OFFICE OF THE MINISTER OF BROADCASTING
OFFICE OF THE ASSOCIATE MINISTER OF COMMUNICATIONS
The Chair
CABINET ECONOMIC DEVELOPMENT COMMITTEE
DIGITAL SATELLITE TELEVISION - SPECTRUM MANAGEMENT (PAPER D)
PROPOSAL
1
This paper reports on a favoured option for allocating or designating spectrum
suitable for digital satellite television.
EXECUTIVE SUMMARY
2
In December 2002 Cabinet agreed on objectives to guide future digital TV policy
development and directed officials to report back on various issues
[CAB Min (02) 33/4 refers]. This paper considers spectrum suitable for digital
satellite television.
3
The paper focuses on the current and potential use of spectrum suitable for
satellite TV, particularly the 12 GHz band, which is currently used by Sky and
TVNZ's broadcasting satellite services.
4
The paper recognises that the highest value use of the 12 GHz band is likely to
be satellite operations and proposes that, consequently, the Crown should
manage this band to maximise its potential use for satellite services. Three
spectrum management options are considered, and the paper seeks agreement
for the 12 GHz band to be managed through a Ministerial Directive, which,
effectively, reserves the band for satellite use, and through the issue of receive
protection licences (option 3).
5
Licences to operate terrestrial services limit use of parts of the 12 GHz band for
satellite services and some of these services will be re-licensed in other bands.
Moving these licences may enable additional digital satellite television services
to be broadcast to New Zealand.
BACKGROUND
6
In December 2002 Cabinet agreed on objectives to guide future digital TV policy
development and directed departments to report back by 30 June 2003 (delayed
to allow further consultation with industry) on various issues [CAB Min (02) 33/4
refers]. This paper proposes a favoured option for allocating or designating
spectrum suitable for digital satellite television.
7
Cabinet also agreed that the development of digital television does not, of itself,
require the revision of government’s objectives of ensuring that radio spectrum
2
allocation policy maximises the value of spectrum to New Zealand society, or
revision of the broadcasting content objectives agreed by Cabinet in July 2000
[CAB Min (00) M22 15A and C refers], but that digital television has the potential
to assist the achievement of these government objectives. Cabinet also agreed
that broadcasters and viewers should be free to choose the platform (eg satellite,
terrestrial or cable) by which digital television is provided, based on factors such
as cost, content and reliability.
8
In accordance with the above decisions, government can facilitate the efficient
use of existing satellite infrastructure by appropriately managing the radio
frequency spectrum bands capable of being used for satellite TV. Digital satellite
television is already present in New Zealand, largely through the pay-TV
subscription service offered by Sky. TVNZ has access to satellite transponder
capacity on the same satellite as Sky currently uses, Optus B1 (160° east).
9
In digital satellite TV, the bit streams of different television programmes are
brought together into a single bit stream and transmitted (the “up-link”) using
radio frequency to a satellite, which then retransmits those signals (the “downlink”) on a different radio frequency to the desired area (eg New Zealand). The
down-linked signals are then received by a consumer satellite dish, converted to
analogue format by a set-top-box, and viewed on a television set. All consumer
satellite television services covering New Zealand are in digital format.
10
Some parts of industry have recently made representations to MED about a
possible “New Zealand” satellite. If a New Zealand satellite were widely
supported by industry, the proponents would need to seek venture capital
funding to progress the overall project. Such a satellite could provide some
competition in satellite services, but the extent of demand and price elasticity in
the overall market is not yet clear. A spectrum reservation process has been
initiated with the International Telecommunications Union (ITU), but will take a
number of years.
11
This paper considers two main questions regarding spectrum for satellite TV:
·
What spectrum is available for satellite TV?
·
How should this spectrum be managed?
What spectrum is available for satellite TV?
12
The main radio frequency bands suitable for satellite television covering New
Zealand are between 11.7 and 12.75 GHz (the 12 GHz bands). Spectrum
available for satellite TV is primarily determined by the ITU allocations for
satellite bands and the present or potential frequency usage of the bands, which
can be summarised as follows:
·
11.7-12.2 GHz - international allocation gives priority to broadcast satellite,
but no satellite is currently in place. This band contains (largely unused)
terrestrial licences, which are issued on the basis that they must not interfere
with internationally planned broadcast satellite use.
3
·
12.2-12.5 GHz - no international allocation priority, resulting in licensing on a
first-come-first-served basis to fixed satellite and terrestrial services.
Terrestrial licenses (IHUG, TVNZ) limits satellite use of two Optus B1
transponders.
·
12.5-12.75 GHz - no international allocation priority, but no terrestrial licences
have been granted in this band, and it contains the main Optus B1 broadcast
satellite capacity.
13
Other bands are allocated internationally for broadcasting satellite services,
although they are not considered useful for commercial satellite TV services
covering New Zealand at this time.
14
From a technical perspective, a satellite transponder may be used for either fixed
satellite or broadcasting satellite with very little difference in the actual
transmission. This means that the 12.2-12.5 GHz band is being used for
broadcasting satellite in New Zealand despite the international allocation making
no mention of broadcasting satellite. This is a permitted action under Article 4.4
of the International Radio Regulations.
Further, from an engineering
perspective, the difference between fixed and broadcasting services can be
academic, as a fixed satellite that services a large number of points has the
same protection requirements as a broadcast satellite.
15
Terrestrial services are generally not compatible with satellite services in the
same frequency band at the same geographic location, as the terrestrial services
can prevent reception of the satellite service and vice versa.
Present and potential frequency usage of the 12 GHz bands in New Zealand.
16
Currently, the main satellite suitable for digital TV coverage of New Zealand is
Optus B1, which has down-links in the bands 12.2-12.5 GHz (four transponders)
and 12.5-12.75 GHz bands (four transponders). The corresponding up-links are
in the 14 GHz band. Sky and Television New Zealand have leases of
transponder capacity (six transponders) on the Optus satellite.
17
The remaining two Optus B1 transponders are suitable for either broadcasting
satellite or fixed satellite uses. However, the utility of these two transponders for
broadcasting is severely restricted by terrestrial licensing in the 12.2-12.375 GHz
band. This means that although Optus has sufficient spectrum available on
Optus B1 for current services, there is limited ability to expand the services,
unless terrestrial services are removed from the band.
18
Other satellites, such as PanAmSat, also cover New Zealand, but at lower power
levels which necessitate larger receiving antennas. Depending upon antenna
size, satellite location and other technical parameters, it is possible to utilise two
or more satellites at different orbital locations within the same frequency band.
19
The MED understands that the Optus B1 satellite is due to be replaced in the
near future. MED also understands that negotiations are continuing between
Sky and various satellite services providers on whether Sky will move to a
replacement Optus satellite or to a different satellite.
Any replacement
4
broadcasting satellite used by Sky is likely to downlink in the 12 GHz bands, but
could well operate from a different orbital location. One possibility may be a
“New Zealand satellite” which is currently being investigated by commercial
interests.
How should 12 GHz bands be managed?
20
Government's radio spectrum policy seeks, as its primary aim, to maximise the
value of the radio spectrum to New Zealand, by ensuring that the radio spectrum
is applied to its highest value use.
21
This paper seeks the Committee's agreement that the highest value use of the
12 GHz bands is likely to be satellite (broadcasting or fixed), at least in the
medium term. With respect to 11.7-12.2 GHz, this is primarily founded on the
international designation. With respect to 12.2-12.5 GHz and 12.5-12.75 GHz,
officials note significant investment of satellite owners in providing a satellite for
these bands, considerable investment by Sky in satellite receiver antennas and
other receiving equipment associated with its satellite service, and minimal
actual use of the band for terrestrial fixed services. Furthermore, the 12 GHz
bands are the only spectrum practicably available for broadcasting satellite, while
terrestrial fixed services can be accommodated in other bands without major
cost. Australia gives priority to satellite use with respect to these bands.
22
A number of management options are available for these bands, taking into
account this assessment of highest value use.
Option one: Continue current protection of downlinks
23
Currently, terrestrial and satellite use of the 12 GHz band is managed under the
administrative licence regime. A difficulty with this is that the satellite transmits
from outside New Zealand's jurisdiction, and is therefore not covered by the
Radiocommunications Act 1989. Previously, recognition of these transmissions
has been provided as a result of licensing the transmissions to the satellite and
by ensuring the spectrum required for reception of the satellite transmission is
available. Under current licensing policies, the terms of the up-link licence are
drafted so as to protect the intended down-link frequency.
24
The current practice has limitations, the most important being that it does not
provide a clear signal as to which of satellite and terrestrial services is the higher
value use. Instead, licensing is essentially conducted on a first-come-first-served
basis. This is problematic in the band 12.2-12.5 GHz, where spectrum licensed
for terrestrial use conflicts with some Optus B1 transponders.
25
Another limitation is that the current practice is only effective if the transmissions
to the satellite originate within New Zealand. If the satellite up-link originates
outside New Zealand, it is unclear whether the record keeping systems currently
in place are sufficiently robust to prevent the registration of a terrestrial licence in
the same frequency as the down-link.
5
Option Two: Competitive allocation of spectrum rights
26
Government’s objectives of ensuring that radio spectrum allocation policy
maximises the value of spectrum to New Zealand society suggest that where
demand for spectrum exceeds supply, or there are competing uses,
management rights or, in certain cases, spectrum licences should be allocated
through a competitive process, such as an auction. Allocation of spectrum rights
is intended to allow the market to determine the highest value use of the
spectrum allocated.
27
The use of a property rights regime is difficult, although not impossible, in bands
allocated to satellite services, as a result of the international coordination
framework and the fact that satellites are outside New Zealand's territorial
jurisdiction. A successful bidder at any auction held by the New Zealand
government would not necessarily be able to acquire capacity on a satellite that
is positioned in orbit above the equator and is owned and operated by an
overseas company. Allocation of property rights could result in rightholders
having no means of transmission, or conversely, lessees of transponder space
being unable to obtain a licence. It is impractical to reserve satellite spectrum for
public service broadcasting or other purposes for the same reasons. Instead,
public broadcasters can negotiate access to satellite capacity on commercial
terms, as Television New Zealand and the Māori Television Service have done.
Option Three: managed use of the 12 GHz bands
28
If the Committee accepts that satellite reception, rather than terrestrial services,
represents the highest value use of the 12 GHz bands for New Zealand, the
government could actively manage these bands to maximise use for satellite
services. Use of the 12 GHz bands can be managed through a Ministerial
Directive1 and/or receiver protection licences. A suitably drafted directive would
prevent or restrict new terrestrial licensing in the 12 GHz bands. This change
would be relatively simple to apply administratively.
29
Under this option, the 12 GHz bands would be applied to its highest value use
(i.e. satellite), but would not necessarily be held by the user that valued the
spectrum the most. Access to satellite spectrum would be determined through
access to satellite capacity, not by government allocation.
30
Satellite users could also be given the opportunity to apply for a licence
protecting their transmissions from interference, in addition to restricting use of
the bands through a Ministerial Directive. This could be achieved through the
current system of recognising down-links through the up-link licence, or
alternatively, receiver protection licences could be granted to satellite operator.
Although no licence is necessary to authorise a down-link signal from a satellite
to New Zealand, it is possible to issue a receiver protection licence protecting the
reception of satellite down-links from interference from terrestrial transmitters
operating in the same frequency band.
1
A Ministerial Directive is a statement of the general policy of the government communicated by the Minister of Communications to
the Chief Executive of the Ministry of Economic Development pursuant to section 112 of the Radiocommunications Act 1989.
6
Other Considerations
31
If the Committee accepts that satellite represents the highest value use of the
12 GHz bands existing terrestrial licence holders in these bands, who obtained
their licences in accordance with the present policy will be affected. Under
option three, existing terrestrial services would be moved to other bands over
time, allowing existing satellites to be fully utilised for broadcasting. The
broadcasting industry generally agrees with the option three approach.
32
Present terrestrial use of the 12 GHz bands is relatively limited and occurs
largely in Auckland. This band has been selected to date because of the
availability of equipment that can be adapted for this use. There are likely to be
other nearby bands where equipment is also available and a transition process
seems practicable. To minimise costs a period of up to three years may be
required if subscriber churn is to be utilised, although the spectrum would be
cleared progressively from commencement of the transition plan.
Conclusion on Management of 11.7-12.75 GHz
33
This paper seeks the Committee's agreement to option three. A Ministerial
Directive restricting use of the 12 GHz bands to satellite (fixed or broadcasting)
recognises that satellite reception, rather than terrestrial services represents the
highest value use of the 12 GHz bands in New Zealand. Offering protection
licences in the 12 GHz band provides broadcasters the opportunity to obtain
more certain protection from interference.
CONSULTATION
34
This paper has been prepared by the Ministry of Economic Development, in
consultation with the Ministry for Culture and Heritage, Te Puni Kokiri and the
Treasury. A draft of this paper was provided to CCMAU for its information.
Details of consultation with industry are set out in the paper entitled “Digital
Television: Overview Paper”.
FISCAL, HUMAN RIGHTS AND LEGISLATIVE IMPLICATIONS
35
None.
REGULATORY IMPACT AND COMPLIANCE COST STATEMENT
36
Not required.
PUBLICITY
37
It is proposed that the Minister of Broadcasting and Associate Minister of
Communications be invited to announce decisions on spectrum management for
digital satellite TV and to arrange for this paper to be made publicly available.
RECOMMENDATIONS
38
It is recommended that the Committee:
7
1
Note that in December 2002 Cabinet directed officials to report to the
Committee on a favoured option for allocating or designating spectrum
suitable for digital satellite television [CAB Min (02) 33/4 refers];
2
Note that the main radio frequency bands suitable for satellite television
covering New Zealand are between 11.7 and 12.75 GHz, that use of
these bands is primarily determined by International Telecommunications
Union allocations and present and potential frequency usage of the
bands, which can be summarised as follows:
2.1
11.7-12.2 GHz - international allocation gives priority to broadcast
satellite, but no satellite is currently in place. This band contains
(largely unused) terrestrial licences, which are required to not
interfere with internationally planned broadcast satellite use.
2.2
12.2-12.5 GHz - no international allocation priority, resulting in
licensing on a first-come-first-served basis to fixed satellite and
terrestrial services.
Terrestrial licenses (IHUG, TVNZ) limits
satellite use of two Optus B1 transponders.
2.3
12.5-12.75 GHz - no international allocation priority, but no
terrestrial licences have been granted in this band, and it contains
the main Optus B1 broadcast satellite capacity.
3
Note that government can manage potential interference in satellite bands
by recognising the satellite downlink in licences granted for satellite
uplinks (status quo), allocation of management rights, or direct
management of the bands to achieve government's view of the highest
value use.
4
Agree that the highest value use of the bands 11.7-12.75 GHz is satellite
use, whether fixed or broadcast.
5
Agree that the 11.7-12.75 GHz bands be managed to maximise satellite
use of the bands through a Ministerial Directive and the issue of receive
protection licences on request (option three of the paper).
6
Agree that the Ministry of Economic Development should commence a
transitional plan in order to vacate terrestrial uses of the band 11.7-12.75
GHz as necessary to achieve the highest value use.
7
Invite the Minister of Broadcasting and Associate Minister of
Communications to announce decisions on spectrum management for
digital satellite and to arrange for this paper to be made publicly available.
Steve Maharey
Minister of Broadcasting
Hon David Cunliffe
Associate Minister of Communications