ETV SUBMISSIONS ON CHANGING THE STANDARD FOR DIGITAL TERRESTRIAL TELEVISION IN SOUTH AFRICA

7.	MAY 2010

1.	INTRODUCTION

1.	e.tv thanks the Department of Communications (“the DoC”) for the opportunity to make this submission on changing the standard for digital terrestrial television in South Africa. 

2.	As the only commercial free-to-air television broadcasting service licensee, e.tv is a vibrant presence in the South African broadcasting landscape, now attracting the second largest audience with a market share of approximately 22%.

3.	e.tv’s controlling shareholder, Hosken Consolidated Investments (“HCI”) is a leading black empowerment company listed on the JSE Limited (“JSE”). HCI is controlled by the South African Clothing and Textile Workers Union (“SACTWU”) and its social benefit trusts. The members of SACTWU comprise of some 80 000 clothing and textile workers. The beneficiaries of the trusts are these workers together with their dependents. A large portion of investment income is allocated to the SACTWU Welfare Programme to provide social benefits to SACTWU members and their dependants. The range of projects funded by the Welfare Programme primarily covers educational support, employment creation and protection projects, HIV-Aids, health care projects and housing. HCI is one of the few companies on the JSE where broadly based black empowerment shareholders with substantial social responsibility initiatives have a major economic interest.
4.	As one of three terrestrial television licensees in South Africa, e.tv is directly and materially affected by any decisions taken by government on the digital migration process. In addition, as a free-to-air broadcaster, e.tv will be responsible for driving DTT and STB up-take by consumers. For these reasons, e.tv has always endeavored to participate in any forum where matters concerning digital migration are discussed. e.tv therefore participated throughout the workings in the DMBWG from 2005 -2006, sits on the SABS TC74 committee which developed the STB specification, and also served on the Digital Dzonga Advisory Council. 

5.	In is in the above spirit that we attended the symposium and that we make these written submissions on the consideration of a change of standard for DTT. At the outset, e.tv records its grave concerns about the appropriateness of contemplating a change at this late stage.

6.	e.tv also wishes to place on record its concerns about the manner in which this process has unfolded which has led to a perception that, notwithstanding the holding of the symposium, a view already exists in the Department that the standard should be changed. This was supported by certain of the language used at the symposium and the fact that at the symposium:

6.1.	Not all available standards were given the opportunity to present so that a proper and informed decision could be made;
6.2.	The person presenting information concerning DVB-T and DVB-T2 was originally cut short; 
6.3.	Presentations about ISDBT were given more prominence than any other presentation;
6.4.	Interested parties from South Africa were not given the opportunity to present either on the DTT trials using DVB-T, on why the existing and adopted standard should not be changed and on the adverse effect any change would have on the industry as a whole and on the public, and
6.5.	The working streams were populated by lobbyists supporting the change to ISDBT in circumstances in which, other than in one instance, no lobbyists representing the remaining standards were present.

7.	Given that e.tv has had an unreasonably short time to make its submissions on this important matter (only five working days of which two required broadcasters to attend a local content summit hosted by the Department) we make the following brief submissions. We deal with why a change in standard from DVB-T, whether to ISDB-T or to any other standard, should not be entertained and we detail some of the negative consequences which would arise from such a change. The submissions focus on ISDBT as this is the only standard which was substantially punted at the symposium.

8.	We reserve the right to supplement our submissions in due course.

2.	SOUTH AFRICA, WITH THE REST OF AFRICA, HAS ALREADY ADOPTED THE DVB-T STANDARD

1.	Based on comments made by a senior Department official at the symposium, e.tv is concerned that the Department appears to mistakenly believe that a different standard for digital broadcasting can be entertained as South Africa has not yet chosen a standard. This is incorrect. DVB-T was adopted as the standard for digital television in 2005 by the South African Bureau of Standards (SABS 300744:2005).  The Minister’s Digital Broadcasting Migration Policy, gazetted in 2008, again formally adopted the DVB-T standard for South Africa.

2.	For the Department’s benefit, we include below a timeline of the development of the DVB-T standard in South Africa. This shows that both the ISDB-T standard and the DVB-T standard have been repeatedly evaluated and the DVB-T standard has repeatedly been found to be the most suitable for South Africa.

Timeline for the DVB-T Standard in SA

2002	DBAB, a body appointed by the Minister to make recommendations on digital migration, recommends the DVB-T family of standards. The recommendation is informed by a study conducted by the Southern African Digital Broadcasting Association (SADIBA) where the ATSC, ISDB-T and DVB-T standards were evaluated and compared based on six criteria. They found DVB-T to be the best standard for South Africa.
2004	South Africa’s preparations for RRC06 are based on the DVB-T standard. The National Preparatory Task Team convened by the DoC to compile SA’s requirements for the Regional Radio Conference (“RRC”) of the International telecommunications Union (“ITU”) bases its recommendations on the DVB-T standard.
2005	DVB-T is recommended by the Digital Migration Working Group. The Minister establishes the Digital Migration Working Group to make recommendations on a national strategy for the migration from analogue to digital. The technical committee of this working group considers the three main standards (ISDB-T being one) for digital broadcasting and again recommends the adoption of DVB-T family of standards. 
2005	SABS adopts DVB-T. The South African Bureau of Standards (SABS) adopts DVB-T as the standard for digital terrestrial television in South Africa (SABS 300744:2005).
2006	South Africa is a signatory to GE06 which is based on DVB-T. After the ITU RRC in Geneva, South Africa becomes a signatory to the Regional Agreement and associated frequency plan based on the DVB-T technical parameters.  
2008	Government policy states that DVB-T is the standard for South Africa. The Minister gazettes the Digital Migration Broadcasting Policy on 8 September 2008. The policy formally adopts the DVB-T standard for South Africa. Cabinet approves the Digital Migration Broadcasting Policy. 
2008	Network roll-out commences based on the frequency plan informed by DVB-T. Sentech and Orbicom commence the roll out of their digital terrestrial networks based on the frequency plan informed by DVB-T. 
2008	The Minister publicly launches the DTT trials using DVB-T.  All 3 terrestrial broadcasters and two broadcasting signal distributors conduct DTT trials using the DVB-T standard. Local manufacturers produce approximately 6000 DVB-T STBs. The trials are subsequently assessed to have been very successful by all parties. 
2009	The STB specification which is based on DVB-T is adopted. The South African Bureau of Standards published the South African National Standard (SANS 862) for set top box decoders. This standard is based on DVB-T.
2009	SADC confirms its support for DVB-T. SADC Regional broadcasting Digital Migration Working Forum agrees that DVB-T should be adopted as the standard within SADC with the provision for countries to be upgraded to DVB-T2 should they elect to do so.	
2009	ICASA finalizes the Broadcasting Frequency Plan based on the DVB-T standard. ICASA publishes the final Terrestrial Broadcasting Frequency Plan and includes a technical annexure confirming DVB-T as the basis for the plan and the parameters to be considered for the successful implementation and compliance with GE-O6 to which South Africa is a signatory.

3.	Given that the DVB-T standard has been formally adopted by South Africa in Ministerial policy, e.tv is of the view that compelling reasons would need to be given to justify any change to the standard. In e.tv’s view no such compelling reasons have been advanced. On the contrary, a change in standard would be prejudicial to the industry and the public and would result in at least the following:

3.1.	A lengthy delay in the launch of DTT;
3.2.	An unnecessary waste of both government and private sector resources; and
3.3.	A substantial increase in the costs to consumers with a direct knock-on effect on the uptake of DTT and ultimately an increase in the length of dual illumination.

4.	Over and above the adoption of the Ministerial policy, the standard has already been adopted by SABS and cannot merely be withdrawn or changed. Even if it is, it could take years for the required consensus to be reached for a new standard to be adopted. In fact, given the prejudice which will be suffered by the adoption of a new standard, it is conceivable that consensus will never be reached.

5.	In addition, as some African countries have already commenced broadcasting on DVB-T networks, if South Africa changes, it means that there will not be a single standard throughout the continent. It is generally accepted that a single standard throughout the continent would be of benefit to consumers and broadcasters.
3.	ISDB-T is not technically superior
5.	3.1 As noted repeatedly during the symposium, tests show that ISDB-T’s technical performance is broadly similar to that of DVB-T. There is therefore no compelling technical reason to adopt an alternate standard. If South Africa wishes to adopt the best available technical standard, then there is no dispute that DVB-T2 is the standard to be chosen, not ISDB-T. 
6.	3.2 Both and DVB-T and ISDBT have the following common functions
•	Both systems are capable of return path and interactive services in order to support services like e-government, interactivity, games, weather, etc.
•	Both systems have royalties payable. Both systems use common royalty based technologies like OFDM, Reed Solomon, MPEG2/4,etc. In both cases those royalties costs are included in the chip set. 
•	Both systems are capable of multi mode operation from the same transmitter. Both systems can provide fixed and mobile services. DVB does offer more mobile services if required than ISDBT.

3.3 Although the standards are technically similar, ISDB-T comes with a significant risk profile, namely:
•	ISDB-T has never been deployed or developed for an 8Mhz configuration. This was confirmed repeatedly in the symposium. Therefore there are neither 8Mhz transmitters nor receivers for ISDBT available anywhere in the world. The development of 8Mhz transmitters and receivers for ISDBT is complicated, despite the false claims made at the symposium by proponents of ISDBT. e.tv understands that these developments cannot be completed in the short periods of time suggested at the symposium;
•	Even if 8Mhz ISDBT transmitters and receivers were available, South Africa would be substantially prejudiced in terms of pricing and availability for these units as we would be the only country in the world utilising ISDBT in an 8Mhz configuration;
•	No ISDB-T skills exist in South Africa. The implication of this is that South African industries especially STB manufacturers will be heavily reliant on foreign consultants and foreign IP. If the Department still insists on a 2011 switch-off there will be no time to transfer any such IP and all devices will ultimately be imported from foreign manufacturers, resulting in no transfer of skills or development of local IP.
•	There is no natural upgrade path for ISDBT meaning that there is no prospect of greater spectrum efficiencies in future if this technology is chosen now. 
3.3 Set against this, DVB-T has the following clear advantages:
•	DVB has been deployed in 120 countries using 6, 7 and 8 Mhz configurations. The majority of these deployments are 8Mhz deployments and therefore lend themselves to immediate deployment in South Africa and any other country in Africa operating in the 8MHz configuration;
•	8Mhz DVB-T transmitters and receivers are widely available at very reasonable cost;
•	There are substantial DVB-T skills in South Africa. For example, Altech UEC, a local STB manufacturer, has invested in DVB technologies for the last 15 years and have produced approximately 10 million STBs; and
•	There is an optional upgrade path from DVB-T to DVB-T2. DVB-T2  far outperforms all other DTT technologies in operation to date. It delivers 30%-60% more services than DVB-T or ISDBT at the same network costs. It is backward compatible with DVB-T and is able to co-exist with DVB-T networks. DVB-T2 is already in commercial operation in the United Kingdom. 

4.	Investment which has been made in DVB-T will be lost

e.tv understands that hundreds of millions of Rands have already been spent by broadcasters (including e.tv), signal distributors and manufacturers in South Africa on DVB-T equipment and testing. Huge resources have also been expended in extensive public processes and consultations. The bulk of this investment would be wasted if the standard changed now and many if not all of the processes would need to start afresh.

5. Consumers will be prejudiced by having to pay more for ISDB-T STBs

5.1 As noted during the symposium, the DVB-T standard has been adopted by over 120 countries, and therefore any country using it is able to benefit from considerable economies of scale. 

5.2 Outside of Japan, no countries using the ISDB-T standard have yet successfully switched off their analogue broadcast systems. High STB prices are likely to mean switch-off will drag out in these markets. In contrast, many DVB-T countries have already switched-off. Those European countries which haven’t already will do so in 2012. Within SADC, Mauritius will switch off in 2013. 

5.3 This is not the case with ISDB-T where only eight countries have adopted it and only two have deployed it. The two which have deployed, Japan and Brazil, are using different variants meaning that a STB made in Japan will not work in Brazil.  If follows that no STBs manufactured in either country will work in South Africa. This means that the price of ISDB-T decoders will remain high. This will directly affect consumer uptake and consequently the length of dual illumination. 

5.4 Higher STB prices will also require greater government expenditure on subsidies. This will have a direct effect on the tax payer as these funds will need to be sourced. Alternatively fewer consumers will receive the subsidy. Please refer to the slide below on Brazilian ISDB-T prices ex-factory presented at the symposium. In contrast to the high prices for ISDB-T STBs, based on the prices paid for STBs during the DTT trials, we would expect a DVB-T decoder to cost between $20-$25 ex factory

5.	In summary, choosing ISDB-T will mean South African consumers will pay substantially more for decoders and consequently broadcasters will be hampered with the costs of a longer dual illumination period. 

6. There will be delays IN THE launching OF DTT

6.1 Considerable time delays will be caused by changing the standard to ISDB-T. e.tv estimates this as at least 3-5 years.
•	A new STB spec will need to be developed through SABS. This previously took approximately 12 months.
•	New broadcaster rules of operation and middleware specifications will need to be developed.
•	Additional frequency planning and co-ordination would need to be done.

•	The DTT regulations may need to be revisited. 

•	Conservatively speaking at least 6 – 12 months would be required to develop 8mhz technology for ISDBT

6.2 Every year that the migration is delayed, means another year of delay in the delivery of the digital dividend. The delay in the delivery of the digital dividend will negatively impact the growth of South Africa’s communications sector and the ability to deliver communications services, including but not limited to wireless broadband services, to the people of South Africa.

6.3 Furthermore, a delay in migrating to DTT means that the existing broadcasts will operate on ageing analogue transmitters. The cost of maintaining these transmitters is growing exponentially every year and manufacturers are starting to stop supporting analogue transmitters. Ultimately this could result in a situation where the existing analogue services start experiencing substantial interruptions and breakdowns due to ageing equipment thus affecting access to free-to-air television. 

7. CONCLUSION

 e.tv believes the socio-economic impact of a change in standard has not been carefully considered by the Department. No good and justifiable reason exists for even considering a change to the existing and adopted standard.

e.tv
7  May 2010