Poznań Media Expo Conference 2014 TV Day - The future of terrestrial television in Poland The 700 MHz Band The impact of UHF spectrum reallocation on TV markets in Europe Darko Ratkaj European Broadcasting Union 09 April 2014

Consumer demand for TeleVision Television is the medium used most by Europeans: 87% say they watch it every day or almost every day and 97% at least once a week. Standard Eurobarometer 80, November 2013 In 2012 every person in Poland watched on average 4 hours and 3 minutes of linear TV a day. 2.7 mil. households (8 mil. viewers) in Poland use DTT to access TV services.

Non-linear (OTT, HBB, VoD) Evolution of linear and non-linear TV viewing Average in the EU ‘Big 5’ Non-linear (OTT, HBB, VoD) Linear TV Source: IHS – ScreenDigest: Cross-platform Television Viewing Time FY 2012

how is consumer demand for TV satisfied? TV reception by households Sources: EU - Eurobarometer 396, Aug. 2013 Poland – IHS, ScreenDigest Note: Adds to more than 100% as households may use more than one platform. % HH

The current role of DTT Free-to-air, live viewing Near-universal coverage (in many countries >98% of the population) Primary TV platform for 230 million viewers in the EU (46% population) More than 2000 TV channels in the EU (national, regional, and local) Efficient way to serve large audiences, affordable Key platform for Public Service Media Coexistence of Public Service and commercial TV (both FTA and pay-TV) Synergies with other platforms (HbbTV, catch-up TV, second screen) Ensures market competition and consumer choice Resilient, essential infrastructure in emergency situations These benefits cannot easily be replicated on other platforms.

ebu views on terrestrial broadcasting EBU – Recommendation R 131 Terrestrial Broadcasting in Europe tech.ebu.ch

market demand for dtt 22 channels in Poland Source: Mavise TV database

Why is the 700 MHz important?

on spectrum management Spectrum allocations are a result of international negotiations (e.g. within the ITU and the CEPT) Frequency bands are divided amongst different radio communication services (e.g. broadcasting, mobile, aeronautical, satellite, ...) The actual use of the spectrum is decided nationally It must be in accordance with the allocations in a given frequency band In some cases bilateral coordination is required before the frequencies can be assigned to users Harmonisation of the spectrum use is beneficial easier coordination and cross-border operation easier interference management economies of scale ... Two-step process

THE uhf BAND ALLOCATIONS 470 MHz 862 MHz 21 30 40 50 60 69 Broadcasting 2006 700 MHz 800 MHz 500, 600 MHz 470 MHz 862 MHz 21 30 40 50 60 69 Broadcasting 790 MHz 61 BC + Mobile 2007 X 470 MHz 862 MHz 21 30 40 50 60 69 Broadcasting 790 MHz 61 BC + Mobile 48 694 MHz 2012 470 MHz 862 MHz 21 30 40 50 60 69 790 MHz 61 BC + Mobile 2015 ? 694 MHz 48

the impact of the loss of the 700 MHz band on terrestrial broadcasting Direct impact (short to medium term): Transitional issues to free the band from DTT costs for broadcasters and the viewers risk of disruption of services Loss of 30% of the bandwidth capacity (43% if the 800 MHz band is taken into account ) reduced platform capacity reduced scope for future development None of this is in the interest of the European audiovisual industry or the consumers! Indirect impact (long term): Weakened DTT platform; less competition Negative signal about the future of DTT lack of certainty for future investments no innovation; risk of decline, end of DTT loss of the only free-to-air platform with potentially universal reach Not the same in all countries!

Questions for the regulators How important is DTT in your country? penetration – how many households are receiving terrestrially market potential – how much content is needed for a viable DTT Public value of DTT is there awareness amongst decision makers how is the pubic value protected and promoted National audiovisual media policy is there a commitment to Public Service Broadcasting and Free-to-Air which infrastructure will support the public policy objectives what is the development roadmap for this infrastructure Are there any alternatives to DTT can they deliver the same benefits when will they be available at what costs how to migrate the audiences These questions must be raised and answered before any decisions on the radio spectrum are taken!

recommended approach to decide on the 700 MHz band De-couple the decision on the actual use of the 700 MHz band in Poland from the ITU process leading to mobile allocation Scrutinise the mobile spectrum requirements before considering any additional spectrum allocation Verify the assumptions about future demand How much traffic growth is economically viable? The use of the already allocated spectrum Cost / benefit analysis to be done before taking a decision Overall social and economic impact of the change Incremental benefits of using the 700 MHz band for mobile services? Take the necessary time to prepare the decision, there is no urgency Mobile industry is busy deploying networks in the 800 MHz band Lack of demonstrated market demand for more UHF spectrum There are number of ways to increase mobile network capacity without additional UHF spectrum

in the event of re-allocation of the 700 MHz band to mobile Ensure ... Planned and well managed transition process Realistic time frame for freeing the band from DTT transmissions Recovery of the costs incurred by broadcasters and the viewers Replacement capacity for the affected DTT services Replacement capacity for the affected PMSE services (wireless microphones currently operating in the band) Protection of DTT and PMSE services below 700 MHz from the mobile interference Long-term availability of the remaining part of the UHF spectrum for broadcasting services to facilitate future development Continuation of free-to-air TV services Access to the new mobile broadband platform for public service media

thank you for listening to me! questions? Darko Ratkaj ratkaj@ebu.ch

Additional information

Costs of distribution of media services The Internet Costs of distribution of media services Costs Broadcast platforms Number of concurrent users

progressive QoS degradation Capacity available to individual users Capacity per user Broadcast platforms progressive QoS degradation Minimum capacity required for a given service The Internet Number of concurrent users

Data volumes delivered via DTT compared to the Internet. Cisco VNI 2012: Broadband traffic forecast in the EU PB/month The total amount of data delivered via DTT networks in 2012 Broadband networks are not capable of taking over a substantial part of services (and audience) that are currently delivered over terrestrial broadcast networks. This is because of their: - insufficient capacity - incomplete coverage - too high costs Data in this slide data represent the following: 1. Fixed broadband traffic as predicted by Cisco VNI 2012 for Western Europe (http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-481360.pdf). 2. Mobile broadband traffic as predicted by Cisco VNI 2013 for Western Europe (http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.pdf). 3. The data volume delivered via DTT networks in 2012 is based on the following assumptions for terrestrial broadcast networks: average TV viewing: 4 h /day per household in the EU27 countries: 120 mil households receive terrestrially 1 hour of SDTV @3 Mbps => 1.35 GB 1 hour of HDTV @7 Mbps => 3.15 GB mix of broadcast programmes in 2012: 80% in SD, 20% in HD In reality the DTT traffic has not been delivered in a unicast (one-to-one) mode and therefore cannot be directly compared with broadband traffic. However, if the same TV services had been delivered over one-to-one connections (instead of DTT broadcast) the equivalent traffic would have been: 24624 PB/month

How much video content is delivered over broadcast networks compared to the Internet? http://www.marketingcharts.com/wp/television/how-tv-and-online-video-consumption-stack-up-36594/

http://www. marketingcharts http://www.marketingcharts.com/wp/television/are-young-people-watching-less-tv-24817/

http://www. marketingcharts http://www.marketingcharts.com/wp/television/how-much-tv-is-being-time-shifted-26229/

http://www. marketingcharts http://www.marketingcharts.com/wp/television/mobile-viewing-remains-a-fraction-of-total-tv-hours-30058/