 6 of the Act came into operation. Accordingly, item 143 of Schedule 1 will commence on Royal Assent.

The allocation of datacasting licences in advance of commencement will ensure that any datacasting test transmissions under paragraph 34(1)(fa) of the BSA which are in progress at commencement may continue with no hiatus in the licensing arrangements.

Clause 3 – Schedule(s)

By virtue of this clause, provisions of the BSA and other Acts are amended as set out in the Schedules to the Bill and transitional provisions have effect according to their terms.

The Schedules of the Bill make amendments as follows:

Schedule 1 – BSA

Schedule 2 – Radcom Act

Schedule 3 – other Acts

SCHEDULE 1 – AMENDMENT OF THE
BROADCASTING SERVICES ACT 1992

PART 1 – AMENDMENTS

Part 1 of Schedule 1 makes substantive amendments to the BSA. Part 2 contains transitional provisions.

Item 1 Title

The amendment of the long title reflects the proposed increased scope of the BSA in regulating the provision of datacasting services.

Item 2 New paragraph 3(1)(jb)

This item inserts a new paragraph 3(1)(jb) to give the Act the object of promoting the availability to people throughout Australia of datacasting services that supplement radio and television services. The new object reflects the policy that the proposed regulatory scheme for datacasting is intended to encourage the provision of a range of services that are different to traditional analog television and radio broadcasting services.

Item 3 Subsection 4(1)
Item 4 Subsection 4(2)
Item 5 Subparagraph 4(2)(c)(i)

These items add appropriate references to datacasting services in section 4, which is the general statement of regulatory policy for the Act. The references to datacasting services are inserted to ensure that the general regulatory policy underpinning the regulation of broadcasting services also applies to the regulation of datacasting services.

Item 6 Paragraph 5(1)(a)

This item adds a reference to datacasting services in section 5 to charge the ABA with responsibility for monitoring the datacasting industry.

Item 7 Subsection (6)(1) (at the end of the definition of associate)

The term ‘associate’ is used to find out who is in a position to exercise control of a licence, newspaper or company for the purpose of the control provisions of the BSA: section 7, Part 5 (sections 50-78) and Schedule 1. The control provisions are also amended by this Bill, to impose restrictions on the control of both a DTL and a CTV licence (see items 25-39, 42-43 and 58-66 below).

The definition of ‘associate’ in subsection 6(1) applies in relation to control of a licence and control of a company in relation to a licence. The term ‘licence’ is defined in subsection 6(1) as a licence allocated by the ABA under the BSA, other than a class licence. Item 14 below substitutes a new definition of ‘licence’ in subsection 6(1) to make a DTL a ‘licence’ for the purposes of the control provisions.

Accordingly, this item adds a note at the end of the definition of ‘associate’ pointing to the extended meaning of ‘licence’ given by the definition in subsection 6(1).

Item 8 Subsection 6(1) (definition of commercial radio broadcasting licence)
Item 9 Subsection 6(1) (definition of commercial television broadcasting licence)
Item 10 Subsection 6(1) (definition of community broadcasting licence)

These items make minor technical amendments to the definitions to identify the provisions of the BSA under which the respective licences are allocated.

Item 11 Subsection 6(1) (new definition of datacasting licence)

This item inserts a new definition of ‘datacasting licence’ in subsection 6(1), which contains definitions of terms used in the Act. Datacasting licences are established by proposed Part 2 of Schedule 6 to the Act. Schedule 6 is inserted in the Act by item 140 of this Schedule.

Item 12 Subsection 6(1) (new definition of datacasting service)

This item inserts a definition of ‘datacasting service’ in subsection 6(1) of the Act in substitution for the definition of the term in clause 2 of Schedule 4 of the Act (to be omitted by item 74 of Schedule 1).

The definition provides that a datacasting service means a service that delivers content in any form (e.g. text, data, sound including speech or music, still or animated (i.e. moving) images etc) to persons having equipment appropriate for receiving that content, where the delivery of the service uses the broadcasting services bands (the BSB).

The current definition of datacasting service excludes a broadcasting service. This complete distinction between broadcasting and datacasting is not sustainable in circumstances where a licensed datacasting service will be able to provide some types of radio or television programs (for example, information-only programs, educational programs and Parliamentary proceedings). Accordingly, under the new definition a datacasting service becomes a wider concept than a broadcasting service insofar as datacasting services will be able to deliver a variety of content, of which radio and television programs are part.

The definition of a ‘broadcasting service’ will have a wider application insofar as it is not restricted to services delivered using the broadcasting services bands, whereas the regulation of datacasting services will be restricted to services using those bands.

A datacasting licence will limit the types of content which are allowed to be provided by datacasters (see in particular the genre conditions in Division 1 of Part 3 of Schedule 6 of the Act, inserted by item 140 below). Broadcasters will be exempt from the prohibition on providing a datacasting service without a licence insofar as they are providing a broadcasting service under, and in accordance with the conditions of, their licence (see clause 51 of proposed Schedule 6).

Item 13 Subsection 6(1) (new definition of datacasting transmitter licence)

This item adds a definition of ‘datacasting transmitter licence’ (referred to here as DTL) in the BSA, by reference to the new definition in section 5 of the Radcom Act, which is inserted by item 4 of Schedule 2 below. For BSA purposes (including the control provisions in section 7, Part 5 and Schedule 1), a DTL includes an authorisation under section 114 of the Radcom Act.

The amendment made by the next item substitutes a new definition of ‘licence’ which makes it clear that for the purposes of the control provisions, a licence includes a datacasting transmitter licence. The new definition of a ‘datacasting transmitter licence’ makes it clear that the term includes an authorisation under section 114 of the Radcom Act by the licensee of the datacasting transmitter licence.

Under new subparagraph 2(1)(ba)(i) of Schedule 1 to be inserted by item 62, a person is in a position to exercise control of a datacasting transmitter licence if the person is the licensee.

It is intended that for the purposes of the control rules in the Act (including the rules in clause 2 of Schedule 1), a reference to a ‘licensee’ should be read as a reference to the authorisee (i.e. the person authorised under section 114) in circumstances where an issue arises as to whether a person is in a position to exercise control of an authorisation under section 114. Such an interpretation reflects the rule in section 18A of the Acts Interpretation Act 1901.

Item 14 Subsection 6(1) (definition of licence)

As explained in the notes to item 7 above, this item substitutes a new definition of ‘licence’ in subsection 6(1) to make a DTL a ‘licence’ for the purposes of the control provisions (i.e. the definition of ‘associate’, section 7, Part 5 and Schedule 1). For all other BSA purposes, ‘licence’ means a licence allocated by the ABA under the BSA, other than a class licence.

Item 15 Subsection 6(1) (new definition of subscription television broadcasting licence)

This is a technical amendment to insert a definition of ‘subscription television broadcasting licence’ into subsection 6(1), which refers to the provisions of the BSA under which such licences are allocated.

Item 16 At the end of section 7 (new note)

Section 7 is an interpretation provision for the control provisions, which gives effect to Schedule 1 of the BSA. This item adds a note pointing to the extended meaning of ‘licence’ for these purposes, discussed in the notes on item 14 above.

Item 17 New section 8A – Captioning taken to be part of program

This item inserts new section 8A, which is intended to remove any doubt about whether captions for the deaf and hearing impaired on a television program are part of the ‘program’ for the purposes of the Act.

This means, for example, that section 212 (which enables the retransmission of programs) will only apply to captioned programs if the captions are also retransmitted. It also means that the captions themselves, as parts of the television program to which they relate, are subject to any applicable regulation under the Act (such as the prohibition on tobacco advertising).

Item 18 Section 28

This item makes a minor technical amendment to section 28 of the Act, which prevents the allocation of new CTV licences before 31 December 2006, by inserting a missing word.

Item 19 Section 28A

Section 28A provides that section 28 does not prevent the allocation of additional CTV licences under section 38A (in single-station markets). This item amends section 28A so that it also does not prevent the allocation of additional CTV licences under new section 38B (in 2-station markets), inserted by item 23 below.

Item 20 New subsection 34(4A)

Under subsection 34(3) of the Act, the ABA may, by written instrument, determine that a part of the BSB spectrum is available for allocation for the transmission of datacasting services. In making such a determination, the ABA must consider possible future demand for that spectrum for commercial television broadcasting services, and any other matters it considers relevant (subsection 34(4)).

This item inserts a new subsection 34(4A), which provides that each part determined by the ABA under subsection 34(3) must be 6 or 7 MHz. The width of existing television spectrum channels in the BSB is normally 7 MHz, although a small number of channels are currently 6 MHz. Datacasting channels are intended to be either 6 or 7 MHz. This provision ensures that the ABA only makes BSB spectrum available in normal channel widths for datacasting services. This will aid in the technical planning of BSB spectrum, and help ensure that datacasting services are able to be received on standard digital television receivers.

Item 21 Subsection 34(5) (definition of datacasting service)

This item repeals subsection 34(5) (which defines ‘datacasting services’ for the purposes of section 34) as a consequence of item 12 above. Item 12 inserts a new definition of ‘datacasting service’ in the BSA. As explained in relation to that amendment, ‘datacasting service’ is defined broadly, and would include some broadcasting services.

This item inserts a new subsection 34(5) which restricts the meaning of ‘datacasting service’ in section 34, prior to 1 January 2007, to a service provided under, and in accordance with the conditions of, a datacasting licence.

This amendment is necessary to confine the scope of the definition for the purposes of paragraph 34(1)(fa) and subsection 34(3). Prior to 1 January 2007, when the ABA makes spectrum available under paragraph 34(1)(fa) and subsection 34(3), it may only do so for the purposes of licensed datacasting services. However, from 1 January 2007, spectrum under these provisions may also be made available for broadcasting services provided under a licence allocated by the ABA or a class licence (new subsection 34(6)). The 1 January 2007 date corresponds to the end of the moratorium on the allocation of new commercial television licences under section 28 of the BSA.

Item 22 Subsection 38A(2)

Section 38A enables the ABA to allocate an additional CTV licence to an existing licensee in a single-station market. This amendment adds a ‘use it or lose it’ condition to an additional licence granted under section 38A. An additional licence cannot be issued under section 38A if:

(a) a previous licence in that area issued under section 38A was cancelled for breach of the condition in paragraph 7(1)(i) of Schedule 2 of the BSA (the requirement to commence providing the service within one year of licence allocation); or

(b) a previous licence in that area held by the existing licensee was cancelled for breach of the condition in subsection 38A(9) (the requirement that services under the parent and additional licences continue for at least two years after the additional licence is allocated); or

(c) a previous licence in that area held by the existing licensee was surrendered.

However, the ABA will still be required to allocate a licence if, despite one or more of the above paragraphs applying, the ABA is satisfied that there are exceptional circumstances (new paragraph 38A(2)(b)).

Item 23 New section 38B

New section 38B will allow one additional licence to be allocated in each 2-station market, i.e. each licence area with only two CTV licences in force. However, an additional licence cannot be allocated under section 38B if one of the existing licences was issued under section 38A.

Under subsection 38B(1), there are three alternative mechanisms for the allocation of the additional licence (see subsection (1)):

(1) application by a joint-venture company jointly owned by the existing licensees;

(2) separate applications from both licensees, and price-based allocation;

(3) application by one of the existing licensees.

For the additional licence to be allocated, the two existing licensees must, within 90 days of commencement of the section (which will be a day to be proclaimed), give the ABA a joint written notice specifying one of the above alternatives.

Additional licence allocation is subject to the ordinary requirements in section 37 (see new subsection (24)). Thus an additional licence can only be allocated to an Australian company with a share capital, which meets the suitability test in section 41.

Alternative (1): Proposed joint-venture company

If the joint-venture alternative is chosen, the joint-venture company may apply for the additional licence within 12 months of commencement (see subsection (2)). The joint-venture company must be formed in Australia or an external territory and have a share capital (see paragraph (1)(d)(iii)). The company must be wholly beneficially owned by both licensees (see subsection (25)).

The ABA must allocate the licence as soon as practicable (see subsection (5)). The fee determined by the ABA must be paid for the allocation of the licence (see subsection (17)).

Alternative (2): Proposed applications from both licensees

If the second alternative is chosen, each licensee may apply for the additional licence within 12 months of commencement (see subsection (3)).

If both licensees do in fact apply within 12 months, the ABA must allocate the licence according to a price-based allocation system determined under subsection (10) (see subsection (6)). The Minister may give the ABA directions for the purposes of such a determination, which may include reserve prices (see subsections (11) and (12)). Details of the successful applicant must be published in the Gazette (see subsection (13)).

If only one licensee applies within 12 months, the ABA must allocate the licence as soon as practicable after the 12 month period (see subsection (7)), or as soon as practicable after the other licensee notifies the ABA that it will not apply for the additional licence (subsection (8)). The fee determined by the ABA must be paid for the allocation of the licence (see subsection (17)).

Alternative (3): Proposed application from one licensee

If only one licensee proposes to apply for the additional licence, application may be made within 12 months of commencement (see subsection (4)). The ABA must allocate the licence as soon as practicable after application (see subsection (9)). The fee determined by the ABA must be paid for the allocation of the licence (see subsection (17)).

Common provisions

Under subsection (14), if more than 30% of the population of a licence area is also in another licence area, or one licence area is entirely within the other licence area, the ABA may determine in writing that the two licence areas are to be treated as one licence area. (Under section 30 of the BSA the ABA determines, for each licence area, the licence area population and the proportion of the population in the overlap area.) A determination under subsection (14) has effect accordingly (subsection (15)), and is a disallowable instrument (subsection (16)).

Licence conditions

The additional licence allows only digital transmission of the broadcasting service concerned. The licensee must commence providing the additional service in SDTV digital mode (as defined in Schedule 4) by 1 January 2004, or an earlier date notified by the ABA (see subsection (18)).

The condition in paragraph 7(1)(i) of Schedule 2 concerning commencement of service is covered by subsection (18). The conditions in paragraphs 7(1)(l) and 7(1)(m) of Schedule 2 (implementation plans for conversion to digital, and the simulcast obligation) are not relevant to these additional licences. Accordingly, these three conditions do not apply to these additional licences (see subsection (19)).

When the additional licence is allocated, it becomes a condition of that licence, and of the parent licence (both parent licences in the case of a joint-venture company) that the licensee concerned will continue to provide services under the licence concerned for at least 2 years after the additional service commences (see subsections (20) and (21)).

Restrictions on transfer of licences

A joint-venture holder of an additional licence cannot transfer that licence for 2 years after allocation. In other cases, both the existing and additional licences may be transferred within 2 years, but they must be transferred at the same time to the same transferee (see subsections (22) and (23)).

Item 24 New subsection 41(4)

Under section 41, prior convictions for BSA offences may be considered for the purposes of deciding whether a person is suitable to hold a commercial broadcasting licence (see paragraph 41(3)(e)).

This item inserts new subsection 41(4), which provides that the operation of the spent conviction scheme in Part VIIC of the Crimes Act 1914 is not affected by section 41. A number of other provisions of the BSA are also amended accordingly.

Item 25 Part 5 (heading)

Items 25-39 and 58-66, together with certain other items, amend the control provisions in Part 5 and Schedule 1 of the BSA, to include restrictions on the control of DTLs.

This item replaces the heading to Part 5 to reflect the inclusion of control rules for DTLs.

Item 26 Before section 53

This amendment makes Division 2 of Part 5 (sections 53 and 54), dealing with control of commercial broadcasting licences, into Subdivision A of Division 2, consequential on the amendment in the following item.

Item 27 New Subdivision B of Division 2 of Part 5 (new section 54A)

This item inserts a new Subdivision B in Division 2 of Part 5 (new section 54A), dealing with control of DTLs. Under new section 54A, a person must not be in a position to exercise control of both a CTV licence and a DTL.

Existing commercial and national television broadcasters control valuable radiocommunications spectrum in the BSB, and will be loaned additional spectrum to provide their digital services. The rules in new section 54A and clause 83 of proposed Schedule 6 are intended to prevent commercial and national broadcasters from being in a position to exercise control of any other spectrum for licensed datacasting services, over and above that provided for their analog and digital television broadcasts.

Item 28 Before section 55

This amendment places Division 3 of Part 5 (sections 55 and 56), dealing with directorships in respect of commercial broadcasting licences, into Subdivision A of Division 3, consequential on the amendment in the following item.

Item 29 New Subdivision B of Division 3 of Part 5 (new section 56A)

This item inserts a new Subdivision B in Division 3 of Part 5 (new section 56A), dealing with directorships in respect of DTLs. The effect of new section 56A, together with new section 54A, is that a person must not be both:

(on the one hand) either:

• a director of a company which is in a position to exercise control of a CTV licence; or

• in a position to exercise control of a CTV licence; and

(on the other hand) either:

• a director of a company which is in a position to exercise control of a DTL; or

• in a position to exercise control of a DTL.

The position is represented by the following table (where ‘controller’ means a person who is in a position to exercise control):

Item 30 Subsection 62(1)
Item 31 Paragraph 62(1)(c)
Item 32 Section 62 (penalty)

Section 62 requires commercial broadcasting licensees to annually notify the ABA of the details of directors and persons who are in a position to exercise control of the licence. Items 30-32 amend section 62 to extend these notification requirements to DTL licensees. The penalty for failure to do so will be the same as for CTV licensees, i.e. 500 penalty units.

Item 33 Subsection 63(1)
Item 34 Section 63 (penalty)

Section 63 requires commercial broadcasting licensees to notify the ABA within 7 days if there are changes to the person(s) who are in a position to exercise control of the licence. Items 33 and 34 amend section 63 to extend this notification requirement to DTL licensees. The penalty will be the same as for CTV licensees, i.e. 500 penalty units.

Item 35 Subsection 64(1)
Item 36 Section 64 (penalty)

Section 64 requires a person who becomes in a position to exercise control of a commercial broadcasting licence to notify the ABA of that fact within 7 days. Items 35 and 36 amend section 64 to extend this notification requirement to persons who become in a position to exercise control of a DTL. The penalty will be the same as for CTV licensees, i.e. 500 penalty units.

Item 37 Subsection 66(1) (penalty)

Section 66 contains the main offence provision of Part 5. A person commits an offence by being involved in any transaction which places them in breach of the control rules in Divisions 2, 3, 4 or 5 of Part 5, where the ABA’s prior approval of the breach under subsection 58(2) or section 67 was not obtained. Item 37 extends the penalty for this offence to DTLs. The penalty will be the same as for CTV licences, i.e. 20,000 penalty units.

Item 38 Section 69 (penalty)

Under section 67, a person may apply to the ABA for prior approval of a transaction which would place them in breach of the control rules. The ABA may approve the breach and specify a period of up to two years for action to be taken to remedy the breach. Under section 68, the ABA may extend the period for up to one year. Section 69 makes it an offence to fail to comply with a section 67 notice.

This mechanism will be available in relation to the control rules applying to DTLs.

This item makes the penalty in section 69 (for failure to comply with a section 67 notice) the same as for CTV licences, i.e. 20,000 penalty units.

Item 39 Section 72 (penalty)

Under section 70, the ABA may direct a person who is in breach of the control rules to take action to remedy the breach. The notice must specify a period of up to two years for this action to be taken. Under section 71, the ABA may extend the period for up to one year. Section 72 makes it an offence to fail to comply with a section 70 notice.

This mechanism will be available in relation to the control rules applying to DTLs.

This item makes the penalty in section 72 (for failure to comply with a section 70 notice) the same as for CTV licences, i.e. 20,000 penalty units.

Item 40 New subsection 73(2)

Section 73 provides that an additional licence allocated under section 38A (in a solus market) and the licence originally held by the licensee are treated as one licence for the purposes of Part 5. The main consequence of this is that the ‘one to a market’ rule in subsection 53(2) does not apply to the two licences.

This item adds new subsection (2), which requires the two licences to be treated as separate licences at all times after one of the licences first becomes held by a different person.

Item 41 New section 73A

The effect of new subsection 73A(1) is that if an additional licence is allocated to one of the existing licensees under new section 38B, the existing licence and the additional licence are treated for the purposes of the control rules in Part 5 of the Act as one licence.

However, the licences cease to be treated as one licence once one of the licences first becomes held by a different person (subsection (2)).

Subsection (3) deals with the situation where the additional licence (the section 38B licence) was allocated to a joint-venture company wholly beneficially owned by the existing licensees.

The effect of subsection (3) is that while the joint-venture company holds the section 38B licence, and the joint-venture company is ‘partly-owned’ by an existing licensee, the existing licence and the section 38B licence are treated as one licence. Subsection (3) applies separately to both existing licences.

Subsection (4) provides that for a company to be ‘partly-owned’ by another company under subsection (3), it is necessary that at least one share in the company must be beneficially owned by the other company.

Item 42 Paragraphs 74(1)(a) and (b)
Item 43 Subsection 74(2)

Under section 74, a person may apply to the ABA for a binding opinion on whether the person is, or would be if a specified transaction took place, in a position to exercise control of a broadcasting licence, a newspaper or a company. Items 42 and 43 extend this mechanism to DTLs.

Item 44 Paragraph 75(1)(aa)

This item amends section 75 to require the ABA to maintain a register of licences allocated under new section 38B (2-station markets).

Item 45 New subsection 83(4)
Item 46 New subsection 92D(4)
Item 47 New section 98(4)

Sections 83, 92D and 98 are suitability provisions for the allocation of community broadcasting or subscription television broadcasting licences. These items insert new subsections, which provide that the operation of the spent conviction scheme in Part VIIC of the Crimes Act 1914 is not affected by the relevant section.

Item 48 Paragraph 158(g)
Item 49 Paragraph 158(h)
Item 50 Paragraph 158(l)
Item 51 Paragraph 158(m)

These items amend section 158 to reflect the ABA’s new functions in relation to datacasting.

Item 52 Paragraph 202(4)(c)
Item 53 Subsection 202(5)

Section 202 sets out the circumstances in which a person can be compelled to give evidence or produce documents at an ABA hearing. (Section 182 gives the ABA power to hold hearings.)

Subsection 202(4) allows a ‘journalist’ to refuse to answer questions or produce documents at an ABA hearing, if to do so would reveal the identity of a confidential source, where the information from the journalist’s source was used for a ‘television or radio program’. Item 52 extends the scope of the subsection 202(4) protection to information used for datacasting content.

Subsection 202(5) defines ‘journalist’ for the purposes of subsection 202(4) as a person involved in making ‘television or radio programs’ of a news, current affairs, information or documentary character. Item 53 extends this definition of ‘journalist’ to people engaged in making datacasting content of this character.

Item 54 Section 204 (Table)

This item adds refusal to allocate a licence under new section 38B (2-station markets) to the list of AAT-reviewable decisions in the Table in section 204.

Item 55 Section 206

Section 206 provides that for the purposes of the law of defamation, the ‘broadcasting’ of matter is taken to be publication of the matter in a permanent form. This item extends section 206 to cover the ‘datacasting’ of matter.

Item 56 Subsection 214(1)

Subsection 214(1) of the Act makes provision for certain procedures for continuing offences against the control rules (Part 5 of the Act) or the licensing provisions (Part 10 of the Act). This item extends that provision to the new offences in proposed subclauses 49(2) and 50(3) of Schedule 6 (which relate to providing a datacasting service without a datacasting licence), or subclauses 52(2) or 53(5) (which relate to breach of licence conditions or contravening a remedial direction).

Item 57 New section 216C

Item 57 inserts a new section 216C in the BSA. Section 216C gives effect to proposed Schedule 6 of the BSA, which deals with the regulation of datacasting services. Schedule 6 is inserted by item 140 below.

Item 58 Subclause 1(1) of Schedule 1
Item 59 Subclause 1(2) of Schedule 1
Item 60 Subclause 1(2) of Schedule 1

Items 58-66 amend Schedule 1 of the BSA. Schedule 1 of the BSA sets out mechanisms to be used in deciding whether a person is in a position to exercise control of a licence, a newspaper or a company for the purposes of the BSA, especially the control provisions in Part 5 (see section 7).

Items 58-60 amend the legislative essay in clause 1 of Schedule 1 to reflect the substantive amendments to Part 5 and Schedule 1 by items 25-39 above and 61-66 below.

Item 61 Paragraph 2(1)(b) of Schedule 1
Item 62 New paragraph 2(1)(ba) of Schedule 1
Item 63 New subclause 2(2A) of Schedule 1

Clause 2 of Schedule 1 of the BSA sets out circumstances in which a person is treated as being in a position to exercise control of a licence or company. Under paragraph 2(1)(b) of Schedule 1, if:

(i) the person is the licensee; or

(ii) the person, either alone or with an ‘associate’ (as defined in subsection 6(1) of the BSA), is in a position to exercise control of the selection or provision of a significant proportion of the programs broadcast by the licensee; or

(iii) the person, either alone or with an ‘associate’, is in a position to exercise control of a significant proportion of the operations of the licensee;

then the person is treated as being in a position to exercise control of the licence.

Item 62 inserts a new paragraph 2(1)(ba) in Schedule 1, which includes a corresponding rule to paragraph 2(1)(b) in relation to a datacasting transmitter licence. Under this rule, a person will be in a position to exercise control of a DTL if:

(i) the person is the licensee; or

(ii) the person, either alone or with an ‘associate’ (as defined in subsection 6(1) of the BSA), is in a position to exercise control of the selection or provision of a significant proportion of the datacasting content transmitted by the licensee; or

(iii) the person, either alone or with an ‘associate’, is in a position to exercise control of a significant proportion of the operations of the licensee in transmitting datacasting services under the licence.

The reference to ‘provision’ of datacasting content is not intended to refer to involvement in the arrangements for technical delivery of the content, for example, transmission of a signal from studio to transmitter, but instead is intended to refer to involvement in the preparation or creation of the content.

Item 61 amends paragraph 2(1)(b) consequential upon item 62.

Subclause 2(2) excludes certain program-supply agreements from the scope of paragraph 2(1)(b).

Item 63 inserts a new subclause 2(2A) in Schedule 1 which excludes from the rule in new paragraph 2(1)(ba) (which deems certain persons to be in a position to exercise control of a datacasting transmitter licence) the provision of datacasting content to the licensee under an agreement if:

• the conditions of the agreement relate only to the datacasting content so supplied or its promotion; and

• the content so supplied is a minority of the datacasting content transmitted by the licensee.

It is intended to provide the flexibility for a DTL licensee to either:

• also be the content provider under a datacasting licence; or

• provide transmission services to other persons who provide content under datacasting licences, while not itself being involved in the selection or provision of datacasting content (see paragraph 45(1)(b) of proposed Schedule 6).

In the latter case, it is intended that if a person providing content provides at least half the content transmitted by the licensee, the content provider will be taken to be in a position to exercise control of the DTL.

Item 64 Paragraph 4(2)(b) of Schedule 1
Item 65 New paragraph 4(2)(ba) of Schedule 1
Item 66 Subclause 4(4) of Schedule 1 (new paragraph (bb) of the definition of media company)

Subclause 4(1) of Schedule 1 is intended to exclude ordinary commercial loan agreements with banks and other financial institutions from consideration in deciding whether the lender, or any person who is in a position to exercise control of the lender, is in a position to exercise control of a ‘media company’.

For this purpose a ‘media company’ is defined in subclause 4(4) as a company which is (a) a commercial licensee, (b) a subscription licensee, (c) a newspaper publisher, or (d) in a position to exercise control of a company covered by any of those paragraphs.

However, subclause 4(2) limits the scope of the subclause 4(1) exclusion. One of these limits is paragraph 4(2)(b). Where the lender, or a person who is in a position to exercise control of the lender, controls the selection or provision of any of the programs to be broadcast by the licensee, subclause 4(1) does not apply.

The effect of items 64 and 65 is to add a specific rule for datacasters in new paragraph 4(2)(ba), which corresponds to the existing rule for broadcasters in paragraph 4(2)(b). Item 66 adds new paragraph 4(4)(bb) to the ‘media company’ definition, covering a company which is a DTL licensee.

Item 67 Paragraph 7(1)(m) of Schedule 2

This item is one of a number of amendments to change references in the Act from ‘digital mode’ to ‘SDTV digital mode’. ‘Digital mode’ is a general term defined in clause 4 of Schedule 4 referring to a range of digital transmission formats, including SDTV and HDTV modes. The specific SDTV and HDTV modes are defined in new clauses 4A and 4B of Schedule 4, inserted by item 79 below.

Paragraph 7(1)(m) is a CTV licence condition that requires the simulcast of the analog and SDTV digital services. The simulcast period is provided for in the commercial conversion scheme, as required by clauses 6 and 8 of Schedule 4 of the BSA.

The amendment is consequential on the amendment in item 80 to require the continuous provision of an SDTV version of the digital television service by CTV licensees during the simulcast period.

Item 68 Paragraph 7(1)(n) of Schedule 2

Paragraph 7(1)(n) of Schedule 2 of the BSA is a CTV licence condition designed to ensure that digital broadcasting format standards are binding on CTV licensees. Clause 37 of Schedule 4 of the BSA currently provides for such standards.

Clause 37 is replaced with a number of provisions (new clauses 37-37M, inserted by item 126 below), dealing with HDTV and SDTV format and HDTV quota standards. This item amends paragraph 7(1)(n) to refer to the new provisions which relate to format standards, i.e. new Division 1 of Part 4 of Schedule 4 of the BSA (new clauses 37-37D).

Item 69 New paragraph 7(1)(na) of Schedule 2

This item adds a new CTV licence condition as new paragraph 7(1)(na) of Schedule 2 of the BSA. It will ensure that HDTV quota standards under new Division 2 of Part 4 of Schedule 4 (new clauses 37E-37M) are binding on CTV licensees.

Item 70 New paragraphs 18(2)(p), (q) and (r) of Schedule 3

Subclause 18(2) of Schedule 3 of the BSA sets out those powers of the ABA which cannot be delegated under subclause 18(1). These new paragraphs ensure that significant powers, such as the making of disallowable instruments or the making of DCPs, cannot be delegated by the ABA.

Item 71 Clause 1 of Schedule 4

This item amends the simplified outline in clause 1 of Schedule 4 consequential upon the amendment in item 80 to require the continuous provision of an SDTV version of the digital television service by CTV licensees during the simulcast period.

Item 72 Clause 1 of Schedule 4
Item 73 Clause 1 of Schedule 4

These items amend the simplified outline in clause 1 of Schedule 4 to reflect later substantive amendments made by item 126 (new Divisions 1 and 2 of Part 4 of Schedule 4, concerning format standards and quotas) and item 139 (new clause 60A, concerning reviews of certain matters by 1 January 2004).

Item 74 Clause 2 of Schedule 4 (definition of datacasting service)

This item repeals the definition of ‘datacasting service’ in clause 2 of Schedule 4. Subsection 6(1) of the Act will define the term for the Act as a whole (see item 12 above).

Item 75 Clause 2 of Schedule 4 (new definition of designated teletext service)

This item defines ‘designated teletext service’, which is used in new subclause 53(2A), inserted by item 137 below.

A ‘designated teletext service’ is a teletext service provided by a commercial broadcaster for at least two years prior to the commencement of Schedule 6, provided the service remains substantially the same as the service provided throughout that period.

The intention is that a ‘designated teletext service’ will be disregarded for the purposes of calculating the datacasting charge payable by the licensee (see item 137 below).

As explained in the notes on clause 2 of the Bill (the commencement provision), this item will commence on Royal Assent.

Item 76 Clause 2 of Schedule 4
Item 77 Clause 2 of Schedule 4

These items insert signpost definitions of ‘HDTV digital mode’ and ‘SDTV digital mode’ in clause 2 of Schedule 4. The substantive definitions are new clauses 4A and 4B of Schedule 4, inserted by item 79 below.

Item 78 Clause 2 of Schedule 4 (new definition of television broadcasting service)

This item defines ‘television broadcasting service’ in clause 2 of Schedule 4 for the purposes of new clauses 4A and 4B of Schedule 4, to ensure that the generic reference to ‘television broadcasting service’ in clauses 4A and 4B relates to both national and commercial television broadcasting services.

Item 79 New clauses 4A and 4B of Schedule 4

This item adds clauses 4A and 4B to Schedule 4, which define ‘HDTV digital’ mode and ‘SDTV digital mode’. Both modes are different formats of ‘digital mode’ transmissions, as defined in clause 4 of Schedule 4.

The technical concepts ‘high definition’ and ‘standard definition’, in relation to digital television broadcasting, are not defined in the Act. These terms are well understood in the television broadcasting industry, and it is expected that they will be given their normal industry meaning. As a guide, HDTV and SDTV will have the technical features described in Australian Standard AS 4599-1999 ‘Digital television – Terrestrial broadcasting – Characteristics of digital terrestrial television transmissions’.

Item 80 Paragraphs 6(3)(a), (b) and (c) of Schedule 4

Clause 6(3) of Schedule 4 to the BSA sets out policy objectives for Part A of the commercial television conversion scheme. This item amends the policy objectives in paragraphs 6(3)(a), (b) and (c) to require commercial television broadcasters to simulcast their commercial television broadcasting services in SDTV digital mode throughout the simulcast period.

Item 81 Paragraph 6(3)(e) of Schedule 4

This item amends paragraph 6(3)(e) to clarify that each additional channel for digital broadcasting should be 7 MHz, regardless of whether or not more than one channel is currently used to provide the analog broadcasting service.

Item 82 Paragraph 6(3)(f) of Schedule 4

This item amends paragraph 6(3)(f) consequential upon item 80.

Item 83 New paragraphs 6(3)(h) and (ha) of Schedule 4

This item replaces paragraph 6(3)(h) with paragraphs 6(3)(h) and (ha).

Under existing paragraph 6(3)(h), and subclauses 8(4) to (6) of Schedule 4, there is an implication that CTV licensees will be able to select whether to surrender the set of channels used for the analog services prior to the end of the simulcast period, or those used for the digital services. However, the end of the simulcast period will provide an opportunity for the ABA to re-plan the BSB spectrum used for terrestrial television services to take full advantage of the technical characteristics of the digital transmission system. The provisions in new paragraph 6(3)(ha) will allow the ABA greater flexibility to allocate digital channels at the end of the simulcast period, having regard to the need to plan the most efficient use of the spectrum, and other policy objectives of the commercial television conversion scheme (such as that in paragraph 6(3)(j) regarding coverage and potential reception quality of the digital signal).

New paragraph 6(3)(h) has the same effect as the first part of existing paragraph 6(3)(h), i.e. that at the end of the simulcast period, analog transmission is to cease.

Item 84 Paragraph 6(3)(j) of Schedule 4

This item amends paragraph 6(3)(j) consequential upon item 80.

Item 85 Paragraph 6(3)(k) of Schedule 4

This item amends paragraph 6(3)(k) of Schedule 4 to the BSA consequential upon the proposed new regulatory scheme for datacasting services. The amendment provides that Part A of the commercial television conversion scheme must be directed towards ensuring the achievement of the objective that CTV licensees be permitted to use any spare transmission capacity that is available on the digital transmission channels for the purpose of the transmission of datacasting services in accordance with datacasting licences.

Item 86 New subclauses 6(5A), (5B) and (5C) of Schedule 4

Where an additional licence is allocated under section 38A or section 38B (solus or two-station markets respectively), new subclause 6(5A) allows the licensee to elect, by written notice to the ABA, to multichannel the existing and new services in digital mode. In this situation, a modified form of the provisions of paragraphs 6(3)(d), (e) and (ha) are applied by new subclause 6(5B), to take account of the fact that no additional 7 MHz spectrum channel is required:

• new paragraph 6(5B)(a) corresponds to paragraph 6(3)(d), and provides for multichannelling both services during the simulcast period;

• new paragraph 6(5B)(b) corresponds to amended paragraph 6(3)(e), and provides for each channel to be 7 MHz bandwidth;

• new paragraph 6(5B)(c) corresponds to new paragraph 6(3)(ha), and provides for the ABA to allot channels to be used at the end of the simulcast period.

The effect of new subclause 6(5C) is that for all additional licences allocated under section 38B, regardless of whether a multichannelling election under clause 6(5B) has been made, paragraphs 6(3)(c), (d), (e), (f), (h) and (j) (relating to the analog simulcast period) do not apply, as all section 38B licences will authorise digital-only transmission (see proposed subsection 38B(18)).

Item 87 New subclause 6(6A) of Schedule 4

Clause 6 of Schedule 4 sets out policy objectives for the ABA’s commercial television conversion scheme. The scheme is to be in two parts (see subclause 6(2)); Part A for non-remote areas (metropolitan and regional areas) and Part B for remote areas. (Remote areas may be determined by the ABA under clause 5 of Schedule 4.)

Under paragraphs 6(3)(a) and (b), the policy objectives of Part A include the commencement of SDTV services in (a) metropolitan areas by 1 January 2001, and (b) in regional areas by a date between 1 January 2001 and 1 January 2004 which is determined by the ABA.

Currently, Schedule 4 sets out very few requirements for Part B of the scheme. The requirements of Part B, including the commencement date for television services in digital mode, are a matter for the ABA to determine. This reflects the technical and other considerations which must still be resolved in relation to provision of digital television in remote areas. However, the current provisions do not include a requirement that remote broadcasters, when digital services commence, must provide an SDTV version of the signal.

New subclause 6(6A) requires the ABA to set a commencement date for the transmission of the commercial television broadcasting service in SDTV digital mode in the area concerned. The commencement date will still be at the discretion of the ABA.

Item 88 Subclause 6(7) of Schedule 4

This item amends subclause 6(7) consequential upon item 80.

Item 89 New subclause 6(7A) of Schedule 4

New subclause 6(7A) is consequential on new subclause 6(6A). It provides that the simulcast period for a remote licence area under Part B of the commercial conversion scheme begins on the date specified under subclause 6(6A) and continues for the period determined by the ABA under the scheme.

Item 90 Subclause 6(8) of Schedule 4

This item amends subclause 6(8) consequential upon item 80.

Item 91 New paragraphs 6(8)(c), (d) and (e) of Schedule 4 – ‘digital program-enhancement content’, ‘multichannelling’ and ‘electronic program guides’

Under paragraph 7(1)(m) of Schedule 2 of the BSA as proposed to be amended, licensees must not broadcast a television program in SDTV digital mode during the simulcast period, unless the program is broadcast simultaneously by the licensee in analog mode in the licence area concerned. However, subclause 6(8) of Schedule 4 provides for certain exceptions, determined by the ABA. These exceptions apply to paragraph 7(1)(m) by virtue of the operation of subclause 7(4) of Schedule 2.

This item adds to the existing exceptions to the simulcast rule, and ensures that ‘digital program-enhancement content’ (as defined in new subclauses 6(14) and 6(15), inserted by item 94 below), ‘multichannelling’ and ‘electronic program guides’ (as defined in new subclause 6(24) below) are exempt from the simulcast requirements (see new paragraphs 6(8)(c), (d) and (e) respectively).

‘Multichannelling’ will be allowed only in very limited circumstances, set out in new paragraph 6(8)(d). Where a ‘designated event’, which is broadcast live, extends beyond the scheduled finishing time into another scheduled program, the broadcaster may multichannel the live broadcast and the other program, provided that:

• the delayed finish to the designated event is beyond either the broadcaster’s control, or the control of any person who directly or indirectly supplied the program to the broadcaster (for example, where extra time is added to a day’s play in a test cricket match to make up for rain delays); and

• the other program was scheduled by the broadcaster at least one week before the start of the designated event.

A ‘designated event’ is either a sporting event or an event declared by the ABA by disallowable instrument (see the notes to new subclause 6(20), inserted by item 94 below).

New paragraph 6(8)(e) exempts from the simulcast requirements electronic program guides, which are defined in new subclause 6(24), inserted by item 94 below.

Item 92 New subclause 6(8A) of Schedule 4

New subclause 6(8A) ensures that any enhancements, allowed multichannelling or a program guide are to be treated as part of the commercial television broadcasting service. This provision is intended to ensure that, even if enhancements, multichannelling or a program guide might also be considered to be a datacasting service, the CTV licensee concerned does not need a datacasting licence to provide these additional services, provided they comply with the provisions of paragraphs 6(8)(c), (d) and (e).

Subclause 6(8A) does not treat enhancements, allowed multichannelling or program guides as part of the broadcasting service for the purposes of the simulcast obligation (paragraph 6(3)(c) and subclauses 6(7), (8) and (11)) or the HDTV quota provisions (Division 2 of Part 4 of Schedule 4).

Item 93 Subclause 6(11) of Schedule 4

This amendment is consequential upon item 80.

Item 94 New subclauses 6(14)-(24) of Schedule 4

This item adds new subclauses 6(14)-(24).

Category A digital program-enhancement content – new subclause 6(14)

New subclause 6(14) defines ‘category A digital program-enhancement content’ for the purposes of new paragraph 6(8)(c), inserted by item 91 above. A digital enhancement may be content in any form (e.g. text, data, sound, still or moving images) which is closely and directly linked to the subject matter of a television program (the ‘primary program’), is for the sole purpose of enhancing the primary program, and is transmitted simultaneously with the primary program. A note to subsection (14) gives examples of category A digital program-enhancement content.

The ‘primary program’ means the program that is transmitted simultaneously in SDTV digital mode and in analog mode (subject to any determination by the ABA under subclause 6(9) or (10)). It is intended that, consistent with the definition of ‘program’ in subsection 6(1) of the BSA, the reference to ‘primary program’ in clause 6 includes advertising or sponsorship matter.

From time to time, a CTV licensee may also transmit an HDTV version of a simulcast program, in addition to the SDTV version. The provision in subparagraph 6(14)(k)(i) is not intended to prevent an enhancement which is provided in connection with an SDTV version of the program, also being provided in connection with an HDTV version of the same primary program.

Category B digital program enhancement content – new subclauses 6(15)-(19)

New subclause 6(15) defines ‘category B digital program-enhancement content’ for the purposes of new paragraph 6(8)(c), inserted by item 91 above.

Category B digital program-enhancement content is defined as a program that provides simultaneous live transmission of two overlapping sporting events in the same sport at a particular venue.

The term ‘venue’ is intended to refer to a single geographical location at which the event is held; e.g. an outdoor oval or stadium, or a complex of tennis courts.

This category would allow simultaneous live transmission of, for example:

• two tennis matches in a tournament on different courts in the same centre or complex.

However, it would not allow simultaneous live transmission of:

• two rugby league matches at different grounds; this would not satisfy the ‘same venue’ requirement; or

• swimming and gymnastics at the Olympic Games, even if both occur in adjacent buildings in the same complex; this would not satisfy the ‘same sport’ requirement.

The transmission of the second sporting event must be live, and simultaneous with the live transmission of the first sporting event. ‘Live’ in subclause 6(15) is intended to have its ordinary meaning, i.e. without any delay beyond that inherent in transmission.

Under subclauses 6(16)-(19), the ABA may determine by disallowable instrument whether two or more specified sporting events involve the same sport or not. Use of this mechanism will give broadcasters greater certainty in ambiguous cases, e.g. athletic disciplines.

Multichannelling – new subclauses 6(20)-(23)

New subclause 6(20) defines a ‘designated event’, for the purposes of the multichannelling exception, as a sporting event or an event declared by the ABA. New subclauses 6(21)-(23) allow the ABA to declare, by disallowable instrument, an event to be a ‘designated event’. It is intended that this power would be available to be used for important public events, such as live coverage of Centenary of Federation celebrations.

Electronic program guides – new subclause 6(24)

New subclause 6(24) defines an ‘electronic program guide’ as matter transmitted using a digital modulation technique, where the matter consists of no more than:

(a) a schedule of television programs provided by any or all commercial and national television broadcasting services (‘the schedule’);

which may be combined with one or both of the following;

(b) items of text providing brief factual information or comment about programs in the schedule; and

(c) a facility which does no more than enable an end-user to directly select a program from among those in the schedule, and commence viewing that program.

Paragraphs (a) and (b) are intended to describe the kind of material that commonly appears in program guides in newspapers and magazines.

Item 95 New clause 7A of Schedule 4

New clause 7A of Schedule 4 reflects the ABA’s experience in developing the television conversion schemes and planning spectrum for digital transmission. It establishes a mechanism to ensure that digital channel plans (DCPs) are able to be made by the ABA under the commercial conversion scheme. (New clause 22A, inserted by item 116 below, is the equivalent provision for DCPs to be made under the national conversion scheme.)

The conversion schemes currently provide for the ABA to make DCPs, and a number of DCPs have been made under the commercial conversion scheme. Transitional arrangements relating to existing DCPs are included in item 144 below.

New subclause 7A(1) allows the commercial conversion scheme to provide for the ABA to make one or more DCPs that (a) allot channels to CTV licensees, (b) set out technical limitations on the use of a channel, and (c) set out whether the use of a channel depends on a specified event or circumstance.

The scheme may provide that a DCP may also include other matters (new subclause 7A(2)).

The scheme may also provide for a DCP to be varied (new subclause 7A(3)).

Item 96 New subclause 8(4) of Schedule 4

Subclauses 8(4)-(6) (dealing with the handback of analog spectrum at the end of the simulcast period) are repealed by this amendment and replaced with new subclause 8(4). This change reflects the changes made to paragraph 6(3)(h) of Schedule 4 (see item 83 above).

Under new subclause 8(4), Part A of the commercial conversion scheme must make provision for the surrender of transmitter licences at the end of the simulcast period, and the issue of replacement licences authorising digital transmission only.

Item 97 Paragraph 8(7)(a) of Schedule 4

Subclause 8(7) of Schedule 4 requires Part A of the commercial conversion scheme to provide for the return of spectrum if the licensee does not comply with certain HDTV format or quota standards. The amendments in this item extend the existing provisions relating to the requirement to surrender transmitter licences, to SDTV and HDTV format standards and HDTV quota standards. The format standards will be in regulations under clauses 37-37C, and the quota standards will be in regulations under subclauses 37E-37H.

Item 98 Subclause 8(8) of Schedule 4

If a licensee breaches any applicable standard under clauses 37, 37A or 37E, subclause 8(7) requires the scheme to provide that the transmitter licence be surrendered.

However, subclause 8(8) as amended by this item allows the scheme to provide for a replacement licence to be issued, if the licence was surrendered as mentioned in subclause 8(7) because of a breach of the HDTV format or quota standards in subclauses 37A(1), 37E(1) and 37E(3).

The amount of transmission capacity for the replacement licence will be less than for the surrendered licence, as the HDTV quotas will not apply (see subclause 8(8) and proposed subclause 37E(4)).

Item 99 Subclause 8(9) of Schedule 4

Subclause 8(9) requires the commercial conversion scheme to provide for transmitter licences to be varied to allow digital transmission at the end of the post-simulcast period. However, subclauses 6(3) and 8(4) (as amended by items 83 and 96 above) provide for the surrender of transmitter licences after the simulcast period ends and the issue of replacement licences. Accordingly, subclause 8(9) is repealed.

Item 100 Subclause 8(10) of Schedule 4

This item makes an equivalent amendment to subclause 8(10) of Schedule 4 (applying to remote licence areas) as the amendment made by item 97 to subclause 8(7) (applying to non-remote licence areas).

Item 101 New subclause 8(10A) of Schedule 4

This item adds a new subclause 8(10A), which clarifies that Part B of the commercial conversion scheme (applying to remote licence areas) can require the ACA to issue a transmitter licence to replace a licence surrendered because of a breach of the HDTV format or quota standards in subclauses 37C(1), 37G(1) and 37G(3). The amount of transmission capacity for the replacement licence will be less than for the surrendered licence, as the HDTV quotas will not apply (see subclause 8(8) and proposed subclause 37G(4)).

Item 102 Paragraphs 19(3)(a), (b) and (c) of Schedule 4

Subclause 19(3) of Schedule 4 to the BSA sets out policy objectives for Part A of the national television conversion scheme. This item amends the policy objectives in paragraph 19(3)(a), (b) and (c) to require national broadcasters to simulcast their national broadcasting services in SDTV digital mode throughout the simulcast period.

A similar amendment to subclause 6(3), dealing with the commercial conversion scheme, is made by item 80 above.

Item 103 New paragraph 19(3)(e) of Schedule 4

New paragraph 19(3)(e), which relates to the national conversion scheme, corresponds to new paragraph 6(3)(e), which relates to the commercial conversion scheme (see item 81 above).

Item 104 Paragraph 19(3)(f) of Schedule 4

This item is consequential upon item 102.

Item 105 New paragraphs 19(3)(h) and (ha) of Schedule 4

New paragraphs 19(3)(h) and (ha), which relate to the national conversion scheme, corresponds to new paragraphs 6(3)(h) and (ha), which relate to the commercial conversion scheme (see item 83 above).

Item 106 Paragraph 19(3)(j) of Schedule 4

This item is consequential upon item 102.

Item 107 Paragraph 19(3)(k) of Schedule 4

This item amends paragraph 19(3)(k) of Schedule 4 to the BSA consequential upon the proposed new regulatory scheme for datacasting services. The amendment provides that Part A of the national television conversion scheme must be directed towards ensuring the achievement of the objective that national broadcasters be permitted to use any spare transmission capacity that is available on the digital transmission channels for the purpose of the transmission of datacasting services in accordance with datacasting licences.

A corresponding amendment to paragraph 6(3)(k), dealing with the commercial conversion scheme, is made by item 85 above.

Item 108 New subclause 19(6A) of Schedule 4

Clause 19 of Schedule 4 requires the ABA to make a digital conversion scheme for national broadcasters. Like the commercial conversion scheme, it is to consist of Parts A and Part B. New subclause 19(6A) corresponds to new subclause 6(6A), inserted by item 87 above.

Item 109 Subclause 19(7) of Schedule 4

This amendment is consequential upon item 102.

Item 110 New subclause 19(7A) of Schedule 4

New subclause 19(7A) of Schedule 4 for the national scheme corresponds to new subclause 6(7A) for the commercial scheme, inserted by item 89 above.

Item 111 Subclause 19(8) of Schedule 4

This amendment is consequential upon item 102.

Item 112 New paragraphs 19(8)(c), (d) and (e) of Schedule 4

This item amends subclause 19(8) in a corresponding way to the amendment of subclause 6(8) made by item 91 above.

Item 113 New subclause 19(8A)

New subclause 19(8A) for the national conversion scheme corresponds to new subclause 6(8A) for the commercial conversion scheme (see item 92 above).

Item 114 Subclause 19(11) of Schedule 4

This amendment is consequential upon item 102.

Item 115 New subclauses 19(14)-(24) of Schedule 4

This item adds new subclauses 19(14)-(24), which relate to digital program-enhancement content, multichannelling and electronic program guides, corresponding to new subclauses 6(14)-(24) inserted by item 94 above.

Item 116 New clause 22A of Schedule 4

New clause 22A allows the national conversion scheme to provide for DCPs in the same way as clause 7A (inserted by item 95 above) does for the commercial conversion scheme.

Item 117 Subclauses 23(4), (5) and (6) of Schedule 4

This amendment replaces subclauses 23(4), (5) and (6) with a new subclause 23(4). This amendment for the national scheme corresponds to the amendment to subclauses 8(4), (5) and (6) for the commercial scheme relating to the return of spectrum at the end of the simulcast period (see item 96 above).

Item 118 Paragraph 23(7)(a) of Schedule 4

The amendment to paragraph 23(7)(a) of Schedule 4 corresponds to the amendment to clause 8(7)(a) of Schedule 4 concerning HDTV and SDTV format standards and HDTV quota standards, made by item 97 above.

Item 119 Subclause 23(8) of Schedule 4
Item 120 Subclause 23(9) of Schedule 4
Item 121 Subclause 23(10) of Schedule 4
Item 122 New subclause 23(10A) of Schedule 4

These amendments concern the issue of a replacement transmitter licence to a national broadcaster, where the existing transmitter licence was surrendered for breach of an HDTV format or quota standard. The corresponding amendments for commercial broadcasters are in items 98-101 above.

Item 123 Subclause 35(1) of Schedule 4

This amendment is consequential upon item 102.

Item 124 Subclause 36(2) of Schedule 4

This amendment repeals subclause 36(2), which contains an erroneous cross-reference and has no legal effect.

Item 125 Clause 36A of Schedule 4

Clause 36A of Schedule 4 is no longer necessary, given the passage of the National Transmission Network Sale Act 1998. This item therefore repeals the clause.

Item 126 New clauses 37, 37A, 37B, 37C, 37D, 37E, 37F, 37G, 37H, 37J, 37K, 37L and 37M of Schedule 4

Clause 37 of Schedule 4 is currently the basis for regulations setting HDTV quotas, and SDTV and HDTV format standards. Clause 37 is in Part 4 of Schedule 4 (clauses 37-41A).

This item replaces clause 37 with a number of provisions. Part 4 of Schedule 4 will be split into Divisions, with provisions for format and quota standards in Divisions 1 and 2 of Part 4. The scheme of Divisions 1 and 2 will be as follows:

Division 1 – Digital television format standards

cl 37 Non-remote areas – SDTV format standards

cl 37A Non-remote areas – HDTV format standards

cl 37B Remote areas – SDTV format standards

cl 37C Remote areas – HDTV format standards

cl 37D Compliance by national broadcasters

Division 2 – HDTV quota standards

cl 37E Non-remote areas – HDTV quotas for commercial broadcasters

cl 37F Non-remote areas – HDTV quotas for national broadcasters

cl 37G Remote areas – HDTV quotas for commercial broadcasters

cl 37H Remote areas – HDTV quotas for national broadcasters

cl 37J HDTV version

cl 37K Compliance by national broadcasters

cl 37L High-definition television programs

cl 37M Prime viewing hours

Broadcasters will be required to simulcast their analog service in SDTV digital mode. For commercial broadcasters, this will be a condition of their licence under paragraph 7(1)(k) of Schedule 2, in its application to paragraph 6(3)(c) of Schedule 4. Commercial broadcasters will be required to comply with digital television format standards by paragraph 7(1)(n) of Schedule 2 (see item 68). For national broadcasters, clause 37D of Schedule 4 will require compliance with applicable digital television format standards.

Broadcasters will also be obliged to comply with the HDTV transmission quotas determined by regulations made under new Division 2 of Schedule 4 (clauses 37E-37M). For commercial broadcasters, this will be a condition of their licence under new paragraph 7(1)(na) of Schedule 2, inserted by item 69 above. For national broadcasters, new clause 37K of Schedule 4 will require compliance with applicable regulations made under Division 2 of Schedule 4.

The terms ‘remote licence area’ and ‘remote coverage area’, used in clauses 37B, 37C, 37G and 37H, are defined in clause 2 of Schedule 4. A ‘remote licence area’ is a licence area included in a determination of the ABA under clause 5 of Schedule 4. An area corresponding to such a licence area is also a ‘remote coverage area’ for national broadcasters.

Division 1 – Digital television format standards

Clause 37 Non-remote areas – SDTV format standards

Subclause 37(1) allows regulations to be made determining format standards for SDTV transmission in non-remote areas by all commercial and national broadcasters.

Subclauses 37(2) and (3) are application provisions. For commercial broadcasters, such regulations could apply to licence areas which are not remote licence areas. As national broadcasters do not hold BSA broadcasting licences, such regulations could apply to coverage areas which are not remote coverage areas.

Clause 37A Non-remote areas – HDTV format standards

Subclause 37A(1) allows regulations to be made determining format standards for HDTV transmission in non-remote areas by all commercial and national broadcasters.

Subclauses 37A(2) and (3) are application provisions, corresponding to subclauses 37(2) and (3) above. However, HDTV standards will not apply to replacement transmitter licences issued under subclauses 8(8) or 23(8) of Schedule 4. Such a replacement transmitter licence could be issued if the original licence was suspended for breach of any applicable HDTV standard or HDTV quota (see item 98 above).

Clause 37B Remote areas – SDTV format standards

Subclause 37B(1) allows regulations to be made determining format standards for SDTV transmission in remote areas by all commercial and national broadcasters.

Subclauses 37B(2) and (3) are application provisions, corresponding to subclauses 37(2) and (3) above.

Clause 37C Remote areas – HDTV format standards

Subclause 37C(1) allows regulations to be made determining format standards for HDTV transmission in remote areas by all commercial and national broadcasters.

Subclauses 37C(2) and (3) are application provisions, corresponding to subclauses 37A(2) and (3) above.

Clause 37D Compliance by national broadcasters

As outlined above, regulations made under clause 37 will be binding on commercial broadcasters as licence conditions. As national broadcasters do not hold broadcasting licences, clause 37D requires a national broadcaster to comply with standards under clauses 37-37C. It is a duty of the Board of the ABC and the SBS to ensure that the requirement is not contravened (paragraph 8(1)(d) of the Australian Broadcasting Corporation Act 1983 and paragraph 10(1)(d) of the Special Broadcasting Service Act 1991).

Division 2 – HDTV quota standards

Clause 37E Non-remote areas – HDTV quotas for commercial television broadcasting licensees

General quotas

New subclause 37E(1) requires regulations to be made determining an HDTV transmission quota for commercial broadcasters in non-remote areas.

In the ordinary case, the HDTV version must be a simulcast of the licensee’s analog service (see paragraphs 37E(1)(a), (b) and (c)(i)). This is subject to two exceptions:

• programs covered by an ABA determination under subclause 6(9) or 6(10) are exempt from the analog-SDTV simulcast requirement. Thus when a program covered by such a determination is transmitted on the analog version of the service, a different program may be transmitted on the SDTV version of the service. In this case it is the program on the SDTV version which is to be simulcast on the HDTV version (see subparagraph 37E(1)(c)(ii));

• in those two-station markets where a third licence is allocated under new section 38B (see item 5AC above), the HDTV version must be a simulcast of the programs on the licensee’s SDTV digital service, as there will be no analog version of the service in this case (see paragraphs 37E(1)(a), (b) and (d)).

The quota will be 20 hours per week of ‘true’ HDTV programs. In this context, ‘true’ HDTV programs are HDTV programs in the form defined in new paragraphs 37L(1)(c) and (d) of Schedule 4.

HDTV transmissions must commence as soon as practicable after the commencement of the SDTV simulcast transmission. The quota must be achieved within two years of the start of the simulcast period referred to in paragraph 6(3)(c) of Schedule 4 (see new subclause 37E(2)). However, within those two years, broadcasters will be able to progressively increase the amount of HDTV transmissions, provided the target is reached by the end of that period.

Prime-time quotas

New subclause 37E(3) allows regulations to be made determining a separate HDTV prime-time transmission HDTV quota for commercial broadcasters in non-remote areas. (Under new clause 37M, prime-time viewing hours are between 6pm and 10:30pm each day, unless a different period is prescribed.)

Application

Subclause 37E(4) is an application provision. HDTV quotas under clause 37E will apply to commercial broadcasters in non-remote licence areas. However, they will not apply to replacement transmitter licences under subclause 8(8) (i.e. a reduced-capacity transmitter licence allocated to replace one surrendered under subclause 8(7) for breach of the applicable HDTV format or quota standards in clauses 37A and 37E). They will not apply in two-station markets where a third licence has been allocated under new section 38B and there has been an election by the holder of the new licence under subclause 6(5A) to multichannel the existing and new services (see item 86 above).

Clause 37F Non-remote areas – HDTV quotas for national broadcasters

New clause 37F, which provides for HDTV quotas for national broadcasters, corresponds to new clause 37E for commercial broadcasters. However, there are two essential differences.

Firstly, as the section 38B mechanism for an additional third commercial licence in a two-station market is not relevant here, there is no equivalent of paragraph 37E(1)(d). It is always the analog service which must be simulcast. (The same exception discussed in the notes on clause 37E applies here for programs covered by a determination under subclause 19(9) or 19(10), which are equivalent provisions to subclauses 6(9) and 6(10) for commercial broadcasters.)

Secondly, less stringent rules apply to national broadcasters in relation to the type of HDTV programs transmitted:

• In the case of the ABC and SBS, ‘upconverted’ HDTV programs count for the purposes of the quota. In this context, ‘upconverted’ HDTV programs are those defined in paragraphs 37L(2)(e) and (f) of Schedule 4. The different approach for national broadcasters reflects the fact that few ‘true’ HDTV programs are produced in Europe, from where many ABC and most SBS programs originate.

• The ABC will be required to commence providing HDTV programs as soon as practicable, and to provide 20 hours per week of HDTV programs within two years of the commencement of transmissions in SDTV digital mode in a coverage area, of which at least 4 hours must be ‘true’ HDTV programs. The remainder may be made up of ‘upconverted’ programs. The 4 hours is an interim quota; by 1 January 2006, the full 20 hours must be met by providing ‘true’ HDTV programs (paragraphs 37F(2)(b), and 37L(1)(b) and (2)(b)).

• The SBS will be required to commence providing HDTV programs as soon as practicable, and must provide 20 hours per week of HDTV within two years of the commencement of transmissions in SDTV digital mode in a coverage area. The entire amount may comprise ‘upconverted’ HDTV programs (paragraph 37F(2)(c)).

Clause 37G Remote areas – HDTV quotas for commercial television broadcasting licensees

Clause 37G, which provides for HDTV quotas for commercial broadcasters in remote areas, is the equivalent of clause 37E for non-remote areas.

However, the essential difference is that the power to make standards requiring HDTV quotas for remote areas will be discretionary. Clause 37G allows, but does not require, regulations to be made setting such quotas, as any decision to impose quotas in remote areas will need to take into account the costs and technical feasibility of the provision of HDTV in these areas.

Clause 37H Remote areas – HDTV quotas for national broadcasters

Clause 37H, which provides for HDTV quotas for national broadcasters in remote areas, is the equivalent of clause 37F for non-remote areas. Again, clause 37H allows, but does require, regulations to be made setting such quotas.

Clause 37J HDTV version

Clause 37J makes it clear that a broadcaster need only comply with the applicable HDTV quotas under Division 2 (i.e. clauses 37E, 37F, 37G or 37H) to comply with the obligation in those subclauses to transmit an ‘HDTV version’ of the service. At times when no HDTV programs are being broadcast, HDTV receivers would pick up programs on the broadcasting service transmitted in SDTV digital mode. The HDTV quotas are a minimum and nothing prevents more than the quota of HDTV programs being transmitted in the HDTV version of the service.

Clause 37K Compliance by national broadcasters

As outlined above, regulations made under these provisions will be binding on commercial broadcasters as licence conditions. As national broadcasters do not hold broadcasting licences, clause 37K requires a national broadcaster to comply with an applicable standard under this Division. It is a duty of the Board of the ABC and the SBS to ensure that the requirement is not contravened (paragraph 8(1)(d) of the Australian Broadcasting Corporation Act 1983 and paragraph 10(1)(d) of the Special Broadcasting Service Act 1991).

Clause 37L High-definition television programs

Clause 37L sets out the meaning of a ‘high definition television program’ for the purposes of meeting the quota. Note that this meaning is limited to the application of this Division (concerning HDTV quotas), and provides a description of the kinds of HDTV programs that would satisfy the required quotas set out in the Division, in order to meet minimum picture quality requirements. It does not limit the standards relating to the format in which television programs are transmitted (for example, those made under new clause 37A).

Commercial broadcasters

The concept of ‘high-definition television program’ for commercial broadcasters is used in clauses 37E and 37G; the HDTV quotas for commercial broadcasters.

The following programs would satisfy the definition for commercial broadcasters:

• a program produced in a high-definition video format (see paragraph 37L(1)(c)); or

• a program produced in a non-video format (e.g. 16mm or 35mm film) of equivalent picture quality to a high-definition video format, and then converted to a high-definition video format without in the process losing significant picture quality (see paragraph 37L(1)(d)).

These categories are referred to elsewhere in this Explanatory Memorandum as ‘true’ HDTV, as they involve production in high definition or equivalent picture quality.

National broadcasters

The concept of ‘high-definition television program’ for national broadcasters is used in subclauses 37F and 37H; the HDTV quotas for national broadcasters.

As outlined in the notes to clause 37F above, SBS may provide its entire HDTV quota through ‘upconverted’ programs. This reflects the fact that most SBS programs originate in Europe, where few ‘true’ HDTV programs are produced.

The ABC will have until 1 January 2006 to fulfil HDTV quotas entirely through ‘true’ HDTV programs. The ABC will be required to provide 20 hours per week of HDTV programs within two years of the commencement of transmissions in SDTV digital mode in a coverage area. At least 4 of the 20 hours must be ‘true’ HDTV programs; the remainder may be made up of ‘upconverted’ programs. The 4 hours is an interim quota; by 1 January 2006, the full 20 hours must be met by providing ‘true’ HDTV programs (see paragraphs 37L(1)(b) and 37L(2)(b), in conjunction with paragraph 37F(2)(b)).

‘Upconverted’ HDTV is:

• a program produced in a standard definition video format, and then converted to a high-definition video format (see paragraph 37L(2)(e)); or

• a program produced in an analog video format, then converted to a standard definition digital video format, and then converted to a high-definition digital video format (see paragraph 37L(2)(f)).

(Paragraphs 37L(2)(c) and (d) are identical to paragraphs 37L(1)(c) and (d), i.e. the acceptable categories of ‘true’ HDTV.)

Clause 37M Prime viewing hours

Clause 37M defines prime viewing hours for the purposes of the prime-time HDTV quotas. Prime viewing hours are between 6pm and 10:30pm each day, unless different times are prescribed by regulations.

Division 3 – Captioning standards

Item 126 also inserts a heading, the effect of which will be to place clause 38, dealing with captioning standards, in new Division 3 of Part 4 of Schedule 4.

Item 127 New subclause 38(4A) of Schedule 4
Item 128 New subclauses 38(4B) and (4C) of Schedule 4

Subclause 38(1) requires regulations to be made determining standards for the captioning of television programs for the deaf and hearing impaired. Subclause 38(2) requires those standards to provide for specified goals or targets in relation to the extent of captioning.

Subclause 38(4) requires standards under subclause 38(1) to be directed towards achieving a number of policy objectives:

(a) programs in ‘prime viewing hours’ (as defined in subclause 38(6) in the same way as for the format and quota standards in clauses 37-37M above) should be captioned; and

(b) all news and current affairs programs should be captioned.

New subclauses 38(4A), (4B) and (4C), inserted by these items, limit the scope of the policy objectives in subclause 38(4). These subclauses provide for exemptions to the captioning standards for non-English language programming, music without recognisable words in English and so much of the audio component of a television program that consists of incidental or background music.

Item 129 New Division 4 (clause 39) of Part 4 of Schedule 4

The effect of this amendment and the amendment made by item 132 is to place clause 39, dealing with technical standards, in new Division 4 of Part 4 of Schedule 4.

Item 130 Subclause 39(2) and new subclause 39(2A) of Schedule 4
Item 131 Subclause 39(5) of Schedule 4 (definition of conditional access system)

Clause 39 enables regulations to specify technical standards for transmission of digital broadcasting services, if necessary. The amendments to clause 39 made by these items are intended to ensure that to the extent that any technical standards made under clause 39 address ‘conditional access systems’, they should be directed towards the objective that as far as is practicable, such systems should be open to all providers of ‘eligible datacasting services’.

Subclause 39(2) currently requires standards which deal with ‘conditional access systems’ to be directed towards ensuring that, so far as practicable, those systems are open to all providers of digital television broadcasting services. Item 130 amends subclause 39(2) so that it requires standards about conditional access system to be directed towards ensuring that, as far as practicable, those systems are open to all providers of ‘eligible datacasting services’.

Under subclause 39(5), a ‘conditional access system’ is a conditional access system which relates to the provision of digital broadcasting services, and allows the provider of such a service to determine whether an end-user is able to receive a particular service. Item 131 amends subclause 39(5) so that a ‘conditional access system’ is a conditional access system which relates to the provision of ‘eligible datacasting services’, and allows the provider of such a service to determine whether an end-user is able to receive a particular service.

New subclause 39(2A) defines ‘eligible datacasting service’ as:

(a) a datacasting service provided under, and in accordance with the conditions of, a datacasting licence; or

(b) a television broadcasting service transmitted in digital mode using the BSBs.

Accordingly, any technical standards made under clause 39 for digital broadcasting which relate to conditional access systems must be directed at ensuring, as far as practicable, that those systems are open to all national and commercial providers of digital television broadcasting services and all providers of datacasting services.

Corresponding provisions for datacasting technical standards are in new clause 60 of Schedule 6, inserted by item 140 below.

Item 132 Clause 40 of Schedule 4

Clause 40 of Schedule 4 is repealed by this item. As clause 40 deals with datacasting standards and not digital broadcasting, it is re-enacted as clause 60 of Schedule 6, inserted by item 140 below.

Item 133 New Division 5 (clause 41) of Part 4 of Schedule 4

This item places clause 41, dealing with incorporation of instruments into standards, in new Division 5 of Part 4 of Schedule 4.

Item 134 Clause 41A of Schedule 4

This item repeals clause 41A of Schedule 4. Clause 41A would have prevented Part 4 of Schedule 4 (clauses 37-41) from commencing until Proclamation.

Item 135 Clause 43 of Schedule 4 (definition of datacaster)
Item 136 Clause 43 of Schedule 4 (new definition of datacasting transmitter licence)

Clause 43 of Schedule 4 is the definition provision for Part 5 of Schedule 4 (clauses 42-50), the transmitter access regime. Under that regime, the owner or operator of a broadcasting transmission tower must provide a datacaster with access to the tower and its site for the purpose of installing or maintaining a transmitter for use in transmitting datacasting services.

Under the replacement definition inserted by item 135, a ‘datacaster’ means a person who holds a DTL. Item 13 above inserts a general definition of DTL in subsection 6(1), which includes an authorisation under section 114 of the Radcom Act. For the purposes of the transmitter access regime, item 136 defines DTL to exclude a section 114 authorisation. This means that an authorisee could not exercise access rights relying on its section 114 authorisation. The provision is not intended to prevent the authorisee exercising access rights if allowed by law to do so as an agent of the licensee.

Item 137 New subclause 53(2A) of Schedule 4

The Datacasting Charge (Imposition) Act 1998 (the DCI Act) imposes a charge on broadcasters who hold Radcom Act transmitter licences which authorise datacasting, if the transmitter is used for datacasting purposes (see sections 6 and 8 of the DCI Act). The charge is payable each financial year. The amount of the charge is set by means of a written determination by the ACA (see section 7 of the DCI Act).

Part 6 of Schedule 4 of the BSA (clauses 51-53) contains provisions for the administration of the charge. Before making the first determination under section 7 of the DCI Act, clause 53 of Schedule 4 requires the ACA to give the Minister a written report about proposals to be included in the determination.

New subclause 53(2A) will require the report to be directed towards ensuring that only datacasting services authorised by a datacasting licence (other than ‘designated teletext services’ (as defined in clause 2 of Schedule 4 – see item 75 above) will be considered in calculating the charge. The intention is that a ‘designated teletext service’ will be disregarded for the purposes of calculating the datacasting charge payable by the licensee. In practice, this will have the effect of exempting from the charge existing teletext services provided by free to air broadcasters.

As explained in the notes on clause 2 of the Bill (the commencement provision), this item will commence on Royal Assent.

Item 138 New paragraphs 60(1)(g), (h) and (i) of Schedule 4

This amendment adds new paragraphs (g), (h) and (i) to the list of matters in subclause 60(1) to be reviewed by 31 December 2005.

Paragraph 60(1)(g) provides for a review of various provisions associated with additional CTV licences under sections 38A and 38B (solus and two-station markets).

Before 2007, a DTL will only authorise the transmission of a datacasting service for which a BSA datacasting licence is in force (see new paragraph 109A(1)(h) of the Radcom Act, inserted by item 25 of Schedule 2 below). From 1 January 2007, a DTL will authorise the transmission of a datacasting service for which any BSA licence is in force (see new paragraph 109A(1)(i) of the Radcom Act). This date is immediately after the end of the moratorium on the issue of additional CTV licences in section 28 of the BSA.

The arrangements associated with this freeing up of datacasting spectrum will be reviewed. Accordingly, paragraphs 60(1)(h) and (i) provide for a review, by 31 December 2005, of the regulatory and revenue arrangements which should apply to the use of datacasting transmitters on or after 1 January 2007 to provide other services licensed under the BSA. It is the intention that the review of revenue arrangements should be conducted on the basis that there should be competitive neutrality between datacasting transmitter licence holders, and incumbent free to air broadcasters, in relation to the financial arrangements applying to the use of digital spectrum.

Item 139 New clause 60A of Schedule 4

This item adds new clause 60A of Schedule 4. Clause 60A requires reviews to be conducted by 1 January 2004 of the following matters:

(a) whether Division 2 of Part 4 of Schedule 4 (which concerns HDTV quotas) should be amended or repealed; and

(b) the regulatory arrangements that should apply to HDTV broadcasting in remote areas.

A report of each review is to be prepared and tabled in each House of the Parliament within 15 sitting days of completion of the report.

Item 140 New Schedule 6

Item 140 adds new Schedule 6 to the BSA, dealing with datacasting services.

Schedule 6 – Datacasting services

New Schedule 6 of the Act, dealing with datacasting services, is organised as follows:

Part 1 Introduction (clauses 1-6)

Part 2 Datacasting licences (clause 7-12)

Part 3 Conditions of datacasting licences

Division 1 Genre conditions (clauses 13-20)

Division 2 Audio content condition (clauses 21-23)

Division 3 Other conditions (clauses 24-27)

Part 4 Codes of practice (clauses 28-35)

Part 5 Complaints to the ABA about datacasting services (clauses 36-38)

Part 6 ABC/SBS datacasting (clauses 39-41)

Part 7 Nominated datacaster declarations (clauses 42-48)

Part 8 Remedies for breaches of licensing provisions

Division 1 Providing a datacasting service without a licence (clauses 49-51)

Division 2 Breaches of licence conditions (clauses 52-57)

Part 9 Review of decisions (clauses 58 and 59)

Part 10 Miscellaneous (clauses 60 and 61)

Part 1 – Introduction

General regulatory approach

The regulatory approach adopted for datacasting services is based on a series of rules which restrict datacasters from providing certain kinds or genres of television programs. These rules give effect to the Government’s policy that datacasting services should provide services which are different from traditional broadcasting services. The rules are implemented through a licensing regime for datacasting services (together with penalties for providing datacasting services without a licence).

The basic rule is that datacasting licensees must not provide television programs in a wide range of program genres, which form the bulk of the programs typically provided by free to air television broadcasting. The term ‘television program’ is not defined, but relies on its common meaning (as affected by the definition of ‘program’ in subsection 6(1) of the BSA). In the Bill, the proscribed genres are organised into two categories: category A (entertainment genres, current affairs, drama, documentaries and the like); and category B (news, financial, market and business information, and weather).

To provide greater clarity to datacasters and broadcasters regarding the scope of the services that datacasting licensees may provide, a series of specific exceptions have been made to the general rule that datacasters may not provide television programs. These include:

(a) short (up to ten minute) extracts of television programs;

(b) a small number of specific kinds of television programs, including information-only programs, educational programs, foreign-language news bulletins, and live Parliamentary and court proceedings;

(c) a range of news, financial, market, business, and weather information television programs, in short bulletins, or accessed via interactive on-screen menus;

(d) any information in the form of text and still pictures;

(e) interactive computer games;

(f) access to the Internet and electronic mail.

Essentially the same restrictions apply in relation to the types of radio programs which may be transmitted.

In addition to these specified categories of exclusions, datacasters may provide any matter, provided it does not constitute television or radio programs within the restricted genres.

The ABA has also been provided with a power to make written determinations (in the form of disallowable legislative instruments) that specified television programs, specified radio programs, or specified matter, falls within, or does not fall within, one or more of the prohibited genre categories.

Clause 1 Simplified outline

Clause 1 is a simplified outline of Schedule 6.

Clause 2 Definitions

Clause 2 sets out key definitions for the purposes of new Schedule 6 of the Act. Some definitions are simply signpost definitions for full definitions elsewhere in the BSA or other Acts. The following table is a guide to places in Schedule 6 where the definitions are used:

Clause 3 Educational programs

An ‘educational program’ is matter with the sole or dominant purpose of assisting a course of study or instruction. In assessing the purpose, regard is to be had to:

(a) the substance of the matter;

(b) the way the matter is advertised or promoted;

(c) whether the matter is the subject of an agreement etc with an educational institution;

(d) whether the matter is required or recommended in connection with a course of study or instruction; and

(e) any other relevant matters.

The ABA may determine in writing that specified matter is, or is not, an educational program (subclauses (3) and (4)). A determination will modify the definition (subclauses (2), (5) and (6)). A determination will be a disallowable instrument (subclause (7)).

This mechanism, which is available for a number of the proscribed genres, will allow the ABA in appropriate circumstances to clarify the genres at the margins. This is intended to give greater certainty to the datacasting industry over the scope of the genres and their application.

Clause 4 Information-only programs

Clause 4 defines an ‘information-only program’. Such a program can be transmitted under a datacasting licence; it will not be part of the prohibited genres (see new subclause 13(3) below).

A key feature of an ‘information-only program’ is that there must be little or no emphasis on dramatic impact or entertainment value. This is intended to distinguish such programs from Category A or B programs, particularly such genres as ‘infotainment’, where there is a heavy emphasis on entertainment.

Under subclause (1), an ‘information-only program’ is matter with a sole or dominant purpose of:

(a) providing factual information about a wide range of topics including products, services and community activities; and/or

(b) enabling people to carry out transactions;

where there is little or no emphasis on dramatic impact or entertainment value.

‘Transactions’, ‘community activity’, ‘product’ and ‘services’ are all defined in subclause (8).

The ABA has the same genre determination powers as for the ‘educational program’ definition (subclauses (2)-(7)).

Clause 5 Foreign-language news bulletins

This clause defines a ‘foreign-language news bulletin’ as a news bulletin that is wholly in a language other than English, for the purposes of clause 15(3) below. The effect of this is that the genre restrictions in clause 16 below, which relate to news bulletins and similar programs, will not apply to foreign-language news bulletins.

Subclause 5(2) provides an exception for minor and infrequent uses of the English language, for example where the foreign-language news contains occasional extracts of world leaders speaking in English.

Clause 6 Datacasting content is taken not to be a television program or a radio program etc

Clause 6 is an important scoping provision in the Bill. It separates licensed datacasting services from broadcasting services for the purposes of the BSA and Commonwealth law generally.

Licensed datacasters will be able to provide television or radio programs that do not fall within the genre and audio content conditions in Divisions 1 and 2 of Part 3 of the Bill. In the absence of clause 6, there would be a risk that datacasters could be taken to be providing a broadcasting service without a licence in breach of the offences in Division 1 of Part 10 of the BSA. There would also be a risk that other obligations which apply to the provision of broadcasting services would apply to the provision of the datacasting service.

Clause 6 makes it clear that for the purposes of the BSA and any other law of the Commonwealth:

• matter provided under, and in accordance with the conditions of a datacasting licence, is taken not to be a television program or radio program, or to be broadcast or televised; and

• a datacasting service provided under, and in accordance with the conditions of a datacasting licence, is taken not to be a broadcasting service, television service or radio service.

Matter provided under such a datacasting service is separately regulated by the provisions of new Schedule 6, which impose obligations similar to those which apply to broadcasting services.

This clause does not apply to the genre and audio content conditions in Divisions 1 and 2 of Part 3 of new Schedule 6, as those conditions are critical to establishing whether the service is supplied in accordance with the conditions of the licence for the purposes of this clause.

The provision also does not apply to the Tobacco Advertising Prohibition Act 1992. It is intended that that Act have the widest possible application in relation to any matter transmitted by a datacasting service. Section 8 of that Act, which defines ‘broadcast’ for the purposes of the tobacco advertising restrictions, is amended to specifically include datacasting by item 7 of Schedule 3 of the Bill.

Part 2 – Datacasting licences

Part 2 of Schedule 6 contains provisions for the allocation, transfer and surrender of datacasting licences, and an ABA register of datacasting licences.

Clause 7 Allocation of datacasting licence

Clause 7 provides the mechanism for allocation of datacasting licences by the ABA, upon written application. Subclause 7(2) requires an application to be in the approved form and accompanied by the application fee determined in writing by the ABA.

Clause 8 When datacasting licence must not be allocated

Subclause 8(1) prevents the ABA from allocating a datacasting licence to an applicant who is:

(a) not a ‘qualified entity’; or

(b) considered unsuitable under subclause 9(1), discussed below.

A ‘qualified entity’ is defined in clause 2 above. A ‘qualified entity’ may be an Australian company with a share capital, the Commonwealth or a State or Territory, the ABC, SBS or another Commonwealth, State or Territory statutory authority.

Under subclause 8(2), the ABA has a discretion to refuse to allocate a datacasting licence where a licence held by the applicant, or a related body corporate, was cancelled in the previous 12 months. For this purpose, a ‘related body corporate’ has the same meaning as in the Corporations Law (see clause 2 above).

The effect of subclause 8(3) is that the ABA is under no obligation to investigate whether an applicant is suitable under clause 9(1).

Clause 9 Unsuitable applicant

Clause 9 of Schedule 6 is based on section 41 of the Act, the suitability requirement for commercial broadcasting licences.

The basic rule is subclause 9(1). If the ABA is satisfied that allocation of a datacasting licence would lead to a significant risk of an offence against the Act or regulations, or a breach of the licence conditions, the ABA may decide that the applicant is not suitable. If the ABA decides that the applicant is not suitable, a datacasting licence cannot be allocated (see subclause 8(1) above).

Subclause 9(2) sets out matters for the ABA to consider in assessing the risk:

(a) the person’s business record;

(b) the person’s record in situations requiring trust or candour;

(c) the business record of each person who would be in a position to control the licence;

(d) those person’s records in situations requiring trust or candour;

(e) whether the person, or any person referred to above, has been convicted of an offence against the Act or regulations.

Subclause (3) provides that this clause does not affect the operation of the spent conviction scheme in Part VIIC of the Crimes Act 1914.

Clause 10 Transfer of datacasting licences

Under subclause 10(1), a datacasting licence may be transferred to another ‘qualified entity’. Subclause 10(2) requires the transferee to notify the ABA of the transfer within 7 days. Failure to do so is an offence, with a maximum penalty of 50 penalty units. Subclause 10(3) requires the notification to be in accordance with a form approved in writing by the ABA.

Clause 11 Surrender of datacasting licences

Clause 11 allows a datacasting licensee to surrender the licence by written notice to the ABA.

Clause 12 ABA to maintain Register of datacasting licences

Clause 12 requires the ABA to maintain a Register of particulars of datacasting licences and related information about transmitter licences – for example, the transmitter licence for the transmitter by means of which the datacasting service is transmitted.

The Register must be available for public inspection on the Internet, and may be maintained by electronic means.

Part 3 – Conditions of datacasting licences

Part 3 of Schedule 6 is divided as follows:

Division 1 Genre conditions (clauses 13-20)

Division 2 Audio content condition (clauses 21-23)

Division 3 Other conditions (clauses 24-27)

Division 1 – Genre conditions

Clause 13 Category A television programs

Clause 13 of Schedule 6 determines what is a ‘category A television program’ for the purposes of clause 14, the first genre condition discussed below. Subclause 13(1) lists programs of various genres as ‘category A television programs’:

(a) drama program*;

(b) current affairs program*;

(c) sports program*;

(d) music program*;

(e) infotainment or lifestyle program*;

(f) documentary program;

(g) ‘reality television’ program*;

(h) children’s entertainment program;

(i) light entertainment or variety program;

(j) compilation program*;

(k) quiz or games program;

(l) comedy program;

(m) combination of any of the above genres.

Some of the listed genres, marked *, are defined in clause 2 above.

Under subclause 13(3), ‘information-only program’ (as defined in clause 3 above) and ‘educational program’ (as defined in clause 4 above) are not category A television programs. Datacasters may provide such programs.

The ABA has the same genre determination powers as discussed in relation to clause 3 above (see subclauses (2), (4)-(8)).

Clause 14 Condition relating to category A television programs

Clause 14 of Schedule 6 is the first genre condition on datacasting licences. Subclause 14(1) is the basic condition, that the licensee will not transmit matter that, if it were broadcast on a commercial television broadcasting service, would be either (a) a category A television program, or (b) an extract from such a program.

Subclause (2) is an exception to subclause (1). A licensee may transmit an extract from a category A program of up to 10 minutes, provided the extract is not fully self-contained. However, extracts must not be combined, or intended by the licensee to be combined, with other extracts to form a whole, or the majority of, a particular category A program. This exception is intended to allow extracts to be transmitted, e.g. for the purposes of review or criticism, but not to allow avoidance of the condition by datacasters simply splitting the program into under-10 minute extracts, and then separately transmitting all extracts, which could be reassembled into the original program on a users’ receiver.

Clause 15 Category B television programs

Clause 15 of Schedule 6 defines ‘category B television program’ for the purposes of clause 16, the second genre condition discussed below. The following programs are category B television programs:

(a) a news bulletin*;

(b) a financial, market or business information bulletin*;

(c) a weather bulletin;

(d) a bulletin which is a combination of any of the above (e.g. a typical evening news program).

‘News bulletin’ includes a sports news bulletin (see definition in clause 2).

‘Financial, market or business information bulletin’ is also defined in clause 2. The term is wider than simply business news, it includes analysis, review, commentary or discussion in relation to financial, market or business matters.

Subclause 15(3) excludes ‘information-only programs’ and ‘educational programs’ from the category B definition, in the same way as in subclause 13(3) above, and excludes a foreign-language news bulletin (which is defined in clause 5).

The ABA will similarly have the power to make determinations for the purposes of subclauses 15(1) and (2) (see subclauses (4)-(8)).

Clause 16 Condition relating to category B television programs

Subclause 16(1)

Clause 16 of Schedule 6 is the second genre condition on datacasting licences. Subclause 16(1) is the basic condition, that the licensee will not transmit matter that, if it were broadcast on a commercial television broadcasting service, would be either (a) a category B television program, or (b) an extract from such a program.

Subclause 16(2)

Subclause 16(2) is an exception to subclause 16(1). Under subclause 16(2), a licensee may transmit a ‘presenter-based’ (see subclause 16(4)) news, weather or financial bulletin of up to 10 minutes in length. While that bulletin may be repeated, it may not be transmitted in an updated form, or followed by a different bulletin of any category listed in subclause 15(1), until at least 30 minutes after the start of the first bulletin.

Subclauses 16(3) and (4)

Subclause 16(3) allows unlimited bulletins to be transmitted, provided the bulletin satisfies the conditions set out in paragraphs 16(3)(a), (b) and (c). The term ‘bulletin’ is used as it is intended that each program be brief.

Paragraph 16(3)(a) requires that the bulletin not be ‘presenter-based’. Under subclause 16(4), a ‘presenter-based bulletin’ is a bulletin that includes one or more introductory segments spoken by an on-screen presenter, and video images. This is intended to describe a typical television news bulletin comprising a number of short news items or stories linked and presented by a news reader.

Paragraph 16(3)(b) restricts a news bulletin to a single item of news (a single story). The paragraph also restricts a financial, market or business information bulletin to a bulletin dealing with a single topic, which could for example consist of information about recent trends in share prices, together with some commentary on those trends.

Paragraph 16(3)(c) requires each bulletin to be accessible to the end-user only by way of selection from an on-screen menu. An on-screen menu (see paragraph 16(3)(c)) is not defined, but might include a series of graphical ‘buttons’ or ‘icons’ within a picture (similar to navigation through Internet sites via a browser), that a user ‘presses’ using a remote control or similar pointing device.

Clause 17 Genre conditions do not apply to Parliamentary proceedings

This clause provides that the genre conditions in clauses 14 and 16 do not prevent live transmission of Parliamentary proceedings, court proceedings or other official public hearings. In this context, live is intended to have its ordinary meaning, i.e. without any delay beyond that inherent in transmission.

Such transmission would of course be subject to the requirements of any other law (e.g. the law relating to contempt of court), permission given by the authority concerned (e.g. the relevant judge), and any requirements laid down by that authority.

Clause 18 Genre conditions do not apply to matter that consists of no more than text or still visual images etc

This clause provides that the genre conditions in clauses 14 and 16 do not prevent transmission of text and/or still images, with or without associated sound (see paragraphs 18(1)(a)-(e), referred to as the ‘basic matter’). This exception also allows limited animated images (e.g. video) to be included, provided the animated images are either ancillary or incidental to the basic matter, or are advertising or sponsorship material (see paragraph 18(1)(f)).

The reference to ‘still images’ is intended to cover individual still images, or a series of still images in relatively slow succession, such as a slide show. It is not intended to allow the transmission of matter such as cinematic films, which comprise a series of still images displayed in such quick succession that they appear as moving images to a viewer.

The reference to ‘animated images’ is intended to include matter such as moving computer images or graphics, moving ‘icons’, scrolling banner advertising, and other incidental video material where it is integrated into the ‘page’ or sequence of pages displayed on the screen.

This exception would, for example, cover the content of many popular Internet sites. In addition, a datacasting service can be used to provide access to the Internet itself (see clause 20 below).

Subclause (2) is intended to prevent subclause (1) from affecting, by implication, the meaning of the terms ‘television’ and ‘television program’ in the BSA.

Clause 19 Genre conditions do not apply to interactive computer games

This clause provides that clauses 14 and 16 do not prevent ‘interactive computer games’ from being provided via a datacasting service.

‘Interactive computer game’ is defined in clause 2. Paragraph (a) of that definition is based on the definition of ‘computer game’ in the Classification (Publications, Films and Computer Games) Act 1995. Paragraph (b) of the definition reflects the fact that the datacaster will, to some extent, control the software needed to play the game.

This clause is intended to cover networked computer games similar to those common on the Internet today, in which one or more players in different locations connect to each other via a central computer server controlled by the datacasting licensee.

Subclause (2) is intended to prevent subclause (1) from affecting, by implication, the meaning of the terms ‘television’ and ‘television program’ in the BSA.

Clause 20 Genre conditions do not apply to Internet carriage services or ordinary electronic mail

Paragraph 20(1)(a) provides that the genre conditions in clauses 14 and 16 do not apply to the transmission of so much of a datacasting service as consists of an ‘Internet carriage service’. This exemption is intended to allow a datacasting service to transmit Internet content to users as part of a service providing individual point-to-point Internet connectivity to the user. As some sites on the Internet provide television programs and radio programs which can be downloaded or viewed in real time, an exemption from the genre rules is required for so much of the datacasting service as consists of an Internet carriage service. This will ensure that, if individual users access streamed audio or video such as newsclips on Internet sites, or download audio or video files from websites through an Internet carriage service operated by the datacaster, the content they obtain from the websites is not subject to the genre rules.

An ‘Internet carriage service’ is defined in subclause 2(1) to have the same meaning as in Schedule 5 to the Act, but to not include a service that transmits content that has been copied from the Internet, where the content is selected by the datacasting licensee concerned. In the case of such a datacasting service, commonly referred to as a ‘walled garden’, the genre rules will apply to the content supplied by the datacasting licensee on the service.

This provides a distinction between content controlled and provided by the licensee on the one hand (which is subject to the genre constraints) and, on the other hand, content obtained from the Internet by individual private users by virtue of a communications service provided by the licensee (which is not subject to the genre constraints).

Paragraph 20(1)(b) provides that the genre conditions in clauses 14 and 16 do not apply to ‘ordinary electronic mail’. Clause 2 applies the same definition of this term as is used in clause 3 of Schedule 5 of the BSA. That definition excludes newsgroups. It is intended that private e-mail communications between individuals not be limited by the genre conditions.

Subclause (2) is intended to prevent subclause (1) from affecting, by implication, the meaning of the terms ‘television’ and ‘television program’ in the BSA.

Division 2 – Audio content condition

Division 2 of Part 3 of Schedule 6 contains a datacasting licence condition relating to audio content; new clause 21.

Clause 21 Audio content condition

Subclause 21(1) prohibits a datacasting licensee from using the datacasting service which is authorised by the licence to transmit matter that, if it were broadcast on a commercial radio broadcasting service, would be a designated radio program. The purpose of the subclause is to prevent datacasters from being radio broadcasters as commonly understood, but not to prevent them from providing any audio material. Rather than specifying genres of radio programs that may or may not be provided, the ABA will have a broad general power (in subclauses 21(3) to (8)) to determine the kinds of audio content allowed.

Subclause 21(2) has the same effect of excluding ‘information-only programs’, ‘educational programs’ (see clause 3) and ‘foreign-language news bulletins’ (see clause 5) from the audio content condition as subclause 15(3) has for the genre condition in clause 16.

Subclauses 21(3) to (8) enable the ABA to make written determinations providing that specified radio programs or specified matter is taken to be, or is taken not to be, a designated radio program.

A determination will modify the definition of a designated radio program (subclauses (3), (6) and (7)). A determination will be a disallowable instrument (subclause (8)).

The exception in subclause 21(9) is the equivalent for the audio content condition of paragraph 20(1)(a) for the genre conditions. Subclause 21(9) provides that subclause 21(1) does not apply to the transmission of so much of a datacasting service as consists of an ‘Internet carriage service’.

Clause 22 Audio content condition does not apply to Parliamentary proceedings etc.

Clause 22 makes a corresponding exemption to the audio content condition as clause 17 above makes to the genre conditions.

Subclause (2) is intended to prevent subclause (1) from affecting, by implication, the meaning of ‘radio’ and ‘radio program’ in the BSA.

Clause 23 Audio content condition does not apply to matter that consists of no more than text or still visual images etc

Clause 23 makes a corresponding exemption to the audio content condition as clause 18 above makes to the genre conditions.

Division 3 – Other conditions

Division 3 of Part 3 of Schedule 6 contains additional conditions for datacasting licences.

Clause 24 General conditions

Subclause 24(1) of Schedule 6 sets out general conditions which will apply to all datacasting licences. The conditions are that the licensee will:

(a) comply with clauses 3, 3A, 4, 5 and 6 of Schedule 2 of the Act, as modified by subclause 24(4), discussed below;

these clauses of Schedule 2 are the standard conditions dealing with political advertisements and advertisements for medical drugs which apply to all broadcasting licences;

(b) not transmit a tobacco advertisement in contravention of the Tobacco Advertising Prohibition Act 1992;

(c) comply with standards under clause 31, discussed below;

(d) not use the service in committing a criminal offence;

(e) not transmit material that has been classified RC, X or NVE by the Classification Board;

(f) not transmit material that has been classified R by the Classification Board, unless:

(i) it has been modified under provisions of the code of practice under paragraph 28(4)(b), discussed below; or

(ii) access is subject to a restricted access system, as defined in clause 27 below;

(g) comply with any applicable technical standards made under clause 60 below;

(h) comply with any applicable ‘online provider rule’ in relation to any part of the datacasting service which consists of an ‘Internet carriage service’ (as defined in clause 2);

‘online provider rules’ are specified in clause 79 of Schedule 5 of the BSA; they include ABA notices and determinations, and industry codes and standards, under clauses 37, 48, 66, 72 and 80 of Schedule 5.

Subclause 24(2) provides that the conditions in paragraphs 24(1)(a), (c), (e) and (f) do not apply to any part of a datacasting service which consists of an ‘Internet carriage service’ or ‘ordinary electronic mail’ (as defined in clause 2 above).

Subclause 24(3) provides that the condition in paragraph 24(1)(b) does not apply to the transmission of ordinary electronic mail.

Subclause 24(4) ensures that the broadcasting licence conditions in Schedule 2 (referred to in paragraph 24(1)(a) above) apply to datacasting licences in a corresponding way, with appropriate modifications to take account of the fact that datacasting content will not necessarily be provided as a linear stream of programs in the way that a broadcasting service is provided.

As a consequence of the fact that these broadcasting licence conditions in Schedule 2 do not apply to any ‘Internet carriage service’ component of the datacasting service (see subclause 24(2)), the modifications in subclause 24(4) also do not apply (see subclause (24(5)).

Clause 25 Suitability condition

Subclause 25(1) imposes a condition on all datacasting licences that the licensee will remain suitable. This corresponds to the commercial broadcasting licence condition in paragraph 7(2)(b) of Schedule 2 of the Act.

The suitability test in subclauses 25(2), (3) and (4) is the same as the existing suitability test for commercial licensees (section 41), which is also used for datacasting licence allocation purposes (see clause 9 above).

Subclause (4) allows prior convictions for BSA offences to be considered in deciding suitability. Subclause (5) ensures that the operation of the spent conviction scheme in the Crimes Act 1914 is not affected by this clause.

Clause 26 Additional conditions imposed by the ABA

Clause 26 gives the ABA the same powers in relation to additional conditions on datacasting licences that it currently has for commercial broadcasting licences (under sections 43 and 44 of the Act).

Under subclause 26(1), the ABA may impose an additional condition on a datacasting licence, or vary or revoke an additional condition imposed previously. The ABA must consult the licensee about the proposed changes and make the proposed changes publicly available on the Internet (subclause (2)).

The effect of subclause (3) is that any conditions imposed must be consistent with the standard conditions in clauses 14, 16, 21, 24 and 25. Subclause (4) requires that any action by the ABA under subclause (1) to change conditions must be relevant to the services authorised by the licence in question.

Subclause (5) gives examples of conditions which could be imposed under subclause (1):

(a) a condition requiring the licensee to comply with an applicable code of practice (as to codes of practice, see new Part 4 of Schedule 6 below);

(b) a condition designed to ensure that further breaches of licence conditions do not occur.

Subclauses (6) to (8) require the ABA to maintain a register of licence conditions.

Clause 27 Restricted access system

Clause 27 is based on clause 4 of Schedule 5 of the Act, which relates to Internet content. It allows the ABA to specify a particular access-control system to be a ‘restricted access system’ for the purposes of the datacasting licence condition in paragraph 24(1)(f) of Schedule 6 above. That condition deals with modification of, or restricted access to, material which has been classified R. A ‘restricted access system’ could include a technical system such as a conditional access system, or a system based on a PIN number, which ensures that R-rated material is only accessible to authorised adults.

Part 4 – Codes of practice

Part 4 of Schedule 6, dealing with codes of practice for datacasting licensees, is based on Part 9 of the Act, which deals with standards and codes of practice for commercial broadcasting licensees.

Clause 28 Development of codes of practice

Clause 28 is based on section 123 of the Act.

Subclause (1) is a general statement of the Parliament’s intent. A group that the ABA is satisfied represents datacasting licensees should develop a code of practice for the datacasting industry, in consultation with ABA and taking account of any relevant ABA research.

Subclause (2) sets out issues which may be covered by the code, based on subsection 123(2) of the Act.

Subclauses (3), (4), (5) and (6) respectively correspond to subsections 123(3), (3A), (3B) and (4) of the Act.

Subclause (7) provides a definition of the term ‘interactive computer game’ for the purposes of the clause.

Clause 29 Review by the ABA

Clause 29 corresponds to section 123A of the Act and requires the ABA to periodically conduct a review of the operation of subclause 28(4) (dealing with classification arrangements) to see whether the subclause is in accordance with prevailing community standards.

Clause 30 ABA to maintain Register of codes of practice

Clause 30 corresponds to section 124 of the Act and requires the ABA to maintain a Register of codes of practice.

Clause 31 ABA may determine standards where codes of practice fail or where no code of practice developed

Clause 31 corresponds to section 125 of the Act and enables the ABA to determine standards where codes of practice fail or where no code of practice is developed.

Clause 31(3) makes a standard a disallowable instrument.

Clause 32 Consultation on standards

Clause 32 corresponds to section 126 of the Act and requires the ABA to seek public comment before determining, varying or revoking a standard.

Clause 33 Notification of determination or variation or revocation of standards

Clause 33 corresponds to section 127 of the Act and imposes publication requirements for a standard or a variation or revocation of a standard.

Clause 34 Limitation of ABA’s power in relation to standards

Clause 34 corresponds to section 129 of the Act. Clause 34 makes it clear that the ABA may not make a standard which requires prior approval (or in effect, censorship) of datacasting content before it is transmitted. However, this limitation does not apply to datacasting content for children.

Clause 35 This Part does not apply to Internet carriage services or ordinary electronic mail

The effect of clause 35 is that a code of practice or standard under Part 4 of Schedule 6 will not apply to any component of the datacasting service which is an Internet carriage service or to ordinary electronic mail.

However, an Internet carriage service component of a datacasting service will be subject to Schedule 5 of the BSA. In particular, codes of practice or standards under clauses 66 or 72 of Schedule 5 will be binding on an Internet carriage service component of a datacasting service (see the notes on paragraph 24(1)(h) above).

Part 5 – Complaints to the ABA about datacasting services

Part 5 of Schedule 6, dealing with complaints, is based on the equivalent provisions for broadcasting licences in Division 1 of Part 11 of the Act.

Clause 36 Complaints about offences or breach of licence conditions

Clause 36 corresponds to section 147 of the Act. Clause 36 enables a person to complain to the ABA about:

• a datacasting licensee committing an offence against the Act or Regulations or breaching a condition of licence; or

• a person providing a datacasting service without a licence.

Clause 37 Complaints under codes of practice

Clause 37 corresponds to section 148 of the Act and enables a person to complain to the ABA if not satisfied with the handling of a complaint to a datacaster or industry body about datacasting content or compliance with a code of practice.

Clause 37 does not apply to any component of the datacasting service which is an ‘Internet carriage service’, or to ordinary electronic mail.

Clause 38 Investigation of complaints by the ABA

Clause 38 corresponds to section 149 of the Act. Clauses 38(1) and (2) require the ABA to investigate all complaints made to it under clauses 36 and 37, unless the ABA considers that the complaint:

(a) is frivolous or vexatious or not made in good faith; or

(b) does not relate to an offence against the Act or regulations or breach of a licence condition.

Clause 38(3) requires the ABA to notify the complainant of the results of the investigation.

Part 6 – ABC/SBS datacasting

Clause 39 Provision of datacasting services by the ABC etc.
Clause 40 Provision of datacasting services by the SBS etc.

These clauses are intended to enable the ABC and SBS to provide datacasting services, while giving them flexibility to do so either directly themselves or through a subsidiary company or other business arrangements.

Clauses 39(1) and 40(1) make it clear that the ABC and the SBS will have the functions of providing a datacasting service under, and in accordance with the conditions of, a datacasting licence if they apply for such a licence and it is allocated.

Section 25A of the Australian Broadcasting Corporation Act 1983 and section 52 of the Special Broadcasting Service Act 1991 enable the ABC and the SBS to engage in businesses or other activities related to or incidental to the performance of their functions (authorised businesses) through various means, such as subsidiaries, joint ventures, partnerships.

Clauses 39(2) and 40(2) make it clear that the activity of providing a datacasting service under, and in accordance with the conditions of, a datacasting licence is taken to be an authorised business for the purposes of these provisions.

As a national broadcaster would require a datacasting licence in order to provide datacasting services, the broadcaster would be subject to the same conditions as other datacasters, including commercial broadcasters who provide datacasting services.

Clause 41 Control of datacasting transmitter licences

Commercial broadcasters will not be allowed to control DTLs (see the amendments to the control provisions made by items 7, 13, 14, 16, 25-39, 42, 43 and 58-66 above). This clause will apply a similar prohibition to the national broadcasters.

Part 7 – Nominated datacaster declarations

This Part is included to give the flexibility for 2 different business models to operate in relation to datacasting transmission. Which model is used will depend upon the business plans of the person who acquires the particular datacasting transmitter licence concerned.

Under the first model, a content provider might also acquire a datacasting transmitter licence and a single entity would be responsible for both Radcom Act regulatory obligations in relation to transmission of the service and BSA regulatory obligations for the content of the service. (This model reflects the model which applies to commercial broadcasting services, where the ACA automatically issues a transmitter licence under the Radcom Act where a broadcasting services bands licence is allocated.)

Under the second model, a datacasting transmitter licence might be acquired by a transmission provider which provides transmission services on behalf of content providers and is not itself involved in the selection or provision of the datacasting content for transmission. In this case, it is only the content providers who need be subject to content regulation under the BSA and the transmission provider who should be subject to Radcom Act regulatory obligations in relation to the transmission.

This Part provides a mechanism to clarify the regulatory responsibilities between a datacasting licensee and a datacasting transmitter licensee where the second business model operates.

Clause 42 Object of this Part

The object of Part 7 is to provide for the making of ‘nominated datacaster declarations’, that allow the BSA datacasting licence that authorises the provision of a datacasting service, and a DTL for a transmitter that is to be used to transmit the datacasting service, to be held by different persons.

Clause 43 Datacasting transmitter licence

The declaration mechanism is intended only for a DTL itself, not for an authorisation under section 114 of the Radcom Act in respect of a DTL. It is intended that the licensee, rather than any authorisee, should have responsibility for deciding whether there should be a nominated datacaster declaration.

Accordingly, clause 43 excludes such authorisations from the scope of the scheme.

Clause 44 Applications for nominated datacaster declarations

A DTL licensee may apply in writing using the approved form to the ABA for a nominated datacaster declaration in relation to the provision of the datacasting service under the DTL. The application must be accompanied by the consent of the BSA datacasting licensee in writing using the approved form.

Clause 45 Making a nominated datacaster declaration

The ABA will make the declaration only if it is satisfied that the DTL licensee will transmit the datacasting service on behalf of the BSA datacasting licensee, and will not be involved in selecting or providing the datacasting content to be transmitted on the datacasting service. The reference to ‘providing content’ is not intended to exclude involvement in the arrangements for technical delivery of the content, for example, transmission of a signal from studio to transmitter, but instead it is intended to exclude involvement in the preparation or creation of the content.

The ABA must notify both parties of its decision.

Clause 46 Effect of nominated datacaster declaration

If the DTL licensee transmits the service on behalf of the BSA licensee, the effect of the nominated datacaster declaration is that:

• the BSA licensee is taken not to operate the radiocommunications transmitter, for Radcom Act purposes;

• the DTL licensee is taken not to provide the datacasting service, for BSA purposes;

• only the BSA licensee is taken to transmit any content included in the service for, any BSA purposes (except for the control rules in Schedule 1 and any technical standards under clause 60 of Schedule 6) and for the purposes of the Tobacco Advertising Prohibition Act 1992.

Clause 47 Revocation of nominated datacaster declaration

The ABA must revoke a declaration if the essential arrangements change, i.e. if:

• the DTL licensee does not transmit the service; or

• the DTL licensee becomes involved in selecting or providing content for the service; or

• either licensee notifies the ABA that it has withdrawn its consent.

The ABA must give both parties an opportunity to make submissions about any proposed revocation. The decision must be notified to both parties.

Subclauses 47(7) and (8) prohibit a contract or arrangement between the DT licensee and the BSA datacasting licensee preventing either party giving notice that it does not consent to the continued operation of a nominated datacaster declaration. This provision is intended to reduce the scope for the ABA to be restricted from taking regulatory action by any contractual disputes between the parties about rights to continue to supply datacasting services by means of the datacasting transmitter licence.

Clause 48 Register of nominated datacaster declarations

The ABA is to maintain a register of current nominated datacaster declarations, which will be available for public inspection on the Internet.

Part 8 – Remedies for breaches of licensing provisions

Part 8 of Schedule 6 provides remedies for breaches of the datacasting licence provisions. Part 8 is divided as follows:

Division 1 Providing a datacasting service without a licence (clauses 49-51)

Division 2 Breaches of licence conditions (clauses 52-57)

Division 1 – Providing a datacasting service without a licence

Clause 49 Prohibition on providing a datacasting service without a licence

Clause 49 is the basic offence for intentionally providing a datacasting service without a licence, with a maximum penalty of 20,000 penalty units. A separate offence is committed for each day of contravention.

Clause 49 is based on the corresponding offence in section 131 of the Act, and the continuing offence provision in section 136 of the Act.

Clause 50 Notice for providing a datacasting service without a licence

If a person is providing a datacasting service without a licence, subclause 50(1) allows the ABA to give a notice directing the person to cease providing the service.

Subclause (2) makes it an offence to intentionally engage in conduct which contravenes a requirement in the notice, with a maximum penalty of 20,000 penalty units. ‘Engage in conduct’ is defined in clause 2 to mean both doing an act, and omitting to perform an act.

Subclause (3) provides that a separate offence is committed for each day a contravention continues.

Clause 51 Exemption for broadcasting licensees etc.

Under subclause 51(1), the offence and notice provisions relating to unlicensed datacasting do not apply to the provision of a broadcasting service under, and in accordance with the conditions of, the relevant broadcasting licence. Subclause 51(2) is the corresponding exemption for national broadcasters, who do not hold a broadcasting licence for their national broadcasting services.

This exemption is necessary because the concepts of broadcasting service and datacasting service overlap to some extent (see the notes on item 12).

Division 2 – Breaches of licence conditions

Clause 52 Offence for breach of licence conditions

Subclause 52(1) is the basic offence for intentionally engaging in conduct breaching a condition of a datacasting licence set out in clause 14, 16, 21 or 24. ‘Engage in conduct’ is defined in clause 2 to mean both doing an act, and omitting to perform an act. The offence corresponds to the similar offence for commercial television broadcasting licensees in subsection 139(1) of the Act.

The offence has a maximum penalty of 2,000 penalty units.

Under subclause (2), a separate offence is committed for each day a contravention continues. This corresponds to section 140 of the Act.

Clause 53 Remedial directions – breach of conditions

Subclause 53(1) enables the ABA to direct a datacasting licensee who has breached, or is breaching, a condition of the licence, to take specified action to ensure the condition is not breached in the future.

A direction could be, for example, that the licensee (see subclause (2)):

(a) implement administrative systems to monitor compliance with a licence condition;

(b) implement a system to give its employees, agents and contractors knowledge of relevant licence conditions.

The effect of subclause (3) is to give the licensee a reasonable period, as specified in the notice, to take the required action. The licensee will not be in breach of the notice in this period. For example, if a direction was to require the licensee to implement a new administrative system and operate in accordance with that system, the notice would specify a reasonable period during which the licensee could develop the new system, so that the obligation to operate in accordance with that system would take effect from the end of the specified period.

Under subclause (4), it is an offence for a person given a notice to intentionally engage in conduct contravening a requirement in the notice with a maximum penalty of 20,000 penalty units. ‘Engage in conduct’ is defined in clause 2 to mean both doing an act, and omitting to perform an act.

Under subclause (5), a separate offence is committed for each day a contravention continues.

Clause 54 Suspension and cancellation

If a datacasting licensee does not comply with a notice under clause 53, or breaches a licence condition, subclause 54(1) allows the ABA to either suspend the licence for up to 3 months, or cancel the licence.

If the ABA suspends or cancels a licence under subclause 54(1) for breach of a condition in clause 14, 16 or 21 (the genre and audio content conditions), subclauses 54(2) and (3) allow the ABA to suspend or cancel any other datacasting licence held either by the licensee or a related body corporate. These powers are available where the ABA considers the suspension or cancellation necessary to ensure that the same, or a substantially similar, service is not transmitted in avoidance of the original suspension or cancellation action.

Clause 55 Injunctions

Clause 55 gives the Federal Court power to grant injunctions, on the application of the ABA, to enforce the important restrictions on datacasting:

• the prohibition on providing a datacasting service without a datacasting licence (clause 49); and

• the datacasting licence conditions (especially the genre and audio content conditions in clauses 14, 16 and 21 – but not the suitability condition in clause 25, which is more appropriately enforced by licence suspension or cancellation under clause 54).

Subclauses 55(1) and (2) are directed to restraining the licensee from engaging in conduct which contravenes clause 49 or a licence condition. Subclause (3) is directed to requiring the licensee to take action, where refusal or failure to so act would contravene a licence condition.

Clause 56 Federal Court’s powers relating to injunctions

Subclause 56(1) gives the Federal Court power to grant interim injunctions where the ABA has sought an injunction under clause 55. Under subclause 56(2), the ABA is not required to give any undertakings as to damages as a condition of granting an interim injunction.

Subclause 56(3) allows the Federal Court to vary or discharge an injunction granted under clause 55.

Subclause 56(4) ensures that an injunction restraining conduct may be granted under clause 55 even if:

(a) the person does not intend to continue such conduct, provided the court is satisfied that the licensee has previously engaged in such conduct; or

(b) the person has not previously engaged in such conduct, provided that it appears to the court that the person would be likely to engage in such conduct and there is imminent danger of substantial damage to a person if the conduct occurs.

Subclause 56(5) makes corresponding provision for performance injunctions to the rule in clause 56(4).

Subclause 56(6) provides that the powers of the Federal Court under clause 55 are in addition to any other powers of the court.

Clause 57 Stay of proceedings relating to additional licence conditions, remedial directions and suspension/cancellation decisions

Clause 57 is intended to prevent enforcement action taken by the ABA in relation to datacasting licences from being temporarily suspended, or stayed, by a court or tribunal. The provision is intended to prevent a person from continuing to provide an unlicensed service, or a service which breaches certain licence conditions, throughout the period during which the case is being considered by the courts or the AAT.

Subclause 57(1) provides that clause 57 applies to decisions imposing or varying a condition under clause 26, remedial directions under clause 53, and suspension or cancellation decisions under clause 54.

Subclause (2) prevents both the Federal Court and the Federal Magistrates Court from suspending such decisions under the Administrative Decisions (Judicial Review) Act 1977.

Subclause (3) prevents the Federal Court from suspending such decisions where a challenge is made under subsection 39B(1) of the Judiciary Act 1903.

Subclause (4) prevents the AAT from suspending such decisions where an application for review is made to the AAT.

The inclusion of provisions preventing such decisions being suspended is unusual, and is only provided for in the case of decisions relating to the enforcement of datacasting licence conditions due to the key role of those conditions in maintaining the distinction between the provision of licensed datacasting services and broadcasting services. In the absence of such a provision, there may be considerable financial incentives for a datacasting licensee to test the boundaries of what is permitted under its licence, while using whatever scope is available for legal challenge to delay the effect of any enforcement action taken against it.

The provision is based on a recently enacted provision, section 151AQA of the Trade Practices Act 1974, which was enacted to deal with concerns about the use of litigation to delay enforcement action in relation to anti-competitive conduct in the telecommunications industry.

Part 9 – Review of decisions

Clause 58 Review by the Administrative Appeals Tribunal

Clause 58 sets out a Table listing those administrative decisions of the ABA under Schedule 6 which will be subject to merits review by the AAT. The Table is reproduced below.

Clause 59 Notification of decisions to include notification of reasons and appeal rights

For decisions which are reviewable under clause 58, clause 59 requires the ABA’s notification of the decision to include a statement of reasons and notice of the appeal rights.

Part 10 – Miscellaneous

Clause 60 Datacasting technical standards

Clause 60 is essentially a re-enactment, in Schedule 6, of clauses 40 and 41 of Schedule 4. (Clause 40 of Schedule 4 is repealed by item 132 above. Clause 41, relating to incorporation of other instruments in standards, remains in Schedule 4.) The differences between new clause 60 and clause 40 of Schedule 4, which it replaces, reflect:

• the changes to the datacasting licensing regime in the Radcom Act made by Schedule 2 of the Bill; and

• the amendments to clause 39 of Schedule 4 made by items 130 and 131 above.

Clause 60 will enable regulations to specify technical standards for datacasting transmission, if necessary. To the extent that any standards made under clause 60 address ‘conditional access systems’, such standards should be directed towards the objective that as far as is practicable, such systems should be open to all providers of ‘eligible datacasting services’.

Under subclause 60(5), a ‘conditional access system’ is a conditional access system which relates to the provision of ‘eligible datacasting services’, and allows the provider of such a service to determine whether an end-user is able to receive a particular service.

Subclause 60(5) defines ‘eligible datacasting service’ as:

(a) a datacasting service provided under, and in accordance with the conditions of, a datacasting licence; or

(b) a television broadcasting service transmitted in digital mode using the BSBs.

The effect of new clause 60 and clause 39 of Schedule 4, as amended by items 130 and 131 above, is that any technical standards made under either new clause 60 of Schedule 6 (for datacasting) or clause 39 of Schedule 4 as amended (for digital broadcasting), dealing with conditional access systems, must be directed at ensuring, as far as practicable, that those systems are open to all national and commercial providers of digital television broadcasting services and all providers of datacasting services.

Clause 61 Review before 1 January 2004

Clause 61 requires a review to be conducted of Schedule 6 before 1 January 2004. A report of the review must be tabled in each House of the Parliament, within 15 sitting days of the report being completed.

PART 2 – TRANSITIONAL PROVISIONS

Item 141 Transitional – section 34 of the Broadcasting Services Act 1992

Under subsections 34(1) and (3) of the BSA, the ABA may, by written instrument, declare that a specified part or parts of the BSB spectrum is or are available for allocation:

• (in certain circumstances) for temporary transmission of datacasting services (paragraph 34(1)(fa)); or

• for transmission of datacasting services (subsection 34(3)).

The scope of section 34 is amended by items 20 and 21 above. Accordingly, this transitional provision is included to ensure any instruments made by the ABA under section 34 before this item commences continue to have effect after this item commences.

Item 142 Transitional – variation of digital conversion schemes

Clauses 16 and 30 of Schedule 4 to the Act allow the commercial conversion scheme and the national conversion scheme to be varied.

The amendments made by this Bill will require the schemes to be varied. In order to allow sufficient time for preparation for the commencement of digital television, the schemes will need to be amended before most of the Bill commences on Proclamation (see subsections 2(2) and (3) of the Bill). This item allows that to occur. Accordingly, this item will commence on Royal Assent, not on Proclamation (see paragraph 2(1)(b) of the Bill).

Item 143 Transitional – allocation of datacasting licences

Item 143 is a transitional provision, allowing the ABA to allocate a datacasting licence under proposed Schedule 6 of the BSA after Royal Assent, but before Schedule 6 of the Act comes into operation (on a date to be proclaimed). Any datacasting licence allocated during this period would only take effect when Schedule 6 of the Act came into operation. Accordingly, item 143 will commence on Royal Assent.

Item 143 is not intended to imply that the power in section 4 of the Acts Interpretation Act 1901 would not allow the ABA to allocate a datacasting licence during this period. Item 143 is included to avoid any doubt about the availability of such a power.

The allocation of datacasting licences in advance of commencement will ensure that any datacasting test transmissions under paragraph 34(1)(fa) of the BSA which are in progress at commencement may continue as licensed transmissions after commencement. Otherwise, there would be a hiatus before the issue of licences.

Item 144 Transitional – validation of digital channel plans

Items 95 and 116 above insert new sections 7A and 22A in Schedule 4 to the BSA to clarify that the commercial and national television schemes can provide for the ABA to make digital channel plans. Digital channel plans allot channels to commercial television licensees and national broadcasters, set out technical limitations on the use of those channels and set out whether use of a channel depends upon particular circumstances.

The relevant schemes already provide for the making of digital channel plans and some plans have been made. New sections 7A and 22A are included to remove any doubt that the ABA has power to make digital channel plans under the schemes.

As a consequence, item 144 is included to ensure that the Commercial Television Conversion Scheme 1999, the National Television Conversion Scheme 1999, all digital channel plans made under either scheme and anything done under such plans, are valid.

Item 145 Transitional – regulations

Item 41 allows regulations to be made dealing with transitional issues arising from the amendments to the BSA made by Part 1 of Schedule 1. Where any transitional requirements have been identified, provision has been included in Part 2 of Schedule 1 to deal with those matters. A regulation making power is included to deal with any unforeseen transitional issues which arise in implementing the new measures in Schedule 1 to the Bill.

SCHEDULE 2 – AMENDMENT OF THE
RADIOCOMMUNICATIONS ACT 1992

PART 1 – AMENDMENTS

Item 1 Section 5 (new definition of BSA datacasting licence)

This item inserts a new definition of ‘BSA datacasting licence’ in section 5 of the Radcom Act. A ‘BSA datacasting licence’ means a datacasting licence under Schedule 6 to the BSA.

This term is used in new subsections 100A(1B), 100B(2B), 102(5) and 102A(5) and paragraphs 109A(1)(h) and (i), inserted by items 10, 12, 15, 17 and 25 below.

Item 2 Section 5 (new definition of commercial television broadcasting licence)

This item inserts a new definition of ‘commercial television broadcasting licence’ in section 5 of the Radcom Act, giving the term the same meaning as in the BSA.

Item 3 Section 5 (definition of datacasting service)

‘Datacasting service’ is currently defined in section 5 of the Radcom Act to have the same meaning as in Schedule 4 of the BSA. The BSA definition is moved from Schedule 4 of the BSA to the general interpretation provision in subsection 6(1) (see items 12 and 74 of Schedule 1 of the Bill).

The amendment made by this item is consequential on the above amendments.

Item 4 Section 5 (new definition of datacasting transmitter licence)

This item inserts a new definition of ‘datacasting transmitter licence’, referred to in this memorandum as a DTL, in section 5 of the Radcom Act. A DTL is an apparatus licence for a transmitter that is for use for transmitting a datacasting service. However, existing broadcasters will not require a DTL to provide datacasting on any spare capacity covered by their existing Radcom transmitter licence:

• Through the operation of subsection 102(3), existing commercial television broadcasting licensees currently hold transmitter licences which allow them to operate transmitters for their broadcasting services. These licences will also authorise transmission of their datacasting services, provided their datacasting services are provided in accordance with a BSA datacasting licence. Through the operation of subsection 102A(3), any transmitter licences issued to commercial television broadcasters in the future under the commercial digital conversion scheme (see clause 6 of Schedule 4 of the BSA) will similarly authorise datacasting transmission;

• National broadcasters currently hold NBS transmitter licences under section 100 which allow them to operate transmitters for their national broadcasting services. Through the operation of subsection 100A(1), these licences will also allow the transmission of their datacasting services, provided their datacasting services are provided in accordance with a BSA datacasting licence. Through the operation of subsection 100B(2), any NBS transmitter licences issued to national broadcasters in the future under the national digital conversion scheme (see clause 19 of Schedule 4 of the BSA) will similarly authorise datacasting transmission.

Accordingly, the new definition of a DTL does not include commercial broadcasting transmitter licences (issued under sections 102 and 102A) or NBS transmitter licences (see sections 100A and 100B). It also does not include a prescribed transmitter licence. Given the wide definition of ‘datacasting service’, the mechanism to prescribe transmitter licences in regulations is included to enable transmitter licences for any other services transmitted in the BSBs to be excluded where it would be inappropriate to regulate them under datacasting transmitter licences.

A DTL will generally be issued under the general power to issue apparatus licences in section 100, subject to the requirements of new section 102B, inserted by item 18 below, or any price-based allocation system under section 106 of the Radcom Act.

Item 5 Section 5 (paragraph (b) of the definition of licensee)

For an apparatus licence, the person to whom the licence was issued is the licensee (see paragraph (b) of the definition of ‘licensee’ in section 5). However, an apparatus licence can be transferred. Accordingly, this item makes a minor technical amendment to paragraph (b) so that the licensee is the person who holds the licence.

Item 6 Section 5 (new definition of qualified company)

This item inserts a definition of ‘qualified company’ for the purposes of the Radcom Act, which is defined as a company formed in Australia which has a share capital.

A DTL can only be issued to a ‘qualified company’ (see new subsection 102B(1), inserted by item 18 below).

Item 7 Section 5 (new definition of SDTV digital mode)

This item inserts a new definition of ‘SDTV digital mode’ in section 5 of the Radcom Act reflecting the new definition in the BSA, inserted as new clause 4B of Schedule 4 (see items 77 and 79 of Schedule 1 of the Bill above).

Item 8 Subsection 96(7)

The amendment to subsection 96(7), which is part of the outline of Part 3.3 of the Act, is consequential on new Division 6A (new sections 128C-128E), inserted by item 36 below.

Item 9 Subsection 100(1)

This item amends subsection 100(1) of the Radcom Act to make the general power to issue an apparatus licence in section 100 subject to the specific provisions in section 102B for DTLs.

Item 10 Subsections 100A(1A), (1B) and (1C)

The repeal of subsections 100A(1A), (1B) and (1C) (item 10), 100B(2A), (2B) and (2C) (item 12), 102(3A), (3B) and (3C) (item 15), and 102A(4), (5) and (6) (item 17) will allow subsections 100A(1), 100B(2), 102(3) and 102A(3) to operate, by removing subsections preventing commencement until a Proclamation following certain reviews. Those reviews have now been carried out. As outlined above, subsections 100A(1), 100B(2), 102(3) and 102A(3) will allow the transmission of datacasting services by commercial television and national broadcasters under the licences held for transmission of their broadcasting services.

The repealed subsections are replaced. New subsection 100A(1A) provides that subsection 100A(1) will have effect subject to the restrictions in new subsections 100A(1B) and 100A(1C).

New subsection 100A(1B) prevents the transmitter from being operated under subsection 100A(1) to transmit the national broadcasters’ datacasting service in digital mode unless the licensee holds a BSA datacasting licence for that service.

New subsection 100A(1C) prevents datacasting from commencing in a coverage area until:

(a) 12 months after the commencement of the simulcast period for that coverage area (determined in the national scheme made under clause 19 of Schedule 4); or

(b) the commencement of datacasting by another datacaster under a DTL in that coverage area;

whichever occurs first.

However, test transmissions in accordance with an ABA determination under paragraph 34(1)(fa) of the BSA are allowed.

A short delay in the start up of datacasting services by commercial and national broadcasters is consistent with the objective of achieving competitive neutrality between broadcasters who provide datacasting services and other datacasters.

Item 11 Subsection 100A(2) (new definition of coverage area)

This item adds a definition of ‘coverage area’, which is defined in clause 2 of Schedule 4 of the BSA. A ‘coverage area’ is the area for national broadcasters corresponding to a commercial broadcasters’ ‘licence area’.

Item 12 Subsections 100B(2A), (2B) and (2C)
Item 13 Subsection 100B(3) (new definition of coverage area)

The amendments to section 100B made by these items correspond to the amendments to section 100A made by items 10 and 11 above.

While section 100A applies to NBS transmitter licences already held by national broadcasters, section 100B will apply to NBS transmitter licences issued under the national conversion scheme.

Item 14 New subsection 102(2A)

Subsection 102(1) requires the ACA to issue a transmitter licence to a commercial broadcaster (i.e. the holder of a BSA commercial television broadcasting licence) to transmit their broadcasting service upon the allocation of the licence for the broadcasting service under Part 4 or 6 of the BSA.

The effect of subsection 102(2) is that the BSA licence and the subsection 102(2) Radcom transmitter licence are connected; if the BSA licence is transferred, the Radcom licence is taken to be transferred with the BSA licence.

This item adds new subsection 102(2A), which applies where an additional commercial broadcasting licence is issued under section 38A (single-station markets) or section 38B (two-station markets), and there is an election under subclause 6(5A) of Schedule 4 of the BSA to multichannel both broadcasting services in digital mode (see item 86 of Schedule 1). In this situation, the operation of subsection 102(1) is suppressed; the ACA is not required to issue a new transmitter licence, and the existing transmitter licence will authorise transmission of the new digital service.

Item 15 Subsections 102(3A), (3B) and (3C); new subsections 102(4), (5), (6) and (7)

The amendments to section 102 made by this item correspond to the amendments to section 100A made by items 10 and 11 above. While section 100A applies to NBS transmitter licences already held by national broadcasters, section 102 applies to transmitter licences held by commercial television broadcasters.

The amendments prevent the transmitter from being operated to transmit the commercial broadcasters’ datacasting service in digital mode unless the licensee holds a BSA datacasting licence for that service. They also implement the delay in the commencement of datacasting by commercial broadcasters.

Item 16 New subsection 102A(2A)

New subsection 102A(2A) corresponds to new subsection 102(2A), inserted by item 14 above.

While section 102 deals with existing transmitter licences, section 102A deals with transmitter licences to be issued under the commercial television conversion scheme.

Item 17 Subsections 102A(4), (5) and (6); new subsection 102A(7)

The amendments to section 102A made by this item correspond to the amendments to section 102 made by item 15 above. The amendments limit the operation of a transmitter authorised to be used for datacasting services, to the transmission of licensed datacasting services. They also implement the delay in the commencement of datacasting by commercial television broadcasters (see item 10 above).

Item 18 New section 102B

The effect of new subsection 102B(1) is that a DTL may only be issued to a ‘qualified company’. This is defined in section 5 (see item 6 above) as an Australian company with a share capital.

The mechanism in new subsections 102B(2)-(7) is intended to help ensure that commercial and national broadcasters do not hold or control DTLs. For commercial broadcasters the control rules are in Part 5 of the BSA (new sections 54A and 56A, inserted by items 27 and 29 of Schedule 1 of the Bill). Clause 41 of Schedule 6 of the BSA imposes a similar restriction on the ABC and SBS.

Subsection (2) requires the ACA to refer an application from a ‘qualified company’ to the ABA within 14 days of receipt.

Subsection (5) prevents the ACA from making a decision on the application before either:

(a) the ACA receives a notice from the ABA, under either subsection (3) (directing the ACA not to issue the licence), or subsection (4) (effectively allowing the issue); or

(b) 30 days elapses.

Under subsections (3) and (4), the ABA has 30 days to consider whether the issue of the licence would result in a breach of the control rules, and accordingly to either direct the ACA under subsection (3) not to issue the licence, or notify the ACA of its view that the control rules would not be breached by the transfer.

As an ABA direction under subsection (3) is reviewable by the AAT under new section 292A, inserted by item 50 below, subsection (6) requires the ACA to include a copy of the ABA direction with its notice refusing to allocate a licence. The direction is required to include a statement of reasons and appeal rights (new section 292B).

The mechanism in subsections 102B(2)-(7) will not apply where a DTL is to be issued under a section 106 price-based allocation system. Amendments to section 106 made by items 21 and 22 below allow for a price-based allocation system to include a similar mechanism to that in subsections 102B(2)-(7).

Item 19 Subsection 103(2)
Item 20 New subsection 103(5)

The effect of these amendments, taken together with the amendments made by items 37 and 38 below, is that a DTL will be issued for a period of 10 years, and can only be renewed once for a further 5 years. This is of course subject to the suspension and cancellation provisions of Division 6 and new Division 6A of Part 3.3 of the Act (sections 125-128 and item 36 below).

The period of 10 years for datacasting transmitter licences is longer than the normal period for apparatus licences in subsection 103(3) (5 years). This longer period, coupled with a presumption of renewal for a further 5 years is considered necessary to provide increased certainty to datacasters, who will be required to make a substantial investment in infrastructure to deliver datacasting services.

Item 21 New subsections 106(6A), (6B) and (6C)
Item 22 Subsection 106(7)

Section 106 allows the ACA to determine a price-based allocation system for allocating and /or issuing specified apparatus licences. It is envisaged that such a system will be determined for at least the initial round of DTL allocation.

New subsections 106(6A) and (6B), inserted by item 21, allow a price-based allocation system for DTLs to provide for consultation with the ABA, and the ABA to direct the ACA not to issue a particular licence if it is satisfied that the issue of the licence would result in a breach of the control rules.

As such a direction is reviewable by the AAT under new section 292A, inserted by item 50 below, subclause 106(6C) requires the ACA to include a copy of the ABA direction with its notice refusing to allocate a licence. The direction is required to include a statement of reasons and appeal rights (new section 292B).

Item 23 Subsection 107(3)
Item 24 Subsection 108(5)

Conditions of DTLs are listed in new section 109A, inserted by item 25 below. The effect of these amendments is that the general apparatus licence conditions listed in sections 107 and 108 will not apply to DTLs.

Item 25 New section 109A

New section 109A lists the conditions applying to DTLs.

New paragraphs 109A(1)(a)-(g)

Under subsection 109A(1), the conditions include that the licensee must:

(a) comply with the Radcom Act;

(b) pay all ACA charges and apparatus licence tax; and

(c) inform all transmitter operators of the obligations to comply with the Act and the licence conditions.

These are standard broadcasting transmitter licence conditions (see paragraphs 109(1)(a), (b) and (c)).

Other conditions in subsection 109A(1) are that the licensee must:

(d) only operate the transmitter on the frequency channel and at the constancy specified in that licence;

(e) only operate the transmitter within the spectrum determined by the ABA under subsection 34(3) or ‘dropped through’ under paragraph 34(1)(fa) of the BSA;

(f) comply with the ABA’s technical planning guidelines under section 33 of the BSA; and

(g) commence to transmit a datacasting service within 1 year of the licence being allocated, or such longer period allowed by the ABA.

New paragraph 109A(1)(h) and (i)

Paragraph 109A(1)(h) restricts the use of the transmitter to the transmission of a datacasting service under a BSA datacasting licence. This condition expires at the end of 31 December 2006, which corresponds to the end of the moratorium on allocation of new CTV licences under section 28 of the BSA.

Paragraph 109A(1)(i) comes into operation on 1 January 2007, to replace the condition in paragraph 109A(1)(g). It allows the transmitter to be used to transmit a datacasting service if there is in force a BSA datacasting licence, another licence allocated by the ABA under the BSA or a class licence under the BSA, authorising the provision of the service. The control rules would continue to prevent the DTL being controlled by a commercial television broadcasting licensee (see items 27 and 28 of Schedule 1) or a national broadcaster (clause 41 of proposed Schedule 6). However, from 1 January 2007, a transmitter operated under a DTL could be used to transmit those broadcasting services where no control issues arose (for example, subscription and narrowcasting services).

Item 138 of Schedule 1 inserts new paragraphs 60(1)(h) and (i) in Schedule 4 to the BSA, to require a review to be conducted into the regulatory arrangements and revenue arrangements that should apply to these transmitters from 1 January 2007. It is intended that this review would consider the regulatory arrangements and revenue arrangements that should apply to enable a datacasting transmitter to be used to provide television broadcasting services.

New paragraphs 109A(1)(j) and (k)

A DTL can only be issued to a ‘qualified company’ (new subsection 102B(1) inserted by item 18 above). A ‘qualified company’ is an Australian company with a share capital (new definition in section 5, inserted by item 6 above). Paragraph 109A(1)(j) requires the licensee company to have a constitution at all times. Although the Corporations Law no longer requires a company to have a constitution, the condition in paragraph 109A(1)(j) is necessary for the operation of the condition in subsection 109A(2), discussed below.

Paragraph 109A(1)(k) allows the ACA to specify additional conditions in the licence.

New subsections 109A(2)-(4)

Subsection 109A(2) requires the licensees’ company constitution to contain provisions designed to support the operation of the control provisions of Part 5 (sections 50-78) and Schedule 1 of the BSA. These provisions are amended by items 25-39, 42, 43 and 58-66 of Schedule 1 to the Bill, discussed above.

Subsection 109A(2) requires the constitution to contain the following provisions, corresponding to the CTV licence conditions in paragraph 7(1)(c) of Schedule 2 of the BSA:

(a) a person cannot continue to be a shareholder if that would mean a breach of Part 5 of the BSA;

(b) the licensee may secure the disposal of shares necessary to stop a breach of Part 5 of the BSA;

(c) a new shareholder must give the licensee a statutory declaration:

(i) identifying the beneficial owners of the shares; and

(ii) stating whether any beneficial owner is in a position to exercise control of a CTV licence;

(d) a shareholder may be required to give the licensee statutory declarations about their eligibility to continue as a shareholder, given the rules in Part 5 of the BSA;

(e) if the shareholder does not provide a statutory declaration referred to in paragraph (c) or (d), the licensee may secure the disposal of the person’s shares.

Subsection 109A(3) contains equivalent provisions to those in subsection 109A(2) above, which must be included in the constitution of any company authorised by the licensee under section 114 of the Radcom Act to operate the transmitter.

Subsection 109A(4) provides that for the purposes of the control test referred to in subparagraphs 109A(2)(c)(ii) and (3)(c)(ii) above, Schedule 1 to the BSA is to be applied in a corresponding way to the way in which it applies for the purposes of Part 5 of the BSA (which sets out the control rules for that Act).

Item 26 Section 110

The ACA may impose additional conditions on various types of apparatus licences (see paragraphs 107(1)(g), 108A(1)(f), 109(1)(f)). Section 110 gives examples of conditions, relating to interference, which the ACA may impose on apparatus licences under those paragraphs.

This item extends the scope of section 110 so that it also applies to conditions imposed by the ACA on DTLs under paragraph 109A(1)(k) above.

Item 27 Paragraph 111(1)(c)

Paragraph 111(1)(c) allows the ACA to revoke or vary a condition which it had previously imposed on an apparatus licence under paragraph 107(1)(g), 108A(1)(f) or 109(1)(f).

This item extends those powers to any additional conditions imposed by the ACA on a DTL under paragraph 109A(1)(k) above.

Item 28 Paragraph 111(1)(d)

Paragraph 111(1)(d) allows the ACA to vary certain conditions of certain transmitter licences. However, this does not apply to transmitter licences issued under sections 101A, 102 or 102A, i.e. those transmitter licences which are related to BSA broadcasting licences.

This item adds DTLs to the types of transmitter licences for which paragraph 111(1)(d) cannot be used.

Item 29 Subsection 114(1)
Item 30 New subsections 114(3A), (3B), (3C), (3D), (3E) and (3F)
Item 31 New subsection 114(5)

Under subsection 114(1), an apparatus licensee may authorise another person to operate a transmitter or receiver under the licence. Without such an authorisation, a person other than the licensee who operated the device would be committing the offence in section 46 of operating a radiocommunications device without a licence.

However, an authorisation cannot be given if the ACA has prohibited such authorisations by a determination under section 115 (see subsection 114(2)) or if the person to be authorised holds or held an apparatus licence which has been cancelled in the last 2 years or has been suspended (see subsection 114(3)).

These amendments add further requirements for authorisations for DTLs, in new subsections 114(3A) and (3B)-(3F).

Authorisation only to a ‘qualified company’

Subsection 114(3A) requires an authorisation under a DTL to be given only to a ‘qualified company’, as defined in section 5 (see item 6 above).

Authorisation not to breach the BSA control rules

New subsections 114(3B)-(3F) and 114(5) provide a mechanism for the ABA to vet proposed authorisations for DTLs for compliance with the BSA control rules. (The control rules relating to DTLs are in new sections 54A and 56A and clause 41 of Schedule 6 of the BSA – these provisions are identified for the purposes of section 114 by subsection 114(5)).

Subsection 114(3B) requires the licensee to give the ABA at least 30 days written notice of an intended authorisation for a DTL. Subsection 114(3F) prevents the licensee from authorising the proposed person until either (a) the licensee receives a notice from the ABA allowing the authorisation (under subsection 114(3E)), or (b) 30 days elapses.

Subsection 114(3C) gives the ABA 30 days to consider whether the authorisation sought would result in a breach of the control rules, and if so to notify the licensee in writing accordingly. Subsection 114(3D) makes such an ABA notice binding on the licensee.

Under subsection 114(3E), the ABA, if satisfied that the proposed authorisation would not result in a breach, must notify the licensee in writing accordingly. The authorisation may then be made.

Items 32-36 generally

The amendments made by items 32-36 reflect the proposed division between the ABA and the ACA of the enforcement functions of suspension and cancellation of DTLs.

Currently, Division 6 of Part 3.3 of the Radcom Act (section 125-128) gives the ACA powers to suspend or cancel an apparatus licence (other than certain transmitter licences held by broadcasters) if the licensee contravenes a licence condition or the Act, or operates the apparatus in the course of contravening any other law (see section 125).

As a DTL is a type of apparatus licence, these suspension and cancellation powers would be available for DTLs. However, some DTL conditions involve matters regulated generally in the BSA - content restrictions and control rules. It is thus appropriate that the ABA have the effective responsibility for enforcing the DTL conditions dealing with those matters. These amendments are intended to achieve that outcome.

The conditions for which the ABA is given enforcement responsibility are:

• paragraph 109A(1)(g) (datacasting service must commence within 1 year of licence allocation);

• paragraph 109A(1)(h) (before 2007, a BSA datacasting licence must be in force for the service);

• paragraph 109A(1)(i) (after 2007, some form of BSA licence must be in force for the service);

• paragraph 109A(1)(j) (the licensee, and any company authorised by the licensee to operate the relevant transmitter, must at all times have a company constitution);

• subsection 109A(2) (the licensee’s constitution must at all times contain certain provisions); and

• subsection 109A(3) (the constitution of any company authorised by the licensee must at all times contain certain provisions).

Item 32 Paragraph 118(1)(c)
Item 33 Paragraph 118(1)(d)

Under paragraph 118(1)(c) and (d), apparatus licensees are required to notify all persons authorised under section 114 if the licence is suspended or cancelled under section 126 or 128 respectively.

These amendments extend the notification obligation to the situation where the licence is suspended or cancelled under new sections 128C or 128D. The powers in new sections 128C and 128D, which are discussed below, will be available where a breach of a DTL condition listed above is involved.

Item 34 Division 6 of Part 3.3 (heading)

This item changes the heading of existing Division 6 consequential upon the insertion of new Division 6A by item 36.

Item 35 Paragraph 125(1)(a)

Subsection 125(1) sets out the application of Division 6 relating to suspending and cancelling apparatus licences. This item amends paragraph 125(1)(a) to exclude a breach of a datacasting licence condition listed above from the application of Division 6. In the case of these conditions, new Division 6A (sections 128C-128E) gives the ABA effective responsibility for suspending or cancelling a datacasting transmitter licence.

Item 36 New Division 6A of Part 3 (new sections 128C, 128D and 128E)

New section 128C

New section 128C, which is a parallel power to section 126, applies where a listed DTL condition is breached. In such a case, the ABA may direct the ACA in writing to suspend the licence for a specified period (subsection 128C(1)).

If the ABA gives the ACA such a direction, the ACA must suspend the licence for that period, by written notice to the licensee (subsection 128C(2)).

The ACA must include a copy of the ABA’s direction with the notice (subsection 128C(3)). The direction is required to include a statement of reasons and appeal rights (new section 292B).

Under subsection 128C(4), the ABA may direct the ACA to revoke the suspension at any time. If so directed, subsection 128C(5) requires the ACA to revoke the suspension accordingly.

Subsection 128C(6) applies section 127 to a suspension under section 128C, with the effect that the maximum period of suspension can be 28 days, unless proceedings for an offence against the Act are instituted within those 28 days.

New section 128D

Section 128 is the ACA’s general power to cancel an apparatus licence.

New section 128D, which is a parallel power to section 128, applies where a listed DTL condition is breached. In such a case, the ABA may direct the ACA in writing to cancel the licence (subsection 128D(1)).

If the ABA gives the ACA such a direction, the ACA must cancel the licence, by written notice to the licensee (subsection 128D(2)).

The ACA must include a copy of the ABA’s direction with the notice (subsection 128D(3)). The direction is required to include a statement of reasons and appeal rights (new section 292B).

New section 128E

New section 128E applies to an ‘eligible decision’. Under subsection 128E(1), an ‘eligible decision’ is a decision of the ABA under subsection 128C(1) or 128D(1) to give a direction to the ACA, where the direction was given because of contravention of a licence condition in paragraph 109A(1)(h). A decision of the ACA to suspend or cancel a licence in compliance with such an ABA direction, under subsection 128C(2) or 128D(2) respectively, is also treated as an ‘eligible decision’. This removes any scope for argument that the ACA’s actions in compliance with an ABA direction can be separately stayed.

The effect of subsections 128E(2), (3) and (4) is that an ‘eligible decision’ cannot be temporarily suspended by the Federal Court, the Federal Magistrate’s Court or the AAT, pending the resolution of any challenge to the direction under the Administrative Decisions (Judicial Review) Act 1977, the Judiciary Act 1903, or the Administrative Appeals Tribunal Act. The inclusion of provisions preventing the temporary suspension of such decisions is unusual, and is only provided for in the case of a contravention of the licence condition in paragraph 109A(1)(h) due to the key role of that provision in preventing a datacasting transmitter being used to provide a broadcasting service before 1 January 2007. In the absence of such a provision, there may be considerable financial incentives for a datacasting transmitter licensee to test the boundaries of what is permitted, while using whatever scope is available for legal challenge to delay the effect of any enforcement action taken against it.

The provision is based on a recently enacted provision, section 151AQA of the Trade Practices Act 1974, which was enacted to deal with concerns about the use of litigation to delay enforcement action in relation to anti-competitive conduct in the telecommunications industry.

Item 37 New subsection 130(2B)
Item 38 New subsection 131(2)

The effect of these amendments, taken together with the amendments to section 103 made by items 19 and 20 above, is that a DTL may only be renewed once, and only for a period of 5 years.

Item 39 Subsection 131AB(1)
Item 40 Paragraph 131AB(3)(a)
Item 41 New section 131ACA

An apparatus licence is generally transferable upon application by the licensee in the approved form signed by both the licensee and the transferee (section 131AA and subsection 131AB(1)). However, this is subject to the criteria in subsection 131AB(2), and any ACA determination under section 131AC prohibiting transfer in certain situations.

Amendments to section 131AB – items 39 and 40

Item 39 amends subsection 131AB(1) so that the transfer of a DTL is also subject to the restrictions in new section 131ACA.

Item 40 amends paragraph 131AB(3)(a) consequential upon the insertion of new Division 6A by item 36.

New section 131ACA – item 41

New section 131ACA, inserted by item 41, adds further requirements for the transfer of DTLs. The effect of subsection 131ACA(1) is that a DTL may only be transferred to a company to whom the licence could have been issued, i.e. a ‘qualified company’ as defined in section 5 (see item 6 above).

Subsections 131ACA(2)-(6) provide a mechanism for the ACA to refer transfer applications to the ABA, for assessment of whether the proposed transfer would result in a breach of the BSA control rules. The control rules for DTLs are in sections 54A and 56A of the BSA and clause 41 of new Schedule 6 of the BSA.

The effect of subsection 131ACA(2) is that the ACA must refer the application to the ABA within 14 days of receipt. Subsection (5) prevents the ACA from making a decision on the transfer before either:

(a) the ACA receives a notice from the ABA, under either subsection (3) (directing the ACA not to transfer the licence), or subsection (4) (effectively allowing the transfer); or

(b) 30 days elapses.

Under subsections (3) and (4), the ABA has 30 days to consider whether the proposed transfer would result in a breach of the control rules, and accordingly to either direct the ACA under subsection (3) not to transfer the licence, or notify the ACA of its view that the control rules would not be breached by the transfer.

As an ABA direction under subsection (3) is reviewable by the AAT under new section 292A (inserted by item 50 below) subsection (6) requires the ACA to include a copy of the ABA direction with its notice refusing to transfer the licence. The direction is required to include a statement of reasons and appeal rights (new section 292B).

Item 42 Division 9 of Part 3.3 (section 131AD)

Division 9 of Part 3.3 consists of section 131AD, prohibiting the issue of transmitter licences for datacasting services. Division 9 is repealed as a consequence of the amendments made by this Schedule to provide new regulatory arrangements for datacasting transmitter licences.

Item 43 Paragraph 148(b)
Item 44 Paragraph 148(c)

Under section 143, the ACA must maintain a Register of Radiocommunications Licences. Under section 147, the Register includes details of all apparatus licences. DTLs will be a type of apparatus licence.

Under section 148, the Register must be updated to take account of suspensions under section 126 and cancellations under section 128.

These items amend section 148 so that suspensions and cancellations under new sections 128C and 128D (see discussion of items 32-36 above) will be reflected in the Register.

Item 45 Paragraph 238(3)(c)

Subsection 238(3) specifically allows the ACA to delegate to the ABA a number of its powers. Among the powers which may be so delegated are the powers in paragraphs 107(1)(g), 108A(1)(f) and 109(1)(f) to impose additional conditions on various types of apparatus licences.

This amendment adds the power to impose additional conditions on DTLs, i.e. new paragraph 109A(1)(k), to the list of powers which may be delegated to the ABA.

Item 46 Before section 285
Item 47 New paragraph 285(eb)
Item 48 Paragraph 285(f)
Item 49 Paragraph 285(ma)
Item 50 New Division 2 of Part 5.6 (new sections 292A and 292B)

Part 5.6 of the Act (sections 285-292) deals with merits review of ACA decisions made under the Radcom Act. The scheme provides for internal reconsideration by the ACA, and then a second tier of review by the AAT.

The amendments made to Part 5.6 by these items:

• make the new ACA powers in relation to DTLs reviewable in the ordinary way; and

• make the new ABA powers in relation to DTLs reviewable directly by the AAT, without internal reconsideration.

It is not appropriate to provide for internal reconsideration for these new ABA powers because, given the serious consequences of their exercise, it is expected that they would be exercised by the ABA itself rather than any delegate. In these circumstances, any application for merits review should go directly to the AAT.

Item 46

The effect of item 46 is to place the existing provisions of Part 5.6 in new Division 1 of Part 5.6. (Item 50 places new sections 292A and 292B, provisions for direct AAT review of ABA decisions, in new Division 2 of Part 5.6.)

Items 47-49 – amendments to section 285

Section 285 lists the decisions which are internally reviewable by the ACA.

Item 47 adds to the list (as new paragraph 285(eb)) a decision under section 102B to refuse to issue a DTL. However, if the decision was made at the direction of the ABA under subsection 102B(3), it is not internally reviewable by the ACA. (Under new section 292A, inserted by item 50 below, the ABA direction itself is reviewable directly by the AAT.)

Item 48 adds to the list (by amending paragraph 285(f)) a decision under paragraph 109A(1)(k) to specify additional conditions on a DTL.

Item 49 excludes from paragraph 295(ma) (a refusal to transfer an apparatus licence under section 131AB) those refusals made at the direction of the ABA under subsection 131ACA(3). (Under section 292A, the ABA direction itself is reviewable directly by the AAT.)

Item 50 – new sections 292A and 292B

Item 50 inserts new Division 2 of Part 5.6, consisting of new sections 292A and 292B. These sections provide for AAT review of ABA decisions under the Radcom Act.

Under section 292A, directions by the ABA in relation to DTLs, given to either the ACA or a licensee, will be reviewable directly by the AAT. The relevant directions powers are:

(a) subsection 102B(3) (the power to direct the ACA not to issue a DTL, where issue would lead to a breach of the BSA control rules);

(b) subsection 106(6A) (the power in the ACA’s price-based allocation system for the ABA to direct the ACA not to issue a DTL, where issue would lead to a breach of the BSA control rules);

(c) subsection 114(3C) (the power to direct a DT licensee not to authorise a person under section 114, where authorisation would lead to a breach of the BSA control rules);

(d) subsection 128C(1) (the power to direct the ACA to suspend a DTL for breach of certain listed conditions);

(e) subsection 128D(1) (the power to direct the ACA to cancel a DTL for breach of those listed conditions);

(f) subsection 131ACA(3) (the power to direct the ACA not to transfer a DTL, where transfer would lead to a breach of the BSA control rules).

Section 292B requires the ABA to give a statement of reasons for making a direction, and include notice that an application may be made to the AAT for review of the direction.

PART 2 – TRANSITIONAL PROVISIONS

Item 51 Transitional – regulations

This item allows regulations to be made dealing with transitional issues arising from the substantive amendments to the Radcom Act made by Part 1 of Schedule 2. No transitional requirements have been identified. A regulation making power is included to deal with any unforeseen transitional issues which may arise in implementing the new measures in Schedule 2 to the Bill.

SCHEDULE 3 – AMENDMENT OF OTHER ACTS

Australian Security Intelligence Organisation Act 1979

Item 1 Subsection 92(2)

Subsection 92(1) of this Act makes it an offence to ‘publish ... by radio broadcast or television, or otherwise make public’ the identity of an ASIO officer. There is an exemption for members of the Parliamentary Joint Committee on ASIO. The phrase ‘otherwise make public’ would be wide enough to include transmission on a datacasting service.

However, under subsection 92(2), the offence does not apply to the ‘broadcasting’ or reporting of Parliament (except the Committee referred to in subsection 92(1)). This item therefore amends subsection 92(2) to extend the exemption to the ‘datacasting’ of Parliament.

Freedom of Information Act 1982

Item 2 Division 1 of Part II of Schedule 2

Under Part II of Schedule 2 of the FOI Act, specified agencies are exempt from the Act in respect of particular documents (see subsection 7(2)). The agencies include ABC and SBS, in respect of their ‘program material’.

The broad definition of ‘document’ in subsection 4(1) of the FOI Act would include an ABC or SBS television program, where it was in the form of a written transcript or an audio- or video-tape. The effect of the exemptions is that copies of programs cannot be obtained through FOI.

As not all datacasting content would be covered by the term ‘program material’, the exemptions are extended to also apply to the ABC and SBS in respect of their ‘datacasting content’.

Retirement Savings Accounts Act 1997

Item 3 Paragraph 70(d)
Item 4 Paragraph 71(a)

This Act regulates retirement savings accounts (RSAs – see section 8).

Section 70 defines ‘regulated acts’ for the purposes of section 71 and 72. A ‘regulated act’ includes applying for, opening, or making transactions in, a RSA. Under paragraph 70(1)(d), the ‘broadcasting’ of a statement or advertisement about a RSA is also a ‘regulated act’.

Paragraph 71(a) makes it an offence to induce a person to engage in a ‘regulated act’ by e.g. ‘broadcasting’ a false or misleading statement or advertisement.

These items extend the above provisions to include ‘datacasting’.

Superannuation Industry (Supervision) Act 1993

Item 5 Paragraph 144(e)
Item 6 Paragraph 145(a)

The concept of ‘regulated act’ in the Retirement Savings Accounts Act 1997 also appears in sections 144 and 145 of this Act.

These items therefore extend paragraphs 144(e) and 145(a) to ‘datacasting’, in a corresponding way to items 3 and 4 above.

Tobacco Advertising Prohibition Act 1992

Item 7 Section 8 (at the end of the definition of broadcast)

This item adds a new paragraph (c) to the definition of ‘broadcast’ in section 8. This will ensure that the tobacco advertising restrictions in the Act (see sections 10, 13, 14, 26 and 26A) will also apply to datacasting services.

DATACASTING CHARGE (IMPOSITION)
AMENDMENT BILL 2000

Clause 1 – Short title

Clause 1 provides for the citation of the Datacasting Charge (Imposition) Amendment Act 2000.

Clause 2 – Commencement

The Act will commence at the same time as Schedule 6 to the Broadcasting Services Act 1992, to be added to that Act by item 140 of Schedule 1 to the Broadcasting Services Amendment (Digital Television and Datacasting) Act 2000. This will be on a date to be proclaimed, subject to automatic commencement 6 months after Royal Assent.

Clause 3 – Schedule(s)

By virtue of this clause, provisions of the Datacasting Charge (Imposition) Act 1998 are amended as set out in Schedule 1 to the Bill.

SCHEDULE 1 – AMENDMENT OF THE
DATACASTING CHARGE (IMPOSITION) ACT 1998

Item 1 Section 3 (new definition of BSA datacasting licence)

This item defines ‘BSA datacasting licence’ as a licence under Schedule 6 to the BSA.

The term is used in new paragraph 6(da) (see item 4 below).

Item 2 Section 3 (definition of datacasting service)

The amendment made by this item reflects the fact that the BSA definition of ‘datacasting service’ will no longer be in Schedule 4 but section 6 of the BSA (see items 12 and 74 of Schedule 1).

Item 3 Section 3 (new definition of designated teletext service)

‘Designated teletext service’, under the new definition inserted by this item, has the same meaning as in clause 2 of Schedule 4 of the BSA. The BSA definition is inserted by item 75 of Schedule 1 of the Broadcasting Services Amendment (Digital Television and Datacasting) Bill 2000 (the Digital Bill).

The term is used in new paragraph 6(da) (see item 4 below). A ‘designated teletext service’ is a teletext service provided by a commercial television broadcaster which is substantially the same as the service provided by that broadcaster throughout the two-year period immediately prior to the commencement of Schedule 6 of the BSA. (Schedule 6 of the BSA commences on a date to be proclaimed, subject to automatic commencement 6 months after Royal Assent.) It is intended that existing teletext services provided by free to air broadcasters, and their digital equivalents, will not be subject to the datacasting charge.

Item 4 New paragraph 6(da)

Section 6 of the Datacasting Charge (Imposition) Act 1998 (the DCI Act) imposes a charge on broadcasters who hold Radcom Act transmitter licences which authorise datacasting, if the transmitter is used for datacasting purposes. The charge is payable in relation to the transmission of datacasting services in each financial year. The amount of the charge is set by means of a written determination by the ACA for that year (see section 7 of the DCI Act).

Before making the first year’s determination under section 7 of the DCI Act, clause 53 of Schedule 4 of the BSA requires the ACA to give the Minister a written report about proposals to be included in the determination.

New subclause 53(2A) of Schedule 4 of the BSA (inserted by item 137 of Schedule 1 of the Digital Bill) will require the ACA’s report to be directed towards ensuring that only datacasting services requiring a datacasting licence, which are not ‘designated teletext services’ (as defined in clause 2 of Schedule 4 of the BSA – see item 75 of Schedule 1 of the Digital Bill), will be considered in calculating the charge. The intention is that a ‘designated teletext service’ will be disregarded for the purposes of calculating the datacasting charge payable by the licensee.

The effect of new paragraph 6(da), inserted by this item, is that if the only datacasting service transmitted by or on behalf of a broadcaster under that transmitter licence is a ‘designated teletext service’, the datacasting charge will not apply to the transmitter licence concerned.

^[1] The European DVB-T suite of standards form the basis of a transmission standard for digital television in Australia developed within a working group of Standards Australia (SA) following extensive consultation through the a process involving all major industry groups and the Australian Consumers Association. Changes to the DVB transmission and receiver standards reflect relatively minor differences in the technical requirements in Europe and Australia.

^[2] This minimum HDTV format is defined within the international standards, however in the context of the PAL standard, in practical terms, it equates to a 576 line display referred to as ‘576p’ and represents a display format with the same number of horizontal lines as a PAL analog or SDTV format (called 576i) but progressively scanned (rather than interlaced) so that each picture field includes twice as much information as the same field in the comparative analog or SDTV field.

^[3] Population figures for licence areas have been determined by the Australian Broadcasting Authority, based upon the 1996 census.

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