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  • 1. Implications of Internet on broadcasting Anders Henten, Ph.D. Reza Tadayoni, Ph.D. Center for Tele-Information Center for Tele-Information Technical University of Denmark Technical University of Denmark Build. 371.2 DK-2800 Lyngby Build. 371.2 DK-2800 Lyngby Version: Work in progress, July 2001 Abstract One of the main challenges within broadcasting research in the recent years has been to understand the evolution from traditional broadcasting to digital broadcasting. The aim of this paper is to step further and give an analysis of Internet’s influence on traditional broadcasting services – now being analogue as well as digital broadcast. In this analysis an inter-disciplinary approach is deployed, where the technological, economic and political drivers and barriers in this development are identified. It is then shown to what degree these parameters and the inter-relation between them influence this development. 1. Introduction Provision of broadcasting over the Internet and Internet services over broadcast platforms are two examples of ongoing convergences between mass media, IT and telecommunications. These convergences entail the emergence of a number of innovative services and new possibilities for distribution and access. However, there may also be barriers to such convergences, and in the paper different drivers and barriers - technological, economic, political and cultural - are examined. The paper focuses on the provision of broad- and narrowcasting over the Internet – called Internet TV in the following. From the growing array of different video applications emerging on the Internet, we concentrate on professionally produced video content as opposed to amateur video sequences. Furthermore, we exclude pure catalogue services provided by, for instance, virtual video shops and focus on services that have an edited character and where providers take responsibility for the products as such. The borderline between interactive broad- and narrowcast services and catalogue services may be very blurred as catalogue elements are an important part of the interactivity of services. However, the claim is here that in the vast pool of emerging video services there is a category of services that has a broadcast or a narrowcast character, which are professionally produced, and that constitutes entities of edited content. 1
  • 2. Prior to the advent of the Internet as a widespread means of communications, broadcasting has experienced other important changes. Cable and satellite transmissions have led to a multi-channel situation and a more internationalised environment, which is quite different from the former situation characterised by a single or a few channels of national origin. Lately, the digitalisation of broadcasting has also begun to make an impact both in terms of the possibilities for yet more channels and for a degree of interactivity. Internet as a platform for video communications is an additional step in the changing scenery for broadcasting. In some discussions concerning the future of broadcasting, Internet TV is portrayed as an alternative to traditional broadcasting. The aim of this paper is to examine this claim from both a technological, economic, political and cultural angles and, thereby, hopefully to contribute to a sound basis for a discussion regarding Internet TV as a substitute or complement for what we know as broadcasting today. In connection with the latest media agreement in Denmark, the representatives of the two largest liberal parties were especially vocal in their claim that the Internet is the future of broadcasting and that discussions of frequency assignments tend to be retrogressive or futile. However, in reality there turned out to be a considerable interest in acquiring the frequencies for a fourth national radio channel (part of the political media agreement), which is an indication of the continued importance of more traditional kinds of electronic mass communications. In order to get a spit deeper in analysing the prospects of Internet TV, the paper examines primarily three aspects of the technological questions related to video applications on the Internet: • Capacity / bandwidth : Does Internet provide the necessary capacity needed for video services? The problem is analysed relating to access as well as core networks. • Network architecture: Can the one-to-many architecture of broadcast networks be integrated in an efficient manner into the Internet architecture? • Quality of service: Can Internet TV obtain a sufficient quality of service comparable with present broadcast TV? The paper also examines the market related (economic and cultural) issues that form part of the question of the Internet as a platform for broadcast and other video services. There are two main angles to these issues: • On the demand side, it must be analysed to what extent users will demand the new forms of interactivity and personalisation of services that are facilitated by using the Internet platform. • On the supply side, the prospects of the coming together of different parts of the media sectors should be analysed, including possible business models for Internet TV operators. 2
  • 3. Finally, there is an analysis of aspects of the question of a cultural-political character, mainly centring on the issue of the future of the public service notion, which has been crucial to the broadcasting area for decades. 2. Technological aspects Traditionally, different infrastructures have been used to transmit and deliver specific information and communication services. Examples are: dedicated telephony infrastructures for transmission of Plain Old Telephony Services (POTS) and broadcasting networks for casting Plain Old TV Services (POTVS). These infrastructures have been dimensioned and optimised to meet the specific requirements of these services. The reasons for this separation and dedication of infrastructures and services can be found in the technological characteristics of the services as well as the historical and regulatory / political parameters. The technology and the regulatory frameworks of information and communication services have, however, been subject to radical changes during the last 20-30 years. The technological development has resulted in emergence of new infrastructures and better integration of different services in different infrastructures mainly due to digitalisation. This development alongside with changes in the political / regulatory settings have created a situation where all services, including broadcast TV and other video services, can in theory be offered through different infrastructures; a process that in the literature often has been denoted as the convergence process. A long-sighted vision of convergence can be that all services at the end users’ site will be provided through one integrated network. This requires among other things: availability of very high-speed connections at the end users’ premises, efficient organisation of networks and protocols that can facilitate this integration. There is, however, a common understanding that to come that long we will go through a transition period where current and new infrastructures will compete at the end user market and adjust to emerging type of services. Efficient utilisation of resources in the individual infrastructures and the utilisation of the synergy between these infrastructures are vital to minimise waste. Provision of broadcast TV and other video services over the Internet influences different networks at different levels. Core network has, e.g., other characteristics than access network resulting in different conditions and requirements. The intention of this chapter is to clarify the technological problems and barriers related to provision of broadcast TV and other video services over the Internet. In the following first the problem field of this paper is described, i.e., what Internet TV is and how it relates / differs to / from digital TV and e.g., IP TV. Later the 3 technological parameters: capacity/ bandwidth, network architecture, and Quality of Service are described. After these introductory sections, different infrastructures are examined according to their ability to fulfil the end-users’ TV demand by using Internet TV. 3
  • 4. 2.1 Concept clarification: Digital, IP, and Internet TV The aim of the following is to clarify different concepts used in the literature when talking about TV in digital form. Digital TV Digital TV denotes a set of standards that aim to distribute TV signals in digital form in a specific and standardised way. In this set of standards there is also created room for transmission of data services. Data services in Digital TV standards are either stand-alone data services or program related data. Digital TV standards are not worldwide standards and different markets apply to different standards: European DVB, US or Japanese standards. The main block of these sets of standards, namely video compression standard MPEG-2, are the same in all standards. Because of specific characteristics of different infrastructures, different standards apply to different infrastructures. In the European DVB standard different set ofstandards are developed for all current infrastructures. DVB standards are widely used all over the world, both in terrestrial, cable and satellite digital TV. Also in some markets combinations of different standards are used1. IP TV IP TV denotes delivering of TV over IP protocol. IP TV can be transmitted in different networks that are based on the IP protocol. One of the major IP networks is the Internet, but Internet is not the only IP network. Dedicated IP networks can be established, and in current networks the IP protocol can be used widely without having specific relations to the Internet. One of the examples for dedicated networks is cooperative networks or Local Area Networks in the firms and residential areas. Regarding Quality of Service, dedicated networks have an obvious advantage compared to the Internet. In dedicated networks, the network provider can allocate resources such that different services / applications perform in most optimal way, where in the Internet it is a complex issue to guaranty certain level of service quality. Internet TV As described above the Internet network is the major network that is based on the IP protocol. IP TV is widely used over Internet in the recent years. The quality of the video transmitted in this way is not comparable with broadcast TV quality. Because of interactivity on the Internet, it is however possible to add other values to these services, making Internet TV a good alternative for narrowcast purposes. In the literature, the concept of Internet TV is also used when transmitting Internet services over TV networks. Further the concept WEB TV is used both when transmitting TV over the WEB and WEB services over TV networks. In this paper Internet TV is used in the above-mentioned meaning, namely transmission of TV and other video services over the Internet. 1 For more detailed information and analysis of Digital TV please refer to Reza Tadayoni: Political economy of digital broadcasting, Ph.D. Thesis, CTI, Technical University of Denmark, November 2000 4
  • 5. 2.2 Technical / technological parameters There are several parameters influencing Internet’s ability to transmit video services. As mentioned above there are 3 parameters; capacity, network architecture, and Quality of Service are the major parameters. These are described in the following. Capacity / bandwidth Table 1 shows different capacity requirements standardised for broadcast Digital TV. A bandwidth of 4 Mbit/s corresponds to regular PAL quality in analogue world and is denoted as Standard Definition TV (SDTV). It is quiet certain that traditional broadcasters will not accept a quality less than SDTV. Table 1: Levels and profiles of MPEG-22 Levels Simple Main SNR Scalable Spatially High Profile Profile Profile Scalable Profile (SP) (MP) (SNRP) Profile (SSP) (HP) High (HL) MP@HL HP@HL 1920X1152 pixels 80 Mbit/s 100 Mbit/s High-1440 (H14L) MP@H14 SSP@H14L HP@H14L L 1440X1152 pixels 60 Mbit/s 80 Mbit/s 60 Mbit/s Main (ML) SP@ML MP@ML SNRP@ML HP@ML 720X576 pixels (Rec 601) 15 Mbit/s 15 Mbit/s 15 Mbit/s 20 Mbit/s Low (LL) SP@LL SNRP@LL 352X288 pixels 4 Mbit/s 4 Mbit/s Looking at the current capacity available at the end-users’ site: regular modem up to 56Kbit/s, ISDN up to 128 Kbit/s, and even available DSL technologies of up to 512 Kbit/s, it is obvious that allocation of 4 Mbit/s for a TV service is not currently possible on the Internet. The capacity problem is not only applied to the access network. Even if the access networks in some residential areas are increased to be able to provide the required 2 Dambacher P.: ”Digital Terrestrial Television Broadcasting- Designs, system and operation”, Springer, 1997 5
  • 6. capacity, it is far from certain that the backbone network is upgraded accordingly. There are firms specialising in provision of new infrastructures, which offer LAN type of networks of 10 and even 100 Mbit/s to residential premises. But their backbone capacity can far from follow this development. Regarding video services over the Internet other coding schemes are used that do not offer acceptable broadcast quality but are usable for narrowcast purposes, where the picture quality is not that important and other Internet related added values compensate for the lack of quality to some degree. Network architecture The network architecture is another important parameter. We can roughly distinguish between switched/routed networks and broadcast networks. Traditionally broadcast networks do not have the return path necessary for interactive services. Digital broadcast networks implement, however, a return path, either integrated in the network or using other networks. Broadcast services over switched /routed networks is not an efficient way of utilisation of network resources. Especially when ‘broadcast service’ denotes a service that is transmitted to many users and these ‘many users’ demand the service3. All switches and routers in the network will then do a simple job of connecting the same input to many outputs, that is an in-efficient way of using a switched/routed network. To a certain degrees this is in line with the experiments in UK in early 1980s, where the cable companies implemented switched cable networks. Consequently the cable companies observed that the vast majority of users watched BBC for most of the time, reducing the function of the expensive switches to a wire connecting BBC input to all outputs. Quality of Service Traditionally, QoS has been associated with the ability of telecommunications networks to guarantee a predefined level of quality for specific services when these are established and transmitted in the network from point A to point B. These QoS-concepts are meticulously described in ITU/ CCITT recommendations and have been among the arguments for establishing dedicated networks for different services as this makes it easier to optimise the networks with respect to the QoS-parameters. A simple example is POTS, which demand specific quality levels for end-to-end delay, delay variation and noise when the connection is established. QoS requirements are not applied only in the transmission part but also in other levels of communication. An example is the establishment phase of a POTS connection, where a set of other QoS parameters like the level of blocking rate and by that the number of lines in the access network and the capacity of the core network are needed. Video services, especially interactive video services, are very sensitive to end-to-end delay, delay variation and noise/interference, etc. As far as a dedicated network is deployed for distribution of video signals these QoS parameters can be kept under control. When integrated networks are used, where video services are one of the services in the network then different methods must be used to guaranty some minimum QoS parameters. 3 I.e., services with public interest 6
  • 7. One method to guarantee a given level of service is that every service negotiates parameters over the network (delay, loss-rate etc.). This method is now current for connection-oriented networks as, e.g., ATM4-networks, but is still a challenge in connectionless networks as, e.g., the Internet. Another approach is establishment of a prioritising scheme that can be applied to IP type of networks and will be applied to IPV 6. Another important dimension is that QoS has a price. A price that can be an important parameter when comparing the cost of establishment and maintenance of an integrated network versus a combination of broadcast networks and Internet network. 2.3 Analysis of different infrastructures In the following different infrastructures are analysed with respect to their ability to deliver different services (broadcast TV/other video servcies, telephony, data services, etc.) on the Internet. To simplify the analysis, it is considered whether different networks are able to deliver a capacity corresponding to 14 Mbit/s, down stream (3 TV5 services in SDTV quality and 2 Mbit/s for data and other communication services)6 with a reasonable up- stream capacity. The major current infrastructures are examined in the following. Regular telephony network7 Within ADSL (Asymmetric Digital Subscriber Line) technology, a high speed data connection in regular telephony network, it is not possible to deliver 14 Mbit/s8 and therefore regular telephony network has not the ability by itself to deliver all services demanded on the market. Other technologies like VDSL, that is not commercially feasible, have promising performances that will put POTS network in an attractive position. The advantage of POTS network is that it is switched network and the services can be selected centrally among larger amount of services at local exchanges. POTS networks’ other clear advantage is their high penetration compared to, e.g., cable TV. Cable TV Regarding capacity, cable TV networks have optimal characteristics. The networks must, however, be digitised and upgraded to two-ways. Cable networks are structured for broadcast services. Therefore it will be necessary to implement new network architecture to meet the requirements of Internet services. Cable TV is typically established in urban and suburban areas and far from all population have access to this network. The problems of cable TV are: 1) the penetration is far from 100% in majority of countries and 2) it requires tremendous amount of financial resources to establish the necessary architecture for transmitting Internet services and to develop cable TV networks to cover entire 4 Asynchronous Transfer mode 5 The assumption is that a ‘modern’ TV consumer needs to access 3 TV services in parallel, e.g., parents watch one, children another and the third service is recorded at the same time. 6 The 3 TV services must be selectable among a larger number that depends on demand . 7 Plane Old Telephony Services (POTS) network 8 ADSL is standardized to a maximum of 6 Mbit/s over copper wires. 7
  • 8. populations9. LAN type networks Local Area Networks (LAN) have primarily been used at professional level, in firms, universities, etc. In recent years LAN type of networks are more and more used to offer high speed services to private households. Especially big building blocks are target for this application. These networks can in principal deliver Internet TV but it requires that a completely new infrastructure has to be established. Satellite network In the residential market satellites are mostly used for direct to home broadcasting. The network is optimal for transmissions of large amount of data to many users, but less optimal for delivery of two-ways data services. For example to provide 30%10 of Danish population with 2 Mbit/s per household through satellite, app. 1875 satellites are needed [0]. This must be seen in relation to Eutelsat’s 15 satellites. Terrestrial TV network Terrestrial resources are scarce. Suggesting that terrestrial networks provide 2 Mbit/s per households is even more unrealistic than it is the case in the satellite networks. An analogue 8 MHz TV channel in digital form can corresponds to 3 TV services and 5 –8 Mbit/s data services that can offer 2 Mbit connection to a maximum of 4 households per transmitter. MVDS, FWA & other wireless networks MVDS: Microwave Video Distribution System (MVDS) is a broadband radio system for distribution of TV-programs. MVDS, also called wireless cable, will typically be used in areas where it is not economically feasible to install cable network – in Europe it is especially used in Ireland and Switzerland. FWA: Fixed Wireless Access is the “end user radio connection(s) to the core network”11. FWA is a competitive infrastructure to fixed telephony network and its capacity can vary from 128 Kbit/s to over 100 Mbit/s depending on the allocated spectrum. Other wireless networks like wireless LAN that is primarily used in firms and in geographical areas like university campuses are going to be used more and more in the residential sites. None of these wireless networks are commercially available in Denmark. Mobile 2G and 3G networks Data and multimedia services will dominate the future the traffic in the mobile networks. High-speed protocols in 2G GSM networks like General Packet Radio Service (GPRS) and 9 In Denmark, the cost of covering the whole country with cable TV is estimated to a prohibitive amount of about one bill. US$ [0]. 10 In this way it would be possible to cover the whole country by cable and satellite networks, as 70% of Danish households are cable households. 11 ITU definition 8
  • 9. Enhanced Data rated for GSM Evolution (EDGE) increase the current 9.6 Kbit/s capacity of GSM to 64 – 384 Kbit/s. The third generation GSM, UMTS, increases the capacity even more (up to 2 Mbit/s with stationary reception). Mobile networks meet one of the important requirements of new services and applications, namely mobility, but as seen above, even future UMTS networks will not meet the requirements of the needed capacity for convergence services. As seen, none of the access networks have the possibility for offering the capacity needed for Internet TV to replace traditional broadcast TV. Upgrading the access and core network to be able to do this is so expensive that makes it totally un-realistic in shorter term. Even if the networks are upgraded it is not necessarily the most efficient way to transmit broadcast TV through the Internet. One solution in current situation is to utilise synergy between networks and utilise the strength of different networks. In this way different components of the same service can, e.g., be transported over different networks. Here the broadcast networks will remain as a platform to transmit high quality TV signals demanded by larger consumer bases, and the Internet will be used to transmit added services to these TV services and to transmit stand-alone Internet TV services. 3. Market aspects The question is not whether we will have Internet TV. It’s already there and will surely develop in the years to come. The questions are rather what the market potentials are for Internet TV and whether there are market-based arguments for Internet TV to supplement or complement more traditional broadcasting. In the following, these questions are examined both from the demand side and the supply side. If assuming away the technical problems with Internet TV, one can first look at the features that Internet TV in principle provides. It allows users to view programmes when they wish, in contrast to traditional broadcasting where the time of transmission is fixed. It allows for a potentially indefinite number of programmes – much larger than even the multitude of TV channels available on digital broadcast TV - including all sorts of real- time events, e.g. sports and shows, and programmes from parts of the world that one would never be acquainted with otherwise. It allows for programmes produced for small communities, either local or global. And it allows for an extended interactivity in the sense that programmes can be stopped, different aspects explored, different versions required, etc. All of these features are potentially in high demand. There will certainly be a demand for professionally produced video content where users can chose what to watch, how to watch and interact with it, and when to watch it. However, this does not mean that there won’t be a demand for more pre-packaged services – or rather that the abovementioned features won’t be made part of pre-packaged offers. The most likely scenario is that many different kinds of video services are offered to users, encompassing both pure catalogue services and 9
  • 10. more or less edited programme packages. Many of these services will be offered on Internet, yet others will be offered on other platforms, primarily digital broadcasting via cable, satellites or terrestrial networks. In discussions regarding the convergence of the Internet and broadcasting, it is often stated that one of the barriers to a total integration is that Internet is a ‘forward leaning’ media while broadcasting is ‘backward leaning’. On the Internet, users interactively relate with the services by clicking on icons, etc., while traditional broadcasting users are just consuming a one-way stream of information / entertainment. However, when we discuss Internet TV there is nothing that prohibits users from just consuming pre-prepared content. The interactivity possibility is there, but does not have to be used. Converged terminals may at one moment be used for interactive communications and at other moments be used for ‘couched potato’ consumption. Or terminals may be different, but all attached to the Internet. The differences in usage modes are not, per se, an argument against broadcasting via the Internet. Another argument deals with the substitution or complementation between media in general. It is almost a truism that new media do not substitute old media but merely add to the total number of existing media while possibly altering the role of old media. Posted letters did not disappear with the telephone. Radio did not die with the breakthrough of television. And so on. However, some media have actually been made obsolete by new means of communications. Telegraph barely exists any more – the reason being that other services have come to substitute the functionalities provided by the telegraph. Telegraph is for text communications, and both fax and e-mail are direct competitors. When media supplement instead of substituting for each other the reason is that they relate to different functionalities. Audio communications on radio cannot be substituted by TV, which require the visual attention of users. However, posted letters are in danger of becoming obsolete with e-mail and the web although their decay may take many more years. With respect to broadcasting and Internet, the Internet may in principle substitute for traditional broadcasting. There is nothing that traditional broadcasting can do as a media that Internet TV cannot do. It is, therefore, a conclusion that there are no media functionality reasons hindering Internet TV in substituting traditional broadcasting. But there may be other market related reasons dealing with access to the different communication platforms. In June this year, the Danish Ministry of IT and Research published a report on access to fast Internet connections12. The main conclusion is that already today, and even more so in the very near future, high speed Internet is offered to the vast majority of the population of Denmark. The problem depicted is thus not potential access but the actual take up of high speed and broadband connections, which according to the report is related both to the price of Internet access and the content available on the net. In the Danish context, public economic support is, therefore, not allocated for the building out of broadband infrastructures, but pressure is put on providers to lower their prices, and support for the development of content is foreseen. 12 Forskningsministeriet: Fra isenkram til indhold – Strategi for hurtigt, billigt og sikkert internet til hele Danmark (From hardware to content – Strategy for fast, cheap and secure Internet in all of Denmark), 2001. 10
  • 11. This is all very nice, however, the capacities and bandwidths in question in the report of the Ministry is far from sufficient for Internet TV. The technologies considered as the most prominent in the access networks are ADSL, cable modem and FWA, FWA may be offered with a very large bandwidth but will mostly be offered for the residential market with a bandwidth of 2Mbit or lower, and the other technologies are not suited for bandwidths necessary for Internet TV. Furthermore, there are also problems with respect to the core network – as analysed in the section of the paper on technology. There will, therefore, be a large portion of users that will not have the possibility to access Internet connections sufficiently powerful for Internet TV at prices they can afford. From a user point of view there are thus good reasons for continuing and still developing the more traditional broadcast infrastructures. On the supply side there is an attentive attitude, both in the alertness and the awaiting sense of the word. There is alertness with respect to the market potentials in Internet TV while at the same time some hesitation as Internet TV is still in its earliest infancy. Operators are testing out the possibilities of Internet TV – in Denmark for instance TVropa – but success does not seem to be just round the corner. The technical quality is simply too low to attract a broader audience than nerds and people briefly passing by. It is, therefore, difficult to forecast the market developments on the supply side. However, one thing stands out as rather certain: that operators will seek to use a variety of communication infrastructures. TVropa is an example of this. The company is using the Internet as a transport media for its productions, but it is also trying to get a foothold into the new digital terrestrial transmission network in Denmark. The national plan is to have 4 digital multiplexes and TVropa tries to push for a political decision to assign one of the four multiplexes for Internet based companies. The idea is to create a platform for a multitude of Internet based companies to reach users of digital television. More traditional broadcast networks can be used to expand the outreach and the kinds of services offered by new Internet based companies. In the context of the present paper, this illustrates that companies will use a combination of different communication platforms to reach users, and the argument is not solely that companies seek to utilise all available means of transmission. The reason is also that different means of communication may be suited for different kinds of productions. Some productions are made for broad audiences, have a time critical character and are, therefore, well suited for more traditional broadcast networks. Other productions are directed at more narrow audiences or have other features (e.g. great interactivity) that make them more suited for communication via the Internet. Even if the technical quality may not be as good as the one possible via traditional broadcast, there may be audiences for special Internet TV productions both in more narrow geographical environments and worldwide. Regarding the future overall market structure in the environment of convergence between broadcasting and the Internet, the Danish ministries of respectively Culture and IT and Research have issued a report, ‘Konvergens i netværkssamfundet’ (Convergence in the network society)13, where three possible scenarios for market developments are depicted. The first one is called ‘a sea of information’ and describes a totally open environment where people seek information and entertainment from an open sea without any other 13 Kulturministeriet / IT- og Forskningsministeriet: Konvergens I netværkssamfundet, , 2001. 11
  • 12. restrictions than their own computer and network competencies. The second one is called ‘digital lagoons’ and deals with a situation where large operators – transnational media corporations – have taken hold of the means of communications inside encircled lagoons or ‘walled gardens’ and decide the content that people consume in closed packet solutions based on proprietary technologies. The third one is a status quo scenario where convergence is not really developing and where the media more or less continue as today. In the report, a combination of these scenarios is foreseen, and this also seems to be the most likely outcome. There will be information – and in our connection video productions of many different kinds – in a vast international sea available on demand for users with sufficient computer and network skills, and there will be more closed lagoons dominated by international media tycoons offering closed packages of video programmes. There are, consequently, potentials both for smaller communities and for large international media conglomerates to dominate. There are also blockages on the extent to which convergence will develop. Not in the sense - outlined in the third scenario - where nothing really is happening. But in the sense that different media have different production processes, cultures and traditions, and that media in the different areas have economic interests in pursuing the media path that they are already on - there is a certain path dependency. However, as with path dependencies in general, a hesitant attitude is not always an expression of an irrational resistance to change – although it may be. It can also be an expression of a lack of business possibilities in a change. But once business possibilities are really there, innovative operators will try out the new opportunities. This is exactly what is happening in the Internet TV area. As the technical situation is today, there are only possibilities for experiment-type explorations into the Internet TV field. However, once the technical conditions are improved, more and more operators will enter the Internet TV field. All market-based factors for the development of Internet TV thus point at a supplementation and not a substitution development. The different media opportunities will complement each other for a good number of years to come. 4. Political aspects Public service discussion has in many years purely concerned the content aspects of broadcast services, where access and infrastructure aspects have not been vital political problems. They have merely been simple solvable technical / financial problems. Emergence of other than terrestrial infrastructures for transmission of TV and in the recent years development of Internet TV have once again put the access and infrastructure aspect on the political agenda. Internet’s ability to deliver broadcast TV and other video services have been analysed at technical level previously in this paper. At a technical level it is concluded that Internet TV cannot replace the traditional broadcast TV. There are, however, also important political parameters that tell in favour of keeping dedicated infrastructures for broadcast services. One of the major political issues, mainly in European countries, is development of Public Service broadcasting and protection of national interests: Cultural, language related, and 12
  • 13. also economic competitiveness of the nation. As seen in the following, the most optimal conditions for development of Public Service broadcasting is realised when they are available in the traditional broadcasting infrastructures and especially in the terrestrial infrastructure. Terrestrial resources are scarce and valuable for different uses. The question is then which platform enables the most optimal conditions for development of broadcasting including public service broadcasting. And to what degree it can be justified to continue assigning terrestrial frequencies for broadcast purposes. Terrestrial TV is still an attractive network both regarding development of public service and broadcast market as such. This is both looking at terrestrial TV networks as supplement to other networks - to maintain national coverage - and also looking at terrestrial TV networks as a competing infrastructure with specific advantages like reception simplicity, national coverage, and also possibility for portable and even mobile reception. Terrestrial TV is still the cheapest way to cover the whole population by Digital TV. In a study of Digital TV in Denmark, where penetration of cable TV is about 70%, it is showed that to cover the remaining 30% of population by cable TV it requires over 1 bill. DKr. This must be seen against a cost below 200 Mill. DKr. to establish one multiplex block covering the whole population with terrestrial network. To fulfil one of the important political goals, namely establishing the possibility to access public service broadcasting for all population, it is important that Public service is available in whichever infrastructure the consumers use to access TV services. This has been maintained through ‘must carry’ rules within cable TV and through agreements between satellite providers and public service stations in satellite networks14. Terrestrial TV has other advantages seen from a national regulatory point of view, primarily focusing on possibilities for national markets. In the light of current development, terrestrial broadcasting is the only infrastructure that is likely to continue to be regulated at national level. This is important both seen from public service development perspective and regarding strengthening the national competitive market. It is, however, important to mention that that the thinking presented here is in line with the policies deployed in the majority of European countries, where either digital terrestrial broadcasting is established or there are detailed plans for that. Also assignment of comparably substantial resources to public service in these plans shows that the European countries see at terrestrial network as an important network for development of broadcasting15. 14 Must carry in analogue satellite broadcasting was not so important as people could use their regular antennas to access public service stations from satellite network. In digital satellite TV, however, the problem is vital, as accessing terrestrial signals require additional set-top box. Here if market agreement between satellite providers and public service broadcasters does not work a similar ‘must carry’ rule can be necessary. 15 Also in the US market terrestrial TV resources are assigned for digital TV broadcast. The emphasis in Europe is on development of public service broadcasting, where in the US it is more to strengthen the local broadcasting. It is important to mention that the US public broadcasting considers terrestrial digital network as an important network and is a part of the digital future. See among others: Reza Tadayoni: Political economy of digital broadcasting, Ph.D. Thesis, CTI, Technical University of Denmark, November 2000. 13
  • 14. Liberal politicians have been claiming that Internet TV can replace traditional terrestrial TV, couching themselves in words of modernity and future orientation. Furthermore, the policy advocated is to redefine public service from a support for institutions – public service broadcasters – towards a support for public service productions. Both points of view will, in reality, undermine public service in broadcasting. The special position of public service broadcasting relies to a great extent terrestrial broadcasting and the ease of access to this system. And, although public support for high quality programmes may be a commendable policy and can easily be combined with support for institutions, support solely for programmes instead of institutions will also lead to a ‘disappearance’ of public service in broadcasting, as the institutions that uphold the tradition of public service quality will be dissolved. Countries will lose institutions that organise national quality programme production. Development of traditional infrastructures cannot be seen as a barrier to development towards broadband and Internet TV, that also are on the political agenda. On the contrary the possibility of provision of Internet through broadcasting infrastructures, including terrestrial infrastructure, enables the part of population who are not familiar with PC to access Internet through their TV receiver. This is, however, a sub-set of the Internet, but by organisation of resources in an efficient way it is possible to cast the most wanted and demanded Internet services through broadcasting infrastructures. 5. Conclusion As seen in this analysis, keeping every thing else equal, and looking at capacity as the only parameter, none of the current infrastructures can meet the requirements needed to be the platform for delivery of Internet TV services as a substitute for traditional TV networks. Every thing else is, however, not equal and, as seen, considering other parameters in the analysis underline even more that total service integration will, at best, be a long-term vision. The solution in current situation can be at the one hand to upkeep the current competition between different platforms, and at the other hand to utilise synergy between networks to utilise the strength of different networks. In this way different components of the same service can, e.g., be transported over different networks. This organisation of network resources can be totally seamless for the end-user and seam like a single integrated network. In the section on market aspects, it is discussed whether the most likely development scenario is an ‘open sea’ of information and entertainment, closed ‘lagoons’ or a status quo. It is concluded that elements of all three scenarios will be found in future developments, however, the development towards closed lagoons is likely to be a strong development trend. The development in the digital broadcasting and Internet TV has pointed towards internationalisation of markets, where the scarcity of content / talent, scale and scope economies, and the huge consumer base on the international market, once again tend to lead to concentration of the available resources in the hands of few actors, this time on the international market. The increased transmission capacity is in this way not likely to 14
  • 15. result in greater variety, but will contribute to strengthen the market position of these few actors, who operate beyond the frameworks of the national regulations. This may be seen as giving possibilities to create terrestrial network in especially the small countries. If states create competitive markets at a national level, the national actors, including public service broadcasters, are given the possibility to survive on these niche markets. The national actors can then continue to develop programming that reflect the wants and needs of citizens in the small nations, basing their programs on a cultural political agenda rather than the international profit maximisation agenda. 6. References [0] Danish ministry of culture: DVB – Future of TV, Report from working group on introduction of terrestrial digital TV in Denmark, 1998 [0] Danish ministry of culture: Alternative distribution forms for digital TV, Report from working group on digitalization of terrestrial TV network in Denmark, 2000 [3] Forskningsministeriet: Fra isenkram til indhold – Strategi for hurtigt, billigt og sikkert internet til hele Danmark (From hardware to content – Strategy for fast, cheap and secure Internet in all of Denmark), 2001. [4] Kulturministeriet / IT- og Forskningsministeriet: Konvergens I netværkssamfundet, , 2001. [5] Dambacher P.: ”Digital Terrestrial Television Broadcasting- Designs, system and operation”, Springer, 1997 [6] Reza Tadayoni: Political economy of digital broadcasting, Ph.D. Thesis, CTI, Technical University of Denmark, November 2000. 15