John Fairfax Holdings Limited
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Fairfax Submission to HDTV Format Standards Review

How fast Australians switch to digital TV will depend on how compelling they find the services it offers and whether or not they are willing to pay for the equipment needed to access these services. Ensuring that Australia adopts a HDTV format standard which allows use of a world standard DVB set top box (STB) is crucial to ensuring the success of digital TV in Australia.

Australia should adopt MPEG 2 main profile @ main level (MP@ML) as the transmission standard for both SDTV and HDTV. MP@ML can provide the "near studio quality" video required of HDTV while ensuring set top box compatibility with existing cable and satellite pay TV services. The adoption of MP@ML is essential to allow Australian consumers to access relatively inexpensive world standard DVB set top boxes and Australian manufacturers to produce set top boxes for the world market.

The proposed adoption of the FACTS production standard of main profile @ high level (MP@HL) with Dolby Digital as the transmission standard for HDTV risks marginalising Australia as a digital TV backwater with unnecessarily expensive set top boxes which are incompatible with the Australian pay TV industry and the rest of the world.

WORLD STANDARD STBS ARE ESSENTIAL TO THE SUCCESS OF DIGITAL TV

For digital TV to succeed in Australia, the Government and Industry need to ensure that Australians will gain access to a compelling range of new services and features at a reasonable price. Consumers will weigh up the value of the digital TV consumer offering against the cost of the equipment in deciding whether to convert to digital.

Fairfax is committed to the success of digital TV and datacasting and is concerned to ensure that Australia gets both sides of this consumer equation right. Fairfax’s datacasting and national broadcaster multi-channelling submissions have focussed on facilitating a compelling range of new services. This submission focuses on ensuring that digital TV equipment, particularly the set top box, is reasonably priced.

The best way to ensure a reasonably priced set top box is to avoid unnecessary complexity and to ensure that Australians can use the same set top box as is used in major markets around the world and in satellite and cable TV services in Australia. This means a world standard MP@ML set top box.

It is essential to get the transmission standard for HDTV right because it dictates the requirements of the set top box, not just for HDTV, but for all digital TV uses, including datacasting. This is because only one digital TV signal is broadcast. That signal must be received and decoded by the receiving unit (which will either be a set top box or integrated with the screen) and then converted into a picture suitable for the particular screen used.

If MP@HL transmission is adopted, the receiving unit will require more complex and expensive circuitry to decode the MP@HL signal than would be required for MP@ML. Furthermore, set top boxes that decode MP@ML are already the world standard and are available relatively cheaply, while MP@HL receiving units will have to be made especially for the small Australian market. Consequently MP@HL receiving units will be more expensive than MP@ML units.

In addition, the FACTS proposed MP@HL transmission standard includes another element which will increase the expense of the set top box and guarantee that Australia is incompatible with the rest of the world. FACTS proposes to transmit only a Dolby Digital (AC-3) sound stream and not the standard MPEG stereo sound stream with the MP@HL signal. This means that Australian receiving units will have to include additional complex and expensive circuitry to decode the proprietary Dolby Digital signal. No other country which uses the DVB standard has adopted a Dolby Digital only approach.

Finally, the adoption of MP@ML as the transmission standard will allow the same set top boxes to be used for digital terrestrial TV as are used for satellite and cable pay TV. MP@ML set top boxes are already being used for satellite TV distribution by Optus Vision, Foxtel and Austar. Ensuring consistency between the transmission standard for pay TV and terrestrial TV brings a range of benefits including:

• consumers will only need one set top box rather than two, with commensurate cost savings;
• digital TV take-up will be enhanced because many consumers will already have compatible set top boxes;
• regional broadcasters who carry signals via cable and satellite will not have to deal with difficult conversion issues.

THE VAST MAJORITY OF CONSUMERS WILL SUFFER IF MP@HL IS ADOPTED

The Government’s own forecasts (attachment 1) recognise that the number of consumers purchasing (attachment 1) HDTV sets will be extremely limited (4% of digital receivers TVs in 2005). The other 96% of consumers converting to digital will purchase either set top boxes to display the digital signal on their old analog TV (60%) or standard definition digital TVs (36%).

Consumers using either set top boxes or standard definition TVs will have the MP@HL signal down-converted to a standard definition picture and thus will not gain any picture quality enhancement from MP@HL as compared to MP@ML. In fact, as noted in the Discussion Paper, because less error correction can be included in a MP@HL transmission, consumers at the edges of coverage areas may get a worse picture if MP@HL is adopted. But, despite this, consumers will be paying significantly more for their digital TV equipment because it will have to decode the more complex MP@HL signal.

A similar issue occurs in relation to Dolby Digital. Most consumers will not have access to a 6 channel amplifier and 6 high quality speaker to take advantage of the 6 channel Dolby Digital sound stream. But because FACTS’ proposed MP@HL transmission standard does not include a standard MPEG stereo sound stream, the set top box or SDTV will have to decode the 6 channel Dolby Digital signal and then down-convert it to stereo (or mono) in order to play it through TV or normal Hi-Fi speakers. Dolby Digital is a proprietary standard for which the decoding circuitry must be licensed from Dolby. This will again mean that the vast majority of consumers are paying extra money for features that they cannot use.

Furthermore, FACTS stated reason for refusing to include a standard MPEG stereo sound stream is that they need the full 20Mb/s of capacity for transmission of MP@HL. If MP@ML is adopted as the transmission standard then broadcasters will have sufficient bandwidth to transmit both Dolby Digital and MPEG stereo sound streams.

The adoption of MP@HL transmission is not required to provide HDTV. By down-converting the production quality MP@HL signal to MP@ML prior to broadcast and then up-converting the transmission in the HDTV set, high quality, high definition pictures are obtained which are subjectively equivalent to what would be obtained from a MP@HL transmission. Indeed, technical studies in Europe have shown that a down-converted / up-converted high definition transmission has better noise performance than a MP@HL transmission.

As recognised by the Discussion Paper, there are a range of picture qualities available within MP@ML ranging from 4Mb/s PAL quality to 15Mb/s "near studio quality." This means that high definition programs broadcast at the near studio quality level will be significantly higher quality than normal standard definition programs broadcast at lower bit rates.

In any case, as recognised in the Discussion Paper, most program material will be in standard definition format and will have to be up-converted to for display on a HDTV set. This up-conversion can either take place prior to broadcast, or in the HDTV set itself. While there may be a slight quality trade-off in up-converting at the HDTV set, if expensive studio quality electronics are not used, surely it is better to put that decision in the hands of the few wealthy consumers able to afford a HDTV set than to impose extra costs on everyone.

The adoption of MP@ML transmission will also encourage datacasting in a number of ways.

Firstly, world standard MP@ML set top boxes generally have the conditional access and data port / modem options which will be needed for datacasting. This will provide a ready platform for datacasters to provide innovative multimedia services which will encourage the take-up of digital TV.

Secondly, because transmission of MP@ML will only use up to 15Mb/s of the 20Mb/s available on a digital TV transmission, broadcasters will be able to use the remaining 5Mb/s for datacasting even when showing high definition programs. This will both provide a greater range of datacasting services and will encourage the broadcasters to ensure that set top boxes are capable of datacasting.

The choice between MP@ML and MP@HL as a HDTV transmission standard is clear. MP@HL provides slight quality benefits to a few privileged consumers at the expense of the vast majority who will pay substantially more for circuitry they don’t need. MP@HL will guarantee that Australia is not able to use world standard set top boxes, that free to air and pay TV systems will be incompatible and that datacasting will be stifled. MP@HL will guarantee a closed shop for FTA broadcasters and marginalise Australia as a digital TV backwater. In order to prevent this happening the Government must mandate MP@ML as the digital TV transmission standard for both standard and high definition TV.

- Ends -

12 February, 1999

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