MOODBOARD Y CONCEPT ART

Eircom believes that the European Commission’ s intention to apply the same regulatory obligations to all delivery systems is contradicted by its refusal to deregulate the cable local loop network across all Member States Eircom contends that ‘there can be no justification for communications regulation which favours cable over copper or which

prevents cable network operators or telecommunications network operators from providing converged services’ (Stanton, 1999 http) As Ireland has a higher than

European level o f cable penetration across most households, the decision not to mandate open access across all cable networks may create further market distortions between cable, A D SL operators and terrestrial multiplex broadcasters

According to O’Halloran (McCann-Fitzgerald), if the cable network operator is forced to open their digital delivery system, the consequences for public service broadcasting are significant If a domestic multiplex broadcaster were to have access difficulties with a cable operator, they could complain to the national regulatory agency on the basis o f the operator not fulfilling their ex ante obligations For example, a public broadcaster could allege that the refusal by the cable operator to carry all or part o f their multiplex signal would create an unfair competitive advantage for other content providers The same kind o f competition issues that surround the current licence fee debate on whether public funds can be used by the public broadcaster to ensure that their digital services are received on the cable network In this instance, the cable network operator could be accused o f using its market power to distort competition against the terrestrial multiplex broadcaster Effectively broadcasters could ensure non-discrirmnatory access to their digital services over cable and telecommunications delivery systems by upholding the competition principles o f the Treaty o f Rome (1957)

Conclusion

While the pace o f liberalisation in the telecommunications field is proceeding at a faster rate then m the broadcasting sector, the telecommunications and cable networks will soon become identical in the provision o f interactive television and telephony services This is reflected in the ODTR’s claim that ‘cable is a cornerstone o f future competition [with

V -V- X

O D T R R e g u l a t i o n

Eircom] m telephony and the provision o f interactive services in urban areas’ (1998a 4)

-s

Its growth as a digital medium is also required The cable network is the regulators preferred delivery system to compete with the fixed line network in the residential voice and data telephony market

However, the ODTR fails to recognise the capability o f digital terrestrial broadcasting to compete with both systems m the delivery o f voice telephony and interactive television content This failure will prevent the digital terrestrial network from offering its own high speed Internet, telephony and asymmetrical interactive services In these early stages of digital broadcasting, the ODTR will regulate the terrestrial network as a one-way, linear transmission medium It is difficult to imagine how the ODTR will regulate each delivery system equally when the digital terrestrial system is immediately disadvantaged by such regulatory actions

The digital multiplex broadcaster will need to apply for a licence for the transmission o f multiplex television content as well as a separate telecommunications licence for the provision o f two-way interactive television, telephony and World Wide Web services The terrestrial broadcaster will have to compete with mobile telecommunications operators for this additional radio spectrum Requests by multiplex operators for a two- way return path to complement the full range o f digital terrestrial services may be challenged by mobile telephony operators who also require radio spectrum to expand their own services This means that the multiplex broadcaster, like RTE or TV3, will have to compete for a telecommunications licence under the same commercial terms as any other telecommunications network operator The ODTR will decide the regulatory terms for this mobile telecommunications licence

Accordingly, it is important to recognise that digital terrestrial broadcasting is capable o f providing telecommunications services as well as broadcast content Public broadcasters can justifiably claim that an asymmetrical broadcasting service is imperative for the provision o f digital public services While the Broadcasting Bill (1999) does not explicitly accept that the digital broadcast system can offer a full range o f

telecommunication services, each public multiplex broadcaster, like RTE, will not be prevented from acquiring a terrestrial bandwidth for two-way interactive services The success o f digital terrestrial broadcasting will depend on the ability to develop mobile data, interactive television and telephony services (Baldi, 2000)

In keeping with the European Commission’s ruling on the opening o f the fixed line delivery system, the ODTR will allow the national telecommunications operator to provide broadcast content as a quid pro quo for the unbundling the fixed line local loop network The ODTR anticipates that such deregulation will introduce more competition to the delivery o f television, high speed Internet and telephony services over the cable and telecommunication networks As this broadband market evolves, the ODTR will try to create an environment where independent content providers are able to access these networks m a fair and non-discnmmatory manner

When the digital cable network is fully operational, its dominance in urban areas may compel the soon-to-be appointed Commission for Communications Regulation to apply the regulatory policy o f significant market power This means the national Commission will attempt to prevent the market dominance o f the broadband network operators, like Eircom and NTL, over emerging independent digital services and content suppliers, like TV3and RTE The European Commission’s ruling (Commission o f the European Communities, 2000) on opening the fixed line network to independent telephony and content suppliers will be applied to any digital cable operator portraying signs o f market dominance This will ensure that terrestrial multiplex content is earned on the cable system and made easily available to the consumer It will allow other cable and ADSL service providers to access viewers who were formerly under the exclusive control o f an incumbent cable operator In the telecommunications medium, unbundling the fixed line local loop will provide each multiplex broadcaster with the option o f using an A D SL up­

stream network as a two-way, interactive return channel source

In the B B C ’s opinion, each digital platform will be regarded ‘as an individual market within its designated area’ (BBC, 2000a http) This means that the development o f each

O D T R R e g u l a t i o n

distribution system will be exclusively aligned to their own digital services and set-top box receivers It will not be in their commercial interests to deliver a supply of

independent content services that are not related to their bundled multichannel and telephony packages For example, vertically integrated networks may use their dominance over one part o f the market, like telephony, to gam control over a related market, such as the delivery o f public service multiplex content In the short term, the bundling o f telephony, Internet services and interactive multichannel television will be to develop electronic barriers m accessing public digital services

Unbundling the local loop on each delivery system is crucial to the growth and

innovation o f digital services For the digital multiplex broadcaster, like RTE, unbundling the local loop has the same level o f importance as ‘must carry’ obligations for public broadcasting services Without agreement on the accessibility o f public service content on all delivery systems, each consumer will be faced with considerable costs in switching from one distribution network to another This will force the customer to choose between network operators who may or may not carry public Free-to-Air multiplex services If these digital delivery systems do carry the public service multiplex, access will be conditioned by the individual’s ability to pay Without the digital terrestrial platform, access to interactive content will become a commodity created for the personal use o f the consumer Interactivity will respond to the interests o f the marketplace rather than increase citizen access to digital broadcasting services Therefore the brake-up o f the terrestrial transmission monopoly will place political pressure on RTE, as the public broadcaster to make sure that all citizens receive the full array o f public multiplex services, regardless o f the delivery system

Figure 17 Digital Terrestrial Broadcasting Developments in EU Countries"

99 Source Baldi (2000), ID ATE (2000), Ronan Callanan

O D T R R e g u l a t i o n

MHEG-5 Media-Guard Unknown YES Plans 2nd

STB with