Government Launches Public Tender for Digital Terrestrial Television

Bids must be submitted to the Portuguese telecommunications regulator (Instituto das Comunicações de Portugal, or ICP) in CD-ROM(1) format by June 15 2001. They must include a technical and an economic and financial plan.

The public opening of the bids shall take place on June 18 2001, after which they shall be appraised by a government-appointed tender commission. The commission will draw up a list that classifies the bidders by August 6 2001, although this deadline may be extended.

Bids will be evaluated according to the following criteria, which are weighted in order of importance:

• contribution to the development of the information society and to the rapid pervasiveness of DTT (35%);
  
  
• quality of the technical plan, including the promotion of inter-operability (25%);
  
  
• contribution to the development of a duly sustained economic activity (20%);
  
  
• promotion of a competitive and innovative offer, with the rights of consumers guaranteed (9%);
  
  
• quality of the economic and financial plan (6%); and
  
  
• general coherence and quality (5%).

Because this new platform will constitute an alternative to the existing distribution networks, the tender regulations prohibit direct or indirect participation in the share capital of the bidders by companies that directly or indirectly hold a participation in an entity that has a 50% or higher market share in the cable television business, or by companies that are held by any such entity. This means that the incumbent operator - Portugal Telecom - is not allowed to participate in the share capital of any bidder, as its subsidiary - TV Cabo Portugal - holds a share of more than 90% of the cable television market.

The licensed operator must guarantee 30% coverage of the national territory by the end of the first year, beginning from the later of either the granting of the licence or the commencement of activities. Guaranteed coverage must reach 60% by the end of the second year and 95% by the end of the fifth year. In the case of the Azores and Madeira, 60%, 75%, 85% and 95% coverage must be achieved by the end of the first, second, third and fifth years respectively.

DTT represents a new distribution network for television signals, using the pan-European norm DVB - digital video broadcasting - in its terrestrial version (DVB-T). This means that the television signal is distributed by hertzian transmission, via aerials, as is the existing analogue network.

This new network will substitute the existing analogue network. The reception of digital television signals will therefore involve the re-conversion of television receivers. However, consumers will not be obliged to adapt or replace their television sets immediately, since a transition period (during which both analogue and digital television will be broadcast in a process known as simulcast) is planned until 2007, during which the existing broadcasting network will be maintained.

Citizens will be guaranteed free and open access to the existing national channels in mainland Portugal and the national and regional channels in the Azores and Madeira. In addition to these channels, DTT will also enable new channels to be received, with high sound and image quality, plus other television and telecommunications services (eg, tele-shopping and Internet). DVB-T technology also makes it possible to rationalize the use of the radio spectrum and achieve national coverage, thus giving all citizens access to the specific functions of interactive television.

For further information on this topic please contact Margarida Couto at Vieira de Almeida & Associados by telephone (+351 21 311 3400) or by fax (+351 21 354 89 39) or by e-mail ([email protected]).

Endnotes

(1) Compact disc read only memory