Hopes for the provision of free-to-air television over the National Broadband Network (NBN) have been dealt a blow by Free TV Australia, the body representing Australia’s commercial free-to-air (FTA) television broadcasters.
In its submission to the NBN Co’s Proposed Wholesale Fibre Bitstream Products consultation paper, Free TV Australia said it did not support the inclusion of a radio frequency (RF) video layer for the provision of television services on the NBN as it was likely to give rise to significant competition and access issues.
In the submission, Free TV Australia chief executive officer, Julie Flynn, said the body understood that the most commercially viable and cost-effective model for an RF layer would involve the delivery of a single subscription service, managed by a single subscription service provider.
The assignment of capacity for the delivery of television services to a single player, however, had the potential to limit competition in the provision of television and television-like services over the NBN, Flynn wrote.
“Such a provider would have no incentive to negotiate openly with other providers, such as FTA broadcasters, who could be blocked from making their services available on the NBN,” the submission reads.
“Such a provider is also likely to gain unacceptable market power arising from the ubiquity of its service and control over the content that might be provided on the RF layer. The inclusion of an RF layer on these terms would not be consistent with the NBN Co’s stated objectives of delivering a level competitive playing field and promoting maximum end-user choice in terms of both services and providers.”
Flynn wrote that advice taken by Free TV Australia indicated that the technology required to make the RF layer an open and accessible platform would be prohibitively expensive as it would require additional exchange equipment and customer premises equipment.
“It would appear therefore that the inclusion of an RF layer on these terms would not be consistent with the NBN Co’s stated objectives of delivering cost-effectiveness and a commercially viable network,” Flynn claimed.
“Access to the NBN for the delivery of television services should be consistent with the underlying Government objectives for an open, wholesale-only NBN providing pricing and access equivalence. It appears unlikely the provision of an RF layer would achieve these objectives.”
Telco analyst Paul Budde has previously argued that the addition of RF video to the fibre-to-the-home (FTTH) network will add an extra $100-150 per connection, or about $1 billion for the whole NBN.
"The question that then needs to be asked is whether it is necessary to spend this extra money. Free-to-air TV is currently widely available, if not via the terrestrial network then via satellite,” Budde said. “As we speak, some very large investments are taking place to upgrade this network to digital TV, so for this purpose one could argue there is no need to facilitate free-to-ait TV over the FTTH network.”
The Free TV Australia’s submission is one of about 50 received by the NBN Co. It did not make any reference to using another approach to providing video services over the network: IP multicasting.
Telstra, however, said both should be supported for Pay TV purposes in its submission.