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Spectral vision: tuning into Turnbull’s review frequency

Australia must embrace the innovation offered by an all digital spectrum world, Communications Minister Malcolm Turnbull said today, as bureaucrats and the smartest digital minds debate the nation’s lucrative airwaves at a major conference in Sydney.

Turnbull announced major changes for television, with community broadcasters to be moved to the internet, and a change in the compression standard broadcasters use, opening the prospect of a doubling of the number of free to air TV channels.

Opening RadComms2014 at the Australian Maritime Museum in Sydney, the Australian Communications and Media Authority’s annual spectrum management conference, Turnbull offered his proposals ahead of his department’s spectrum management review, which will report next year. The review’s eight terms of reference steer it towards a simpler, more flexible regulatory landscape, in line with the Coalition’s deregulation agenda, as well as microeconomic reforms to “unchain the full potential of spectrum as a valuable public resource”.

Turnbull offered three proposals, starting with a clearer decision-making framework:

“Most of the industry wants to see a clear division in the way spectrum is planned, allocated and managed. Where decisions have significant public policy implications, these should remain in the hands of the minister and the Parliament. Where there are issues requiring technical, planning and enforcement expertise they should be left with the regulator.

“In response to this I propose that the framework would include government policy statements being issued to the ACMA, as well as specific powers of ministerial intervention to direct major policy initiatives. This should improve certainty, streamline processes and reduce costs for all parties.

“To support the policy process the minister would be assisted by a requirement that the ACMA provide to the minister an annual work program, to be made public, identifying key priorities over a three- to five-year timeframe. This arrangement would allow the minister to indicate which processes are likely to be of interest to the government and to request further information or become actively involved where it would be in the public interest.”

His second proposal was a single licensing framework with greater flexibility to replace the current categories of spectrum, apparatus and class licensing:

“Some core conditions may be provided in legislation or communicated to ACMA through government policy statements, such as a maximum licence term and renewal arrangements — but the intent is for the licensing framework to be more flexible.

“This has the potential to simplify processes and provide much greater flexibility and choice for users, as well as improve efficiency. The legislated categories will no longer be an impediment to innovative new use of spectrum.”

The third proposal related to television broadcasting in the era of digital TV and online broadcasting. In Turnbull’s vision of the future framework:

“The government would retain the current restriction on the number of commercial television licences that can be allocated for the one licence area. Commercial and national broadcasters would be increasingly permitted to use spectrum more flexibly and allow third party access to their spectrum.

“The government would not constrain the type of services broadcasters offer apart from retaining the restriction on subscription television services.”

He says the government will not mandate “minimum numbers of multi-channels or minimum levels of high definition content” but would like to see the television industry move all its broadcasts to MPEG-4 format. The government would make part of the spectrum known as “the sixth channel” — currently used by community television and not much else — available “to assist in the testing and migration” to MPEG-4. The minister said:

“The government believes that the best outcome for community television is that in future it uses the internet as its distribution platform. To allow for this the government will extend current licensing arrangements until the 31st of December 2015 …

“Following a move to an MPEG-4 standard, in order to continue our drive to achieve maximum spectrum efficiency the government will encourage spectrum sharing between television broadcasters. We expect the national broadcasters to lead the way in this regard, with the commercials to follow.”

The current broadcasting standard is MPEG-2, and the proposal to move to an MPEG-4 standard opens the prospect of a significant increase in channels, with potentially a doubling of the number of channels available. MPEG-4 means signals can be compressed up to twice as much with no degradation of quality.

Reading the signals on spectrum

The Department and ACMA are tasked with shaping a system that facilitates new and emerging uses of the spectrum — especially if they can improve the efficiency of spectrum use — at the same time as maintaining certainty for incumbents. They also must include a framework to consider public interest issues — and all in a whole-of-government, whole-of-economy approach.

ACMA agrees the spectrum review is a timely initiative. General manager of communications infrastructure Giles Tanner says the legislation has served Australia well but with radiocommunications going digital and becoming a “rapidly evolving, high technology sector”, the costs of an outdated regulatory structure could add up fast.

Globally, demand for parts of the spectrum coming from wireless broadband applications is in a “close-fought race” against technical innovation — but it’s a race technology might win, according to Tanner. Spectrum shortages can be avoided, he says, but the situation still has significant implications for regulators like ACMA.

“In particular,” he said, “technological developments that change the value and optimal use of specific spectrum bands may expose inflexibilities and weaknesses in a regulatory toolkit designed for the challenges of 1992.”

The mobile telecommunications industry is broadly supportive of the review’s terms of reference. Chris Althaus, chief executive of telco lobby the Australian Mobile Telecommunications Association, says the strong growth of mobile broadband has led to “a much higher level of contention when it comes to the allocation of spectrum”.

“The spectrum is a finite resource so if somebody wants more, typically someone else has got to have less, and incumbent users are usually pretty feisty when it comes to giving up spectrum resources,” he told The Mandarin.

“Opportunities to review legislation like this don’t come up very often so it’s important we do it right and we do it thoroughly …”

Althaus says the review needs to fix issues in the short term, but also look beyond. “There are things that can be done in the short term, but as important, if not more important than the short term tidy-up issues, is the more fundamental reform of the act, and that is a longer term, more substantial project,” he said.

“Opportunities to review legislation like this don’t come up very often so it’s important we do it right and we do it thoroughly … There is always going to be tension — people will be anxious to maintain access for their own specific uses — but the job of the ACMA and the department is to get the balance right.”

Turnbull reminded the conference today that current spectrum regulations date back to 1992 — one year before Australia’s first digital mobile networks were rolled out. The framework was last reviewed by the Productivity Commission in 2002.

The minister said he looked forward to the day when the only signals transmitted via radio waves are digital, and “there will be less need for governments to create complex spectrum allocation charts to make sure one analogue service does not interfere with another”. He also revelled in the wonders of digital compression:

“Once you have a block of spectrum, advances in compression technologies mean you can deliver ever more data over it … This means a chunk of spectrum allocated today could be used for ever more services tomorrow.”

But that day is not here yet and the new spectrum regulations will need to balance the needs of incumbents with the new digital players. Or in the minister’s words:

“… there is more competition, more innovation, more disruptive dynamic change than ever before. It means the cost of government regulation has never been greater; both because it inhibits new business models from prospering and forces unnecessary costs on the incumbents when their profitability is under increasing pressure.”

The Department of Communications will release a directions paper in October setting out a range of possible reforms, and hold a stakeholder workshop before the end of the year, Turnbull said. A discussion paper to consult with industry players over the issues specific to television broadcasting will also be released “shortly”.

Author Bio

Stephen Easton

Stephen Easton is a journalist at The Mandarin based in Canberra. He's previously reported for Canberra CityNews and worked on industry titles for The Intermedia Group.