The Government will have to think seriously about revisiting its appalling legislation on digital television before too long. It was obvious at the time the legislation imposed unnecessary restrictions on digital television technology and now that digital has arrived it is apparent that consumers are voting with their wallets.
The Government’s mistakes were to impose high definition television on the three commercial and two public networks; to prevent any significant multi-channelling which the technology is ideally suited to and to restrict the way datacasting can be used, even though the technology would allow huge datacasting innovation.
The requirement for high-definition, rather than standard-definition, digital was at the behest of the three commercial networks. With high-definition, only one program can be transmitted at the time, with some minor enhancements. It means the commercial networks could concentrate their production costs and their advertising revenue. The Government obviously did not want to offend the commercial networks. If standard definition had been chosen, the five networks could each have delivered four or five different programs at the same time – increasing choice and diversity.
High definition also requires very expensive television sets – up to $20,000 a piece. One can buy a converter to play the signal on existing boxes (at $7000), but why bother if all you are going to get is the same five network programs as now, with precious little else, and if the screen will in effect be smaller because the top and bottom will be cut to fit the digital format.
The US and Europe have rejected high-definition in favour of standard definition so the high-definition sets will remain costly because manufacturers cannot get the economies of scale in such a small market as Australia.
One other reason for buying digital sets has also be cancelled by the government. Consumers might have gone digital to get the benefits of datacasting – television quality internet services with text, still pictures graphics and video – but the restrictions imposed by the Government to shelter the commercial networks from competition have made it not worthwhile for datacasting companies to set up.
Under the Government’s regime there is simply no reason for consumers to take up digital television. The benefits – educational, economic and social – have been denied to Australians by the Government’s desire to pander to narrow commercial interests. The policy flies in the face of the Government free-market stand. In any other market, existing players would have to bear the effect of new technology themselves.
Australians would do well to hold off on digital until the Government comes to its senses. The Government should allow the networks to choose which form of digital to broadcast and let the market and the consumers decide. That philosophy is held dear by the Government in nearly every other form of human endeavour (often inappropriately because some things need government intervention). However, in the field of television it imposes a level of regulation more suited to a communist state or the 1950s.
Australians usually take up new technology quickly. Television itself, colour television, mobile phones, VCRs and the internet itself are good examples. But they do because they see value in it. The slowness of digital-television take-up shows they see little value. In fact, they suspect they are being sold a pup. The Government has been caught out.
And the longer the Government leaves a revision of its policy, the more foolish it will look. It is likely that telecommunications companies will offer a huge range of telecommunications services quite cheaply over cable. In the ACT, Transact is starting now. As that happens there will be even less incentive for consumers to take up digital television under the high-definition model. Australia will be broadcasting a super-high-quality signal that virtually no-one needs and virtually no-one can afford to receive.