Telecommunications Policy 35 (2011) 773–787
Contents lists available at ScienceDirect
Telecommunications Policy
URL: www.elsevier.com/locate/telpol
Selection of standards for digital television: The battle for
Latin America
Jorge Anguloa, Joan Calzadab,n, Alejandro Estruchb
a
b
Carvallo, Gagliardone, Angulo Abogados, Paraguay
Departament de Polı́tica Economica,
Universitat de Barcelona, Av. Diagonal 690, Barcelona 08034, Spain
a r t i c l e i n f o
abstract
Available online 19 August 2011
This paper analyses the implementation of Terrestrial Digital Technology (TDT) standards
in Latin America. The analysis suggests that while some governments have chosen the
standard attending to their industrial objectives, others have been influenced by the
relevance of network externalities and scale economies and by the political and
commercial relationship with their neighbours. The discussion about the technical
characteristics of the systems was only relevant in the first years of the process, when
the leading countries of the region had still not made their selection. Brazil decided to
create its own version of the Japanese ISDB standard in 2006, and in the following years it
has persuaded a significant part of the continent to choose it. Another block of countries
has adopted the US ATSC standard. The most prominent case is that of Mexico, which has
a preferential access to the US market. Only three countries have chosen the European
DVB standard, the most widely used standard in the world. Colombia has tried to lead its
introduction in the continent, but the results so far have been meagre.
& 2011 Elsevier Ltd. All rights reserved.
Keywords:
Digital television
Standards
TDT
ISDB
ATSC
DVB
Latin America
1. Introduction
The digitisation of television has freed up a part of the electromagnetic spectrum for other uses, improved image and
sound quality, increased the interoperability between telecommunications and the IT, created interactive services and
permitted the transmission of television via mobile networks. These changes require the modification of all the production
and distribution infrastructures for television signals, from cameras to transmission aerials. In most countries the
development of Terrestrial Digital Technology (TDT) has sparked a rapid transition from analogue to digital technology,
even though digitisation has also taken place in cable and satellite television.
There are four international TDT standards: North American (ATSC), European (DVB-T), Japanese (ISDB-T) and Chinese
(DMB-T).1 These standards are not compatible with each other and the broadcasts from one system cannot be received by
televisions in a different one. This situation has forced countries to choose the standard that is most suited to their objectives,
and it has also caused standards promoters to compete in order to attract the largest number of countries possible. This article
analyzes the selection of TDT standards in Latin America, focusing on the technical, economic and political factors that have
influenced each country’s decision. Without denying their relevance, other essential aspects of the audiovisual policy such as
the switch off of analogue television are not considered.
n
Corresponding author. Tel.: þ34 93 4034743; fax: þ 34 93 4024573.
E-mail addresses: [email protected] (J. Angulo), [email protected] (J. Calzada), [email protected] (A. Estruch).
1
On February 10th of 2000, the Radiocommunications Sector of the International Telecommunications Union (UIT-R) approved the revision of the
Recommendation UIT-R BT.1306, which recognises the viability of the standards A/53 of ATSC, DVB-T and ISDB. Our analysis does not consider the
Chinese standard, as it has not been implemented in Latin America.
0308-5961/$ - see front matter & 2011 Elsevier Ltd. All rights reserved.
doi:10.1016/j.telpol.2011.07.007
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The selection of TDT standards can be seen as an example of the more general problem of choosing between competing
technologies. Sometimes it is adequate to allow the market to choose the best technology and to facilitate competition
among standards in order to have lower prices. But when network externalities are important governments might want a
quick selection of one system (Farell & Shapiro, 1992). Indeed, markets can take too long to select the best standard and
this delay can distort the diffusion of products. Moreover, competition between standards can leave many users locked in
with incompatible systems. In order to avoid these problems, governments can force the coordination of firms or can even
directly choose the winning technology.
Competition is frequent in the development of new technologies.2 In the television market, Crane (1978) explains that
in the 1950s and 1960s the US and Europe competed to impose their respective analogue standards. The US developed the
National Television Systems Committee (NTSC) in 1954, which was later adopted by Japan and other countries in Latin
America. In Europe the French government presented the Séquentielle Couleur a Mémoire (SECAM), but as the royalties
imposed initially were very high Germany decided to create its own standard, called Phase Alternation by Line (PAL),
which was finally adopted in Europe and in a large part of the globe. This led France to negotiating the adoption of SECAM
in the former USSR and in several African countries in order to ensure its profitability (Fig. 1).
In some cases governments have tried to create a single international standard, although this is still quite exceptional.
In the US, the companies that won the second generation mobile telephony licenses were allowed to develop their own
standards. At one point up to four different technologies coexisted in the market. In Europe, by contrast, all winning
companies agreed to develop the GSM, and many authors consider that this situation explains the leading role of the EU in the
expansion of mobile telephony. In the case of third generation mobile telephony, the US tried to avoid this problem and put
pressure to create a set of global standards (CDMA2000), but the European Technical Standards Institute (ETSI) finally adopted
a slightly different standard for the EU (WCDMA), incompatible with the other international systems (Cabral & Salant, 2008;
Salant & Waverman, 1998).
The theoretical literature has analysed the reasons behind firms and governments for establishing harmonised standards,
and has assessed the consequences of this strategy. This paper adopts a different approach and studies the factors that have
influenced the selection of TDT international standards by Latin American countries, which have not developed their own
technology. The analysis suggests that while a small number of countries have adopted the standard that is best suited for
promoting their national audiovisual and electronic industries, others have been mostly influenced by the political and
commercial relationship with their neighbours, and by the possibility of benefiting from network externalities in
consumptions and scale economies in production. Indeed, in Latin America the discussion about the technical characteristics
of each TDT standard was only relevant in the first years of the selection process, before the leading countries of the region
made their selection.
More precisely, Latin American countries are divided into three groups. First, a group led by Brazil has chosen a
modified version of the Japanese standard. Brazil created a version of the ISDB-T as a strategy to develop its local
manufacturing industry, and after a long promotional process it has persuaded most of the continent to adopt it. Many
countries have adopted the Brazilian standard in order to gain network externalities and scale economies, but also because
of neighbouring and political considerations. Second, a small group of countries has adopted the North American standard.
The most prominent case of this group is Mexico, which has tried to benefit from its privileged access to the US market.
Only two other Central-American countries under the political influence of the US have followed its example. Finally, the
European standard, the most widely adopted in the world, has only been chosen by three countries, Colombia being the
biggest of them. Colombia has used a similar strategy to Brazil for supporting its national industry, but it has been less
influential in the region. In the next years it may even reconsider its decision and adopt the ISDB-TB.
The rest of this article is structured as follows. Section 2 explains how the three international TDT standards adopted in
Latin America were created, and describes their characteristics. Section 3 reviews the economic literature on standardisation, and identifies the main political and economic forces that might influence a country’s decision. Section 4 analyses the
selection of standards by Latin American governments. Finally, Section 5 summarises the conclusions.
2. Digitisation and the creation of global standards
This section presents the three international TDT standards that have been implemented in Latin America, explains
their origin and summarises their technical properties.
2.1. Advantages of digitisation
The digitisation of television signals has improved the image and service quality. The digital television signal is more robust
and allows for the correction of errors.3 As it is compressed, it requires less electromagnetic spectrum for its transmission than
2
For example, Cabral and Dezsö (2008) explain that in the production of videos, Sony introduced Betamax and JVC introduced VHS. Later, Sony
created Blue Ray and Toshiba has brought out HD DVD.
3
Digital signals are emitted like electromagnetic waves; they are as susceptible to interferences as analogue signals. But because they are encoded by
logical sequences, receptors can identify errors and correct them. This enables the reception of broadcasts with a quality superior to that of a DVD
(Suárez, 2009).
J. Angulo et al. / Telecommunications Policy 35 (2011) 773–787
775
Fig. 1. Analogue and digital television across the world.
Source: Wikipedia and authors’ elaboration.
the analogue signal: two high definition channels can be transmitted for each of the old analogue channels, or six to eight
channels of normal definition.
Digitisation allows viewers to watch television from anywhere using any device (e.g. mobile phones), and reception
devices can have several decoders to access several platforms (satellite and terrestrial). It also offers interactive services
complementary to television and facilitates conditional access to premium content, because operators can exclude
consumers from the service or control its use. Finally, digitisation gives new options to consumers, such as recording a
different channel than the one being watched, and viewing and recording two programmes at the same time.
The switch from analogue to digital television requires the adaptation, renewal and expansion of broadcast
infrastructures and equipments, which favours the electronic industry. For example, television sets manufacturers have
taken advantage of the analogue switch-off to replace CRT (cathode ray tube) technology by flat panel displays with LCD
(Liquid Crystal Display) technology or plasma. Indeed, the renewal of televisions sets has been one of the catalysts of
viewers’ migration from analogue to digital television (Suárez, 2009).
Finally, digitisation might be useful to reduce the digital divide, because TDT offers advanced information services to
population segments and regions that do not have easy Internet access. The increase in the number of television channels
generated by TDT can diversify the sources of opinion and information available for the population.
2.2. The birth of global standards
The standard Advanced Television Systems Committee (ATSC) appeared in US in 1993 to replace the National Television
Systems Committee (NTSC). This was the US industrial answer to the attempt by Japan to establish a global standard for
high definition analogue television (Garcı́a Leiva & Starks, 2009; Hart, 2004, 2009).4 The Federal Communications
4
Initially, the US developed a hybrid (partly analogue, partly digital) system of television, but in 1997 FCC selected an all-digital one. See
The Economist, 26 February, 1994.
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Commission (FCC) commissioned the Grand Alliance (GA), a consortium of electronic and telecommunication firms created
in 1982, to develop a new standard.5
The ATSC was approved by the FCC in 1997, but it did not enjoy consensus. Internal disputes at GA about important
technical aspects such as the modulation system have slowed down the development of ATSC and have forced the FCC to
play an active role in its development. Many of FCC interventions have not been very effective to monitor the firms.
According to Galperin (2002, p. 13), ‘‘for more than a decade, policymakers have attempted to direct a complex overhaul of
the broadcasting industry without the policy instruments (and, in many cases, the incentives) for doing so.’’
At present, the ATSC has been implemented in the US, Canada, El Salvador, Honduras, Mexico and South Korea. In the
US the analogue switch off date was postponed several times and finally was fixed for June 2009.
The US launch of the ATSC forced both Europe and Japan to re-examine their previous policies on HDTV. During 1980s the
European strategy for developing the high definition analogue television was the creation of the satellite system MAC. The
project did not succeed due to the lack of coordination between operators and generated great losses for several European
manufacturers. This may explain why some firms like Philips and Thomson that were working in the European project also
participated in one of the four GA consortiums that competed in the US for defining the digital television system.
After the MAC project was dropped in 1993 the European audiovisual television industry rejected the interventionist
approach of the EU and opted for a technological development strategy based on market criteria. In spite of this, the EU
Council of Ministers approved an Action Plan for introducing widescreen analogue equipment in the near term and digital
HDTV in the long term. A subsidy programme was established and several actions were taken to promote digital television
and subsidise the production of programs in middle screen formats. The EU created strong incentives to help companies to
switch to digital technology, but it gave a great deal of autonomy to the member states to regulate the transition.
The institution in charge of developing the digital television standards in Europe was the Digital Video Broadcasting
(DVB) Group, a consortium created in 1993 that was made up of 80 members of the European industry, such as public
agencies, audiovisual equipment manufacturers and broadcasters. The DVB Group focussed on negotiating standards for
digital video production, terrestrial, cable and satellite broadcastings, and set-top-boxes and encryption systems for pay-tv.
Hart (1998, p. 218) explains that one of their goals was ‘‘to avoid the proliferation of incompatible pay-tv decoders and settop-boxes. The DVB itself was no empowered to set standards but instead passed along technical specifications to ETSI (the
European Telecommunications Standards Institute) and CENELEC (the European Committee for Electrotechnical Standardization), both of which are recognised standards organisations in Europe.’’
The new European TDT standard was approved in 1997, after the launch of the satellite and cable television standards.
The DVB project also promoted the formation of a patent pool for all DVB standards (except for MPEG-2). This was a
notable difference with respect to the GA in the US, who failed to agree on a patent pooling management (Hart, 2004).
However, the European consortium also had many coordination problems, such as in defining the conditional access
system (Cave, 1997; Galperin, 2002).
Currently, the DVB Group has more than 270 institutions and companies throughout the world. Their standard covers
all of Europe, Turkey, Russia, Saudi Arabia, Iran, most of the northern and southern African countries, in addition to some
isolated countries from equatorial Africa and India and the rest of South East Asia, all of Oceania and some countries in
South America. The DVB is the most extensive standard in the world and it generates significant economies of scale for
equipment manufacturers.
In 2005 the EU suggested a coordinated analogue switch-off for 2012, although the final deadline was left to the member
States (European Commission, 2004; Garcı́a Leiva, Starks, & Tambini, 2006). As a consequence, the introduction of the TDT in
Europe has followed an uneven path. In 1997, digital television was launched for the first time in Europe in France, the
Benelux and the Scandinavian countries. The first city to complete the switch-off was Berlin in 2003 and the first countries
were Luxemburg and The Netherlands in 2006; currently there are still several countries that have not completed the process
(Table 1).
The creation of the Japanese standard Integrated Services Digital Broadcasting-Terrestrial (ISDB-T) might also be
considered as a reaction to the US initiative. For decades Japan used the American analogue standard NTSC, but in the
1980s it created the first global standard for HDTV, which was presented before the International Telecommunications
Union (ITU) in 1986. The European countries and the US convinced the ITU to delay the approval of this standard until
1990, giving an opportunity for their national firms to develop a digital television standard. For some years, both NHK and
the electronics companies push ahead with HDTV (MUSE Hi-Vision). However, the introduction of this new technology
was very slow, due to the high price of widescreen television sets and the scarcity of high quality programming.
Finally, the Japanese government decided to abandon the Hi-Vision, a hybrid of both digital and analogue technologies,
to speed up the transition to an all-digital HDTV system.6 The objective was to favour the national television and
telecommunications industry, as well as freeing up part of the electromagnetic spectrum used by television (Garcı́a Leiva &
Starks, 2009; Hart, 2004).
5
The GA partners where AT&T, General Instrument, Philips, Thomson, Zenith, David Sarnoff Research Centre and the Massachusetts Institute of
Technology.
6
MUSE was created in Japan by the public television operator NHK. Hart (2004) explains that NHK initially resisted the idea of abandoning MUSE,
but some of the major electronic manufacturers and the Ministry of Posts and Telecommunications wanted to speed up the transition to an all-digital
HDTV system. In 1997, all the top managers of NHK were replaced with individuals more inclined to go digital.
J. Angulo et al. / Telecommunications Policy 35 (2011) 773–787
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Table 1
Implementation of the TDT in Europe.
Source: Impulsa TDT.
Country
Total switch off
Luxemburg
The Netherlands
Finland
Andorra
Sweden
Switzerland
Belgium
Germany
Austria
Denmark
Norway
Croatia
Slovenia
Spain
Estonia
Israel
Malta
Czech Republic
France
Greece
Hungary
Italy
United Kingdom
1/9/06
11/12/06
1/9/07
25/9/07
15/12/07
26/11/07
2010
2010
2010
1/11/09
1/12/09
2010
2010
3/4/10
1/7/10
31/12/10
2010
30/9/10
30/11/11
2012
2010–13
2012
2012
The Integrated Systems Digital Broadcasting (ISDB-T) was developed by the Association of Radio Industries and
Business (ARIB), which was founded in 1995 by the Ministry of Posts and Telecommunications, and unites many
telecommunications, radio broadcasting and radio equipment companies, as well as electricity and gas suppliers, banks,
etc. In 1997 several broadcasting companies and manufacturers founded the Digital Broadcasting Experts Group (DiBEG)
with the aim to promote the ISDB-T digital television system around the world.
Japan began broadcasting using TDT in December 2003, and their switch off date is programmed for 24 July 2011. As it
is shown below, the ISDB-T has been adopted, with significant modifications, by Argentina, Brazil, Chile, Costa Rica,
Ecuador, Peru and Venezuela, and other Latin American countries are now considering its adoption.
2.3. Comparison of the technical characteristics of the various standards
Governments assess the adequacy of standards by considering several aspects: quality offered to the viewers; flexibility
to adapt to other configurations, possible applications and business models; costs and availability of the equipment; and
potential for updates.
It is usually considered that the ATSC adjusts well to the business requirements of the US market. First, its modulation
technique reaches rural areas with low population density. On the other hand, US viewers have been enjoying a large
number of channels for years due to their strong cable television network system. Being aware of this situation, the ATSC
opted for improving image definition as much as possible instead of increasing the number of channels on offer.7
By contrast, one of the main features of the DVB-T standard is that it increases the number of channels and services
available. The DVB-T has made it a priority to utilise the electromagnetic spectrum previously used by analogue television
to offer additional channels (instead of high definition) as well as mobile broadband access to Internet. The DVB-T uses
8 MHz channels, like PAL. But whereas PAL allowed the broadcast of one programme, DVB-T broadcasts four. In some
countries of Latin America and in Taiwan and Australia the bandwidth is 6 MHz. For these cases the version DVB-T2
increases the efficiency of the radio-electrical spectrum between 30% and 50%.
Another achievement of the DVB system is that it has set the standards for digital television for satellite (DVB-S and
DVB-S2), cable (DVB-C and DVB-C2) and terrestrial, either by landline (DVB-T and DVB-T2) or mobile (DVB-H) access.
It also has standards for conditional access (DVB-CSA and DVB-CI) and middleware for interactive applications (DVB-MHP).
This coordinated development has undoubtedly facilitated the expansion of this technology. The ISDB also has versions for
satellite, cable and mobiles. In the US, by contrast, standards for cable and satellite were left to the industry associations, as
well to the computer and telecommunications firms, who were interested in delivering television over internet. The result
has been very unsatisfactory for equipment manufacturers and television operators. Thus, for example, they have doubts
about which image format in the ATSC system they should use.
7
National broadcasting networks pressured to enable multicasting of less than high definition video on digital channels. One of the reasons of the
existence of many image formats for ATSC is that broadcasters could not agree on whether it was on their own interest to move to high definition video.
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Although the ISDB-T is similar to the European standard, it divides the bandwidth for each channel in thirteen
segments, reserving one segment (1-seg) to transmit the television signal to mobile phones. The advantage of this system
is that broadcasts can be received for free on mobile phones, as the only segment decoded is that aimed at mobiles
(Pontificia Universidad Católica de Chile, 2006). In the case of DVB-H, the European standard for mobiles, the broadcasting
equipment is different than the one used for DVB-T, and it is unlikely that it will offer free access to television in the
short term.
Finally, it is important to mention that studies carried out in several Latin American countries have shown that the
ISDB-T is the system that offers viewers better quality, although the difference between the three international standards
is small. The price of analogue-digital decoders is lower for the DVB standard, but again the differences with other systems
are not significant, and the price differences for integrated television sets are very small. These conclusions suggest that
equipment prices and the quality should not be a deciding factor in the selection of standards. Besides, competition is
forcing all standards to remain in a continuous state of upgrade, which favours the convergence in the quality and
applications offered.
3. Factors that determine the selection of standards
This section establishes a theoretical framework that will be later used for analysing the standards selection process
carried out by Latin American governments. First, it revises the main contributions of the economic literature about the
strategies employed by governments and firms to select standards. Afterwards, it identifies the main factors that have
influenced the adoption of TDT standards in Latin America.
3.1. Main insights from the economic literature
After the publication of the seminal papers on standardisation and technological choice in the mid-1980s by Katz and
Shapiro (1985), Farrell and Saloner (1985) and Arthur (1989), several authors have analysed which strategies are most
suited to adopt a standard.8 Farrell and Saloner (1985) and Berg (1988) show that the existence of incompatible standards
divides the population and reduces network externalities and economies of scale. Nevertheless, they explain that this can
be compensated when adopters have different preferences about the products.
Some recent research has considered whether it is preferable to leave to the market the selection of technological
standards or if it is better to create institutions that speed up the negotiation process between companies and public
institutions. Choi (1994) analyses how long it is convenient to wait to choose a standard in the presence of network
externalities when the technology can improve with time. He suggests that first consumers choosing a standard can later
on find themselves locked-in with an inefficient technology if their decisions are not taken into account by subsequent
consumers. In fact, he shows that when users decide about a standard in succession, the first ones adopt the standard too
quickly compared to what would be the optimum time. In a different paper, Choi (1996) compares the benefits of having a
standardisation agency which makes an early decision about a standard with the benefits of allowing several technologies
to compete for a longer period of time. In this model the main benefit of a rapid standardisation is the reduction in
uncertainty about the quality of the standard. However, some recent articles, like Cabral and Salant (2008) point out that
prolonging competition between standards can result in technological improvements that compensate for the uncertainty
costs. This could be the case of the TDT implementation in Latin America, where the delays in the selection of the
standards has favoured the adaptation of the three international standards to the technical and socio-economic needs of
the countries. In spite of this, these delays have also prevented reallocating part of the electromagnetic spectrum used for
analogue television to other activities such as mobile broadband services.9
Cabral and Dezsö (2008) explain that for a company or government that has to choose a standard, the existence of several
designs implies two trade-offs. On the one hand, there is a static trade-off, because delaying the selection of a standard
enhances the technology thanks to competition, but it also increases the price of the winning standard because some
competitors are eliminated. On the other hand, there is a dynamic trade-off, because the rapid adoption of a technology allows
taking advantage of network externalities and economies of scale, but less time is left to obtain information about the technical
features and the development possibilities of each technology. Taking this into account, these authors analyse how long the
potential adopters should wait before making a decision, and they show that in balance consumers choose the standard earlier
than what will be socially desirable for fear of an increase in the price of the winning standard. However, when more than two
designs are competing, as it occurs with the TDT standards in Latin America, waiting might be convenient because this
increases the probability of an innovation and at the same time competition among winners avoids price increases.
An aspect that has received scarce attention by the literature is the role that should play governments in the definition
of standards. Governments can force the adoption of a standard by using different policies, like direct subsidies (HDTV in
Japan), market regulations (mobile in Europe) or direct interventions in the market when the government itself is a big
8
For a literature review see Katz and Shapiro (1994), Farrell and Klemperer (2007), and Stango (2004).
The spectrum that is freed up in the switchover from analogue to digital television is known as the digital dividend. This spectrum is especially
adequate for providing mobile communications. In fact, in 2010 and 2011 some European countries such as Germany and Netherlands used auctions to
allocate this spectrum to mobile operators.
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consumer. Farrell and Shapiro (1992) explain that in the case of HDTV the selection of one standard may favour the
creation of a larger number of television programmes. They conclude that when network externalities are important, the
FCC should select the standard when the loss of efficiency due to the creation of a monopoly equals the social benefits
brought about by the innovation.
Cabral and Kretschemer (2004) is one of the few papers that have studied the political process for establishing the
standards. The authors use a dynamic model in which the policy maker initially has little information about which standard is
preferred by consumers. The politician’s patience determines if he will choose the most developed standard quickly, therefore
knocking out the competition, or if he will wait to see how the standards evolve and what consumer preferences are. The
politician’s decision will depend on his expectations about the standard’s life-cycle: if the standard is expected to have a long
life-cycle, the politician will think that the costs of a bad decision are high and will decide to wait and find out how the
technology evolves over time. On the other hand, if he expects that the life-cycle of the standard will be short, he will consider
that the cost of ruling out the competition between standards is low and will make a quicker decision. Notice that this
conclusion has a practical implication for Latin American countries, since most of them have selected the TDT standard after
observing the technical evolution of international standards and the choice made by their neighbours.
Very few studies have analysed non-market oriented selection of standards.10 Farrell (1996) and Stango (2004)
distinguish between de facto and de jure standards. The former are the result of a war of standards, the latter are the result
of a consensus in the industry, which can be tacit or can be formalized by a standardisation agency. These agencies decide
on the standard to be adopted, resolve company disputes and reduce users’ uncertainty with regards to quality. On many
occasions, the selection of a standard requires a long time because the difference between the benefits of the winners and
the losers is too big. In this context, a standardisation agency can moderate these differences and facilitate the
coordination among firms (Farrell, 1996). Farrell and Saloner (1988) suggest that institutions may establish standards
better than the market itself, though they require more time to solve conflicts between technologies. For this reason they
propose a mixed system: the threat of an alternative coordination system incentives reaching an agreement.11
3.2. Factors that have influenced the selection of standards in Latin America
The main part of the papers reviewed above analyzes the convenience of choosing one single standard and the
appropriate timing for doing it. However, very few have been said by the literature on how governments select standards
in practice among all available choices. Next, some of the most important factors that have influenced the choice of TDT
standards by Latin American countries are identified.
Technical and socio-economic features: The three TDT international standards have some technical particularities that
make them more appropriate for certain contexts. Governments may want to improve the quality of the television signal or
increase the number of channels; they may want to facilitate free access or conditional access on mobile phones; they may
want to extend coverage to peripheral areas or focus on the urban demand. Several countries in Latin America have assessed
the quality attributes of the three standards in different geographical environments, showing that the Japanese option is in
general better.12 It is also important to mention that the countries interested in promoting a standard usually offer several
types of socio-economic cooperation and technical assistance to potential adopters in order to influence their decision.
Network externalities and scale economies: When a standard is the most widely used, one country can choose it even if it
less efficient. In a theoretical paper, Arthur (1989) shows that the first adopter choosing a standard can end up locked-in
with a design of low quality and later adopters may not correct this decision and select the same standard. This situation
can occur when network externalities in consumption and scale economies in production are so significant that they
compensate for the different preferences new consumers may have. More in general, the decision of the first group of
adopters and historical conflicts may be essential for the selection of one system. The experience of Latin America shows
that network externalities and scale economies generated by the ISDB-Tb in the region might have influenced the decision
of many governments. Indeed, although the DVB is the more widespread TDT system in the world, many countries have
selected the ISDB-T after its adoption by Brazil and other leading countries in the continent.
Industrial policy: Some Latin American countries have considered that the transition from analogue to digital television
is an opportunity to develop their electronic and audiovisual industry. As Galperin (2006) indicates, the acquisition of
technological knowledge and the advantages of being the first to enter the industry can incentivate the manufacture of
electronic equipment, television sets and other related activities. In Latin America, the two major producers of television
sets and electronic equipments, Mexico and Brazil, have adopted different standards, the ATSC and the ISDB-T,
respectively. Colombia, another country in the region that considers the television industry as strategic, has chosen the
DVB standard. Indeed, Colombian authorities consider that the TDT offers an excellent opportunity to strengthen its
national contents and cultural industry, because new television channels will require more and new contents.13
10
For a detailed analysis of standardisation agencies see David and Shurmer (1996).
Farrell and Simcoe (2009) analyse the establishment of consensual standards when agents have private information and there is the possibility of
a free-rider problem.
12
See for example, Chile, Peru and Brazil case studies. In Colombia, the DVB was considered to have the highest value.
13
For the National Television Commission it is urgent ‘‘to develop our cultural industry and the production of digital contents’’, and it is very
important ‘‘to stimulate the production and international circulation of high quality contents’’ and ‘‘to promote the distribution in national and
11
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Neighbouring and political integration: Countries can adopt a particular standard to reinforce their commercial,
economic, and political relationship with other countries. The selection of a standard implies a long term commitment
with the promoters of the standard and with other adopters. In the EU, the coordinated introduction of the DVB-T has
facilitated the creation of an integrated television market in the continent and has eliminated the division generated in the
past by the co-existence of the analogue SECAM and PAL systems. Political integration has been less influential in Latin
America. In the first years of the selection process of the TDT standards the member States of Mercosur and Unasur
scarcely coordinate themselves for adopting a common technology.14 It was after Brazil launched the ISDB-Tb in 2006
when this country made important efforts to extent its standard to other countries. Now that the ISDB-Tb has been widely
adopted in the region, Mercosur has began to coordinate its implementation.
4. The standards selection process in Latin America
The factors that have influenced the selection of TDT standards in Latin American are divers, but for many governments
the choice of the continent’s leading countries has been determinant. The most remarkable example of this situation is
Brazil, who opted for the ISDB-T system and whose choice has been followed by almost all South American countries. The
influence of the US is also important and has made Mexico and two Central-America countries chose the ATSC standard.
Finally, only three countries have adopted the DVB standard, persuaded by the subsidies and the cooperation offered by
the EU (Table 2).
4.1. Brazil, the leader in the expansion of the Japanese system
The case of Brazil is interesting for two reasons. First, because it has selected the Japanese system and has modified it in
order to create its own standard. And second because of its leadership position in Latin America.
The selection of the standards in this country was initiated in 1994 but received more attention during the presidency
of Lula da Silva.15 In order to give participation to all industry players in 2003 the Ministry of Communications created the
Sistema Brasilero de Televisión Digital (SBTVD), who had the mission of recommending a standard. The new standard was
expected to promote interactivity and applications for entertainment, education, culture and citizenship; have a low cost
in order to allow widespread access; be able to offer several businesses opportunities; help to modernise the industry; and
allow the participation of other countries in its development. Moreover, one of the objectives announced by Brazil was to
spread the use of its own standard across the continent, with the aim of becoming the supplier of television decoders and
generate a trade surplus with its neighbours.16
After a careful analysis of the Japanese and the Chinese standards, the selection of the ISDB was announced in 2006.
Previous studies had positively valued the ISDB for two basic reasons: good reception indoors – a key aspect in Brazil
where almost half the homes have only internal aerials – and free reception of mobile signal.17 Moreover, a key factor for
choosing the ISDB was that Japan allowed an important modification of its standard to be made. The Brazilian version
replaced the compression algorithm MPEG-2 by MPEG-4, which has better image and sound quality and a similar price for
the converter. The software, Ginga Middleware, was substituted by a new one developed by Brazilian universities –
surprisingly with the help of the EU – permitting to attain the SBTVD objectives, like social inclusion and distance learning.
These changes render the Japanese television sets useless in Brazil and favour the development of the local
manufacturing industry, which will serve an internal market of 57 millions sets.18 It is therefore easy to understand
why Brazil has made a great effort to promote the ISDB-Tb – its version of the ISDB – in Latin America. This version has
been chosen by Argentina, Costa Rica, Chile, Paraguay, Peru and Venezuela, and could soon be adopted by Bolivia and the
Portuguese-speaking countries in Africa. The Brazilian authorities have also expressed their intention to persuade
Colombia and Uruguay (countries that have selected the European standard) to review their positions.
Other determining factors for Brazil’s decision were the fact that Japan offered a partial exemption of royalties for the
ISDB, that allowed Brazil to participate in the development of the system, and that it promised to install microprocessor
factories in Brazil and to financially support the transition from the PAL-M to the ISDB-Tb system. These agreements,
(footnote continued)
international markets of high quality contents.’’ See the position of the Commission. Retrieved from: http://www.cntv.org.co/cntv_bop/noticias/2010/
octubre/27_10_10a.html.
14
Very few actions have been taken by Mercosur to harmonise the selection of the TDT standard. In 2001, the Working Group SGT No1
‘‘Comunicaciones’’ of Mercosur established the need of analysing the economic and technical aspects of the existing TDT standards in the world. On
September 2008 Mercosur created the Programa Mercosur Audiovisual, with the objective of harmonising the legislation in the region and promoting the
trade of audiovisual contents. On March 2011, the Secretaria del Mercosur organised a meeting to promote the coordinated implementation of the TDT.
15
The Sociedad de Ingenierı́a de Televisión (Television and Engineering Association), the Asociación Brasilera de Emisores de Radio y Televisión
(Brazilian Association of Radio and Television Broadcasters) and the Universidad Mackenzie of Sao Paulo carried out the first studies.
16
Ministry of Communications, Brazil. Exposic- a~ o de motivos do decreto que institui o Sistema Brasileiro de TV Digital, 2003. Retrieved from:http://
www.mc.gov.br/tv-digital/exposicao-de-motivos-do-decreto-que-institui-o.
17
SET-ABERT Group, Brazilian Digital Television Tests, 2000. Retrieved from:http://www.set.com.br/artigos/nab.pps.
18
Brazil focuses the production of receptors in Manaus, which consists of 17 different industrial sectors (nearly 400 firms, 228 of which are of foreign
capital). The total annual revenue generated in 2005 was of US$ 18.9 billion (Figueiredo, 2008). Also notice that Brazil exports a big amount of its
electronic production to countries in Latin America, Europe, and Asia. See Galperin (2004).
J. Angulo et al. / Telecommunications Policy 35 (2011) 773–787
781
Table 2
Factors that have influenced the selection of standards in Latin America.
TDT Standard
ISDB
Brazil (2006)
Peru (2007)
Argentina (2009)
Chile (2009)
Venezuela (2009)
Ecuador (2010)
Costa Rica (2010)
Paraguay (2010)
DVB
Uruguay (2007)
Colombia (2008)
Panama (2009)
ATSC
Mexico (2004)
Honduras (2007)
El Salvador (2009)
Technical properties
and economic
cooperation
Network externalities
and economies of scale
Industrial policy
Neighbouring and
political integration
Most adopters such as
Brazil, Peru and Chile
have presented technical
reports that conclude
that this is overall the
best standard
After its adoption by
Brazil, Peru, Argentina
and Chile, this is the most
widely used standard in
Latin America
The selection of this
standard by Brazil was
influenced by the
possibility of developing
its own version of the
ISDB-T. Other countries
like Argentina might also
benefit of this strategy
The adoption of this
standard by most of the
region’s countries
reinforces Mercosur and
Unasur. Brazil has been
very active in promoting
its standard in other
countries
Adopters have
considered the economic
and technological
cooperation offered by
the standard’s promoters,
specially by some EU
countries
DVB is at present the
standard with the widest
implementation in the
world
Local electronic firms in
Colombia have shown
interest in manufacturing
DVB products. Uruguay’s
software industry could
benefit of the expansion
of this standard
The three adopters of this
standard in Latin America
have not reached any
cooperation agreement
among themselves
No significant advantages
for this standard have
been identified in
technical reports. But
adopters are highly
dependent of the US’s
technology
This is the standard
adopted by NAFTA’s
members
The electronic industry in
the North of Mexico
exports a significant part
of its production to the
US
Mexico participates in the
North American Free Trade
Agreement (NAFTA) and El
Salvador and Honduras in
the Dominican RepublicCentral America Free Trade
Agreement (DR-CAFTA)
together with the possibility of exporting the TDT adaptors to the entire region, allowed Brazil to fulfil one of its objectives
of reducing the commercial deficit of its electronic industry, which in 2003 was US$ 2.38 billion.19
Some critics have pointed out that the Brazilian decision was very much influenced by the pressures from its electronics
industry (Merino, 2008) and the main media conglomerate in the country, the Red O Globo, which has important alliances with
Japanese companies (López de Souza & Lima de Souza, 2009; Santana, 2009).20 In spite of this, the electronic industry did not
express its official support to any of the standards: the Vice-President of Eletros, one of the main associations of equipment
producers, announced the neutrality of the association regarding the selection of the standard, and emphasised that their only
objective was that the promoters of the winning standard, whichever it was, offer to the country the production of the new
electronic components, transmitters and television sets. Eletros completely rejected the possibility that Brazil became a net
importer of electronic products.21 When the president of Eletros presented to ANATEL its report about the TDT he said that: ‘‘there
is no rush for choosing the standard, and we do not have any preference for anyone; the only thing we want is a good decision’’.22
The Brazilian strategy is now facing several difficulties. The ISDB-Tb receptors are very expensive and must be supplied
by a local industry that is still not sufficiently developed. The new software, Ginga, also presents several deficiencies, and
its launch, which was expected for the beginning of 2009, has been delayed (Muniz, 2009). In addition, the Japanese
promise of installation of factories has not materialised either (UOL Economia, 2008). In spite of this, these problems have
not prevented many other countries in Latin America to adopt the ISDB-Tb.
Peru was the second country to join the ISDB-Tb system. The process started at the beginning of 2007 with the creation
of the Comisión Multisectorial (Multisectorial Commission). After carrying out trials for all international standards in Lima
(urban area), Iquitos (jungle) and Cuzco (Andes), in February 2009 the Commission issued its assessment of the standards
taking into account several aspects.23 Regarding the technical features of the four standards analysed, the Commission
concluded that they were all very similar, but that the ISDB-T was superior in terms of quality of audio and video. On the
other hand, the economic assessment defined 12 scenarios taking into account different levels of heterogeneity of the
19
CMI Brasil, SBTVD Um desafio brasileiro, 17/07/2005. Retrieved from:http://www.midiaindependente.org/pt/blue/2005/07/323228.shtml.
In fact, some have argued that Hélio Costa, the Ministry of Communications, was representing the interests of broadcasters, and specially those of
the Organizac- oes Globo (Intervozes, 2006, p. 9), because he was a former executive of the Red O Globo (Santos, 2006, p. 209).
21
Retrieved from http://www.estadao.com.br/arquivo/tecnologia/2002/not20020315p62987.htm.
22
See the press release of ANATEL. Retrieved from: http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublica
cao=26383&assuntoPublicacao=Eletros%20apresenta%20%E0%20Anatel%20na%20pr%F3xima%20semana%20trabalho%20sobre%20tv%20digital&caminhoR
el=null&filtro=1&documentoPath=biblioteca/releases/2001/release_29_05_2001%285%29.pdf.
23
Informe Final de Recomendación del Estándar de Televisión Digital Terrestre. Interestingly, this law approves the adoption of the Japanese
standard (ISDB-T ) and not the Brazilian version (ISDB-Tb). Retrieved from: www.mtc.gob.pe/portal/tdt/inicio.html.
20
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J. Angulo et al. / Telecommunications Policy 35 (2011) 773–787
population and the possibility of developing high definition or standard definition qualities. In 11 of these scenarios the
ISDB-T was considered as a better option for consumers. Finally, the Commission analysed the cooperation proposals made
to the State by the promoters of each standard, taking into account several aspects such as the implementation process,
business opportunities, funding mechanisms and participation in international forums. In this case, the Commission
concluded that the DVB offered a more complete technical cooperation, followed by the ISDB-T.
Finally, in April 2009, after announcements from the Sociedad Nacional de Radio y Televisión and the Asociación
Nacional de Radio y Televisión, the government chose the ISDV-Tb standard, and announced that the analogue switch-off
was expected for 2015 for the 8 biggest cities and for 2023 for the rest of the country. Finally, in March of 2010 the digital
emission was initiated in Lima and Callao.
It is worth to emphasise that the decision of Peru was very influenced by the pressure exerted by Japan and Brazil
(Trejo, 2009). In an agreement signed in September 2009 the Brazilian government promised to contribute 500 million dollars
to facilitate the implementation of TDT by Peruvian companies.24 In addition, the Japanese government offered technical and
financial support, training and discounts for the purchase of equipment, worth between 15 and 20 million dollars.25
The case of Argentina is interesting because it has changed from the ATSC to the ISDB-Tb system. In 1998, during the
presidency of Carlos Menem, Argentina selected the ATSC standard. This decision was a consequence of the lobby exerted by
private television operators and of the traditional relationship of Argentina with the U.S. (Carboni, Núñez, & Murolo, 2010).26 It
also reflected the Argentinean aim of developing a high definition digital television with 6 MHz, the same bandwidth as the US.
The Argentinean choice was made official in October 1998 by the Resolución 2357/98 from the Secretarı́a de Comunicaciones.
When President De la Rúa rose to power in 1999, the adoption of the ATSC standard was questioned, and in May 2000 the
1998 resolution was annulled. At that time it was evident that the economic crisis of the country would knock out all hope of
competing with Brazil in the digital television market. A new process began to select the TDT standard, but ATSC was still
supported by LG-Zennith, JVC, Artear, Canal 13, Grupo America Multicanal, Cablevision y Canal 3 de Rosario, who offered the
creation of a plant for producing plasma and LCD television sets in Argentina, as well as education and development programs.
On the other hand, the consolidation of Telefonica as one of the main producers of television programs in Latin America
was a factor that made several TV stations to change their support from the ATSC to the DVB system (Hernández &
Postolski, 2003). A group of firms composed by Telecom, Telefónica-Telefé, Siemens, Nokia, Philips and DMT offered to
invest 100 million dollars if Argentina moved to the DVB system.
Finally, the standard ISDB-T was supported by NEC, Sony and Sanyo, who promised investments in software and
applications.27
The change in the strategy of the country was evidenced in 2005, when Argentina and Brazil subscribed to an
Agreement for the Cooperation in the Field of Terrestrial Digital Television (Acuerdo sobre Cooperación en el Área de la
Televisión Digital Terrestre). Finally, on 28 August 2009, during the Bariloche’s Unasur summit attended by Presidents
Cristina Fernández and Lula da Silva, Argentinean decision to adopt the Japanese system was made public. Japan
committed to transfer technology and personal capital to Argentina and to equip the public operator Canal 7 in order to
prepare it to broadcast digitally. Argentina and Brazil also agreed to work to expand the use of the standard in the region.28
The final decision of the government was based on a technical report elaborated by the Universidad Nacional de San
Martı́n that analysed the three international standards,29 and the approval of the Radiofusion Federal Committee
(COMFER). The Ministry of Federal Planning, Public Investment and Services explains on its website30 that the main
reason for choosing the ISDB-Tb standard is that it is the most modern, has scope for development (Argentina is integrated
in a technological Forum to discuss the system), is free (Japan does not charge royalties, which enables the manufacturers
of Tierra del Fuego and Cordoba to supply adaptors and television sets for the internal market as well as for export),
enables the broadcast of more channels per bandwidth and the reception of free broadcasts on mobile phones, creates
skilled jobs, supports the development of the national equipment industry, software and content, and is highly inclusive of
all homes. On the other hand, the abandon of the US standard and the adoption of an unified strategy with Brazil is
considered as a mechanism to strengthen the commercial and political union in South America.
In September 2009, a few months after the Peruvian and the Argentinean decisions, Chile joined the list of Latin
American countries that have selected the ISDB-Tb system. Some years earlier, the regulatory agency of the telecommunications sector (Subsecretaria de Telecomunicaciones, Subtel) commissioned to 7 national universities (Católica de Chile,
Católica de Valparaı́so, de Chile, de Conception, La Frontera, de Santiago, and Federico Santa Marı́a) the assessment of the
24
El Comercio, 19/09/2009, Brasil financiará con US$500 millones la TV digital en el Perú. Retrieved from: http://elcomercio.pe/impresa/notas/
brasil-financiara-us500-millones-tv-digital-peru/20090919/343996.
25
Retrieved from: http://www.isdbt.org.pe/joomla/index.php?option=com_content&view=article&id=75&Itemid=110&lang=es.
26
The Clarin Group, which has a dominant position in the cable market, was interested in the ATSC standard. Telecommunications operators were
more interested in the DVB, because it increases the number of channels, allows competition with cable operators and offers a better position to
negotiate the broadcasts through mobile phones (Glanz, 2008).
27
Retrieved from: http://www.lanacion.com.ar/870112-La-guerra-por-la-tv-digital.
28
Decree 1148/09 was published on 1 September to announce the creation of the Sistema Argentino de Televisión Digital Terrestre (SATVD-T), the
Argentinean system, based on the ISDB-Tb standard.
29
This document appeared 3 days before Cristina Fernández and Lula da Silva signed the agreement in Bariloche Summit. Resolution No. 4/2006 de
la Secretaria de Comunicaciones.
30
Retrieved from: http://www.minplan.gov.ar/html/tv_digital/c.php, consulted on14/04/2010.
J. Angulo et al. / Telecommunications Policy 35 (2011) 773–787
783
three international standards. These studies found that all standards could offer similar results regarding the quality of
reception, but considered that the ISDB-T was preferable, taking into account the geographical conditions of the country.
Moreover, they suggested that the prices of the decoders, the television sets and mobile phones, could be lower with the
ISDB-Tb standard, because they would be produced in the tax-free Brazilian area of Manaus.31 Moreover, the ISDB-Tb offered
a programme of economic and technical cooperation to help some unprofitable television operators to enter the market.
Taking all this into account, Subtel recommended the ISDB-Tb,32 and on September the 14th of 2009 President Bachelet
signed Decree 136, which chose the Brazilian standard. The Decree states that the decision was based on Chile’s geography,
reception quality, the variety of its technological applications and the prices for end users. But the Decree also explains
that the key aspect for choosing this standard is to share it with other countries in the subcontinent.33 Recall that in 2003
Chile signed the Free Trade Agreement (FTA) with the US and that some free-on-air television operators and the cable
operators were interested in the ATSC standard. But these arguments were not enough to influence the decision of the
government (Bello, 2009; Muñoz, 2009).
The next countries that announced the Japanese-Brazilian choice were Venezuela and Ecuador. Venezuela maintained
an ambiguous position for several years, toying with all the standards except the North American one.34 In July 2009
President Chávez stated that besides the Japanese system and its Brazilian version they were assessing the European and
Chinese standards. Chávez pointed out that the technological transfer would be a determining factor in the decision. The
government finally announced the agreement with Japan and Brazil, which was made official in October 2009. As
compensation, the Japanese government has financed training activities in Tokyo, attended by Venezuelan civil servants
and teachers. The Venezuelan government declared that on top of the technological advantages of TDT, the ISDB-Tb will be
useful for reinforcing social inclusion in the country.
On March the 26th of 2010 Ecuador signed the agreements with Japan and Brazil to adopt the ISDB-Tb system, with
Japan providing 100 million dollars in financial help to modernise television companies. Previously the Superintendencia
de Telecomunicaciones had drafted an in-depth report35 analysing the standards according to four criteria: socio-economic
impact (high score), international cooperation (high score), technical trials (medium score) and complexity of the display
process (low score). The ISDB-Tb system got the highest rating in the socio-economic criterium and the second in all the
others; the ATSC had the lowest score; and the Chinese and DVB standards were ranked very similarly.
The last countries to join the Japanese-Brazilian system have been Costa Rica and Paraguay. By the Presidential Decree
dated on May the 6th of 2010 Costa Rica took its decision. Prior to this, a technical commission consisting on several
ministries, universities and regulatory agencies conducted several trials with the three standards and recommended the
adoption of the ISDB-Tb. Finally, Paraguay joined the ISDB-Tb through the Decree 4483, the 1st of June of 2010, after a
recommendation of the telecommunications regulatory agency (CONATEL). One of the reasons expressed in this Decree for
adopting this standard was to increase the collaboration with the other countries in the region.
In summary, the ISDB-T was initially introduced in Latin America because several studies concluded that it is the best
technical and economic option. During the presidency of Lula da Silva, Brazil created the ISDB-Tb, a new version of the
Japanese system, because the government believed that it would help to develop its national electronic industry. In the
following years Bazil promoted its standard, and many countries adopted it in order to benefit from network externalities
and economies of scale. At present, the adoption of the ISDB-Tb is favouring the politic and economic integration in
Mercosur and Unasur. Indeed, although the selection of the TDT standard was initially not coordinated,36 these institutions
are now trying to organise the joint implementation and development of the ISDB-Tb.
4.2. The European standard in Latin America: Lack of coordination
Three Latin American countries have opted for the DVB system: Uruguay, in August 2007; Colombia, a year later; and
Panama, in May 2009. These countries do not share any sort of confluence. Not even Colombia and Panama, adjacent
countries, have reached any cooperation agreement.37
31
Pontificia Universidad Católica (2006) recommended the DVB-T.
Subsecretarı́a de Telecomunicaciones de Chile (2009), Decisión Norma de Televisión Digital Terrestre. Retrieved from: http://www.subtel.cl/
prontus_tvd/site/artic/20090914/asocfile/20090914093202/resumen_ejecutivo_relato_final.pdf. This document quotes several studies carried out in
Chile, Brazil and Peru that verify that the ISDB-Tb offers better reception for homes and for mobiles. It also admits that the equipment for this standard is
more expensive but it expresses the hope that the size of the market will bring prices down right away.
33
Retrieved from:http://www.subtel.cl/prontus_tvd/site/artic/20091019/asocfile/20091019091832/tvd_09d_0136.pdf.
34
See the statements from the Venezuelan Telecommunications and IT Minister, Jesse Chacón, in 2006. Retrieved from: http://www.alternativa
bolivariana.org/modules.php?name=News&file=article&sid=2428.
35
Report on the definition and implementation of terrestrial digital television in Ecuador. Retrieved from: http://www.supertel.gov.ec/pdf/
publicaciones/informe_tdt_,ar26_2010.pdf.
36
Hélio Costa, Minister of communications of Brazil, has explained why Brazil authorities initially chose the Japanese standard without coordinating
their decision with the other countries in the region. He has affirmed that the digital television was not very developed in Brazil and the country could
not wait for a coordination process with the rest of countries, which could have delayed the process several years. Retrieved from: http://www.ipslatam.
net/nota.asp?idnews=94755.
37
Luis Ferrari, President of the Comisión de Televisión Digital del Uruguay, declared that they must take advantage of the fact they are the only
country in Latin America to have adopted the DVB standard. Retrieved from: http://www.elmundo.es/elmundo/2008/07/31/comunicacion/1217495195.
html.
32
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Uruguay established its standard by Decree 315 of 2007. In August 2006 the Comisión Nacional de Televisión Digital
Terrestre Abierta (National Commission for Open Terrestrial Television) was created, made up of representatives of the
State, the radio broadcasting sector and information technologies, universities and consumers. The Decree does not mention
why the DVB system was chosen, but it refers to the negotiation between the government and representatives of the three
standards. It explains that several aspects of the standards were assessed such as the variety of contents that can be offered,
universalisation of terrestrial and mobile digital television, quality of service, efficiency in the use of the spectrum,
opportunities for developing a national technology and prospects for the audiovisual industry. Moreover, the Considerations
Sections of the Decree makes a reference to the ‘‘decisions already taken in many countries around the world’’ and to the
‘‘level of diffusion of the different standards and the scale economies and the potential associates of each norm.’’38
Other considerations were also formulated. The managers of television companies estimated that broadcasting in high
definition is very costly taking into account the resources of the local market. For this reason, they preferred a standard
that favoured multicasting (Kaplún, 2008). Another important factor was that these firms were already using the European
standard for cable television, and the technicians were familiarised with the technology.
Also important was Nokia’s offer to build a research centre for the development of the DVB technology, and the
installation of a technological pole for digital television interactive services. These offers were particularly convenient for
Uruguay, which is one of the main software producers in the region and has managed to export a significant part of its
production to Latin America.39 The prospect of receiving funding from the European Investment Bank was also
mentioned.40
In spite of this situation, some recent developments suggest that Uruguay’s decision may not be definitive. It has
recently come to light that Brazil is putting pressure on the government to reconsider its position.41 In particular, it has
been said that Brazil has made an offer of 40 million dollars that President Mújica might be considering.
Colombia’s decision was taken in August 2008 after a long period of technical, demographic, economic and social
studies42 that emphasised the importance of TV as a source of entertainment, especially amongst the least privileged
classes of society. This conclusion generated a strong economic argument for supporting the DVB, because it was assumed
that under this norm television operators would require fewer investments to broadcast their programmes, and decoders
for analogue television sets would be cheaper.43
The technical and financial support offered by the DVB consortium to the Colombian State was also important to
convince the government. Nokia offered to invest in research and development a percentage of each DVB terminal sold in
the country, and Phillips made a similar offer with the sales from its adaptors. In addition, the DVB consortium proposed
setting up a permanent cooperation and advice office in Colombia, and several EU countries offered technical cooperation.
Spain, for example, offered the creation of a national industry of microelectronics for the multimedia applications of digital
television, and the UK offered the cooperation with British universities.
In addition to these considerations, a key factor in the decision of Colombia was that the DVB could benefit of important
economies of scale in the production of decoders and television sets due to its presence in a large number of countries.
Moreover, at some point the authorities thought that Colombia could lead the introduction of the DVB technology in Latin
America. In this sense, some local electronic firms have showed interest in manufacturing DVB products, especially settop-boxes, some prototypes of which have already been produced.
Nowadays, however, the authorities are afraid that their decision may leave the country in an isolated position. Local
firms are still uncertain of which will be the standard finally adopted, because Brazil is lobbying Colombia to turn to the
ISDB-Tb. The government is also pressing the European authorities to initiate the cooperation actions they promised to
facilitate the development of the TDT in Colombia, which are valued at 50 million euros.
Finally, Panama made its DVB choice official by the Executive Decree 96 on May 12th of 2009, and started its TDT
broadcasts on December 10th with the Sistema Estatal de Radio y Televisión (SERTV CANAL 11). The analogue switch-off
date is scheduled for 2020.
38
Ministerio de Industria. Energı́a y Minerı́a. Decreto 315/2007 del 27 de agosto: Televisión Digital Terrestre. Se seleccionan las normas DVB-T y
DVB-H para su implantación en nuestro paı́s. Considerandos II y III. Retrieved from: http://www.elderechodigital.com.uy/acceso1/legisla/decretos/
d0700315.html.
39
The production of software in Latin America has growth significantly in the last decade, especially in some cities of México (México DF, Monterrey,
Guadalajara, Ciudad Juárez), Brazil (Rio de Janeiro, Sao Paolo, Curitiba, Brasilia) and Argentina (Buenos Aires). In addition, Uruguay (Montevideo) and
Costa Rica (San José) have managed to create a software industry that is quite important in relation to the size of the country (González & Pittaluga, 2007;
Snoeck, Casacuberta, Domingo, Pastoru, & Pittaluga, 2007). In Uruguay, the exports of software were of 219 millions dollars in 2008 (3.5% of total exports)
and the total production was 550 millions (SELA, 2009). The reports of CUTI (Cámara Uruguaya de Tecnologı́as de la Información) show that the sector
has kept growing in 2009 and 2010.
40
See Leandro Piñeiro (2007), Por qué Uruguay se definió por la norma europea. CanalAR. September 10, 2007. Retrieved from: http://www.canal-ar.
com.ar/Noticias/NoticiaMuestra.asp?Id=4893.
41
Retrieved from: http://www.prnoticias.com/index.php/prlatam/948/10053746.
42
The national regulatory agency of the television sector (Comision Nacional de Televisión) presented a document that details the technical and
market studies that assessed the three standards. Retrieved from: http://www.cntv.org.co/cntv_bop/tdt/documentos/tdt_colombia.pdf.
43
With regards to reception on mobile phones, an aspect in which the ISDB-T has clear advantages, the regulator established that all free-on-air
television should supply a free service using the DVB-H standard. See El Espectador, 28/08/2008, Colombia adopta el estándar europeo para la TV digital
terrestre.
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The government of Panama based its decision on the report by the Comisión Técnica Nacional (National Technical
Commission) created in 2007 and consisting of twenty five experts. The Commission studied the technical, social and
economic implications of all the standards. After the report, the DVB was deemed to offer the most flexibility to radio and
television stations and to be the norm that offers more television channels.
All in all, the analysis of these experiences shows that DVB’s adopters made an early decision based mainly on technical
considerations, and on the promises of economic cooperation by EU countries. However, this standard has not expanded to
other Latin American countries and DVB’s adopters may end up in an isolated position. Moreover, the political objective
of participating in the commercial and political integration of the region might also force DVB’s adopters to reconsider
their decision.
4.3. The US influence in Latin America
At the time of writing these lines, only three Latin American countries have chosen the ATSC standard: Mexico,
Honduras and El Salvador.44
In 2004 Mexico approved the adoption of the ATSC standard45, and on September 2010 the president Felipe Calderon
announced that the analogue switch-off will be at 2015 and that the government will create a programme to facilitate the
access to all consumers to new television sets and decoders.
Two technical advantages were mentioned in favour of ATSC: the possibility of broadcasting in high definition on a 6
MHz channel and the efficiency of the transmission, which enables greater coverage whilst transmitting with less power.
But the real motivation for Mexico’s decision has more to do with industrial reasons and the business interests of the
audiovisual sector. Mexicos membership in the North American Free Trade Agreement (NAFTA) has allowed it to develop a
strong consumer electronics industry in the North, an industry that thanks to its low labour costs exports a significant part
of its production to the US (Galperin, 2006; Gómez-Garcı́a, 2006). Moreover, the Mexican audiovisual industry is highly
dependent of the technological developments of US. Indeed, there is a huge number of viewers of Mexican television
operators north of the border with the US. In this situation, it would have been very costly for Mexican broadcasters to use
a different standard than the ATSC.
The benefits for the audiovisual industry of the government’s decision are evident, because after choosing the ATSC
incumbent television operators received additional spectrum in order to broadcast in high definition. This measure
maintains the status quo of Televisa and Azteca TV , which now hold most of the concessions in the Mexican market. This
is why it is thought that in Mexico digital television will not bring more choices, only high definition (Trejo, 2009; Wong,
2004). Some Mexican political parties have denounced this situation in front to the high tribunals of the country (Suprema
Corte de Justicia de la Nación).
On January 9th of 2007 the Comisión Nacional de Telecomunicaciones de Honduras (National Telecommunications
Commission of Honduras, CONATEL) approved the adoption of the ATSC. This decision was justified because ATSC offers
broadcasting on a bandwidth of 6 MHz, maximum coverage with minimum costs, better prices for receivers and decoders,
better image quality, the capacity to broadcast beyond national borders and the potential for new services and
applications. On top of this, CONATEL adduced that a key factor for its decision was that a month before its decision
a group of Central American television companies encouraged the respective national authorities to opt for the ATSC
standard.
Lastly, the telecommunications regulatory agency of El Salvador (Superintendencia General de Electricidad y
Telecomunicaciones, SIGET) opted for version 2.0 of the ATSC standard in April 2009. Although the analogue switch-off
is scheduled for 2018, there are already four channels broadcasting in digital format.
The decision of this country was based on the report by the Comisión Técnica Regional de Telecomunicaciones en
Centroamérica (Technical Commission for Telecommunications in Central America, COMTELCA).46 This document
considers that there are no relevant technological differences between the three standards, but that there are important
political and economic motives to choose the ATSC, such as sharing the system with the US, Mexico, South Korea and
Honduras (500 million viewers), and the possibility to take advantage of existing bandwidth. Moreover, El Salvador has
close commercial links with the other ATSC countries that belong to the Dominican Republic-Central America Free Trade
Agreement (53% of all its trade is with the US) and most of its technology comes from US. Finally, more than 2.5 million
citizens of El Salvador lives in the US as a consequence of the conflicts that affected the country in the 1980s. This
population sends economic transfers as well as electronic equipment to their families.
In conclusion, the expansion of the ATSC in Latin America follows a different pattern than the one presented by
the other standards. The three adopters have been mainly influenced by their technological, economic and social
relationship with the US. Their membership in the Free Trade Agreement intensifies the political and commercial link with
this country.
44
Argentina was the first Latin American country to adopt the ATSC, but it later abandoned it.
Retrieved from: http://www.lared.org.mx/almacenpub/14%20Estandar%20Television%20Digital%20Terrestre.pdf.
See the Documento de Referencia Estándares de Transmisión de Televisión Digital Terrestre. This report is based on one study of the Universidad
de Chile made in 2006.
45
46
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J. Angulo et al. / Telecommunications Policy 35 (2011) 773–787
5. Conclusions
In the 1980s and 1990s the most industrialised countries in the world did not coordinate their efforts to create a worldwide digital television standard. As a consequence, there are currently four international standards. The US has replaced
the analogue NTSC system for the digital ATSC. Japan has abandoned the American NTSC standard to create its own digital
system, the ISDB. China is replacing the European analogue PAL standard by its own system, DMB-T. And Europe has
succeeded in getting all of its countries to adopt the DVB, avoiding the division created by the coexistence of PAL and
SECAM. The incompatibility of these four standards reflects the industrial and political interests of their promoters, and
has forced the rest of the countries of the world to decide which technology they use and which countries they associate
themselves with.
This article has analyzed the factors that have influenced the selection of the TDT standards in Latin America. A basic
aspect when choosing a standard is its capacity to adapt to the characteristics and needs of a particular country. In spite of
this, several studies carried out in Latin America show that technological differences between the TDT standards are small,
and that they tend to converge thanks to technological competition. In this situation, governments may select standards
taking into account its degree of implementation in other countries, since standards that are more widespread generate
more network externalities and economies of scale, and allow for better services at a lower price. This paper shows that
this has indeed been the strategy followed in Latin America, but instead of choosing the European standard, the most
adopted in the world, most countries have selected the Brazilian version of the ISDB, which is the most widespread system
in the region.
The second insight of this paper is that the leading countries in Latin America have adopted the standards that best
benefit their national electronics and audiovisual industries. Brazil has created its own version of the Japanese standard
and has persuaded many of its neighbours to adapt it too. Mexico has chosen the North American standard in order
to facilitate the entry of its equipment, television sets and media content in the United States market. Colombia has
selected the European standard in an attempt to become Latin America’s digital television gateway and thus foster the
development of its industry.
The decisions of these three countries, and in particular those of Brazil, have had a huge impact in Latin America. Small
and less developed countries usually select the same standards than those neighbours with whom they have stronger
political and commercial ties. Choosing a standard implies a long term commitment with its promoters and adopters. This
explain why when Brazil, Peru, Argentina and Chile selected the ISDB standard, most of the countries in the subcontinent
did the same. The adoption of the ATSC standard by Mexico, Honduras and El Salvador responds to a similar pattern of
technological, economic and political dependency with respect to the US.
Finally, in recent years the efforts of several countries for coordinating the development of the ISDB-Tb reflects the
strengthening of the political bonds in the region. Thus for example, in 2009 the members of Mercosur signed an
agreement in Lima to promote the ISDB-T standard,47 which in the coming years may compel a change in the decisions of
some countries that have selected a different system. On the other hand, in 2010 Argentina proposed the creation of a
working group in Unasur to coordinate the implementation of the digital television.
Acknowledgements
The authors thank the editor and two anonymous referees for useful suggestions and comments. This study has
received financial support from the Spanish Ministry of Education (ECO2009-06946ECO) and the Government of Catalonia
(SGR2009-1066). J. Calzada acknowledges the support of the Barcelona Graduate School of Economics.
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