The chairman of the French broadcast regulator has issued a report on the future of digital terrestrial television (DTT). The report focuses on the competitive landscape for DTT, legal challenges to the so-called "bonus channels," the need for more efficient broadcasting, and even future spectrum needs.
Michel Boyon of the CSA, the French audiovisual authority, prepared the report at the request of France’s Prime Minister. The CSA delivered the report to the Prime Minister in August 2011 but it was only made public for the first time on September 12, 2011.
The title of the opening section provocatively characterizes DTT as an economic sector "fluctuating between stability and stagnation" (translated). That section touches on sensitive questions such as whether there is a viable business model in France for subscription DTT channels and whether the launching of a free DTT over-the-air channel by France’s pay-TV giant Canal+ might create competitive distortions. A related question later in the report focuses on the optimum number of channels – France currently has six DTT multiplexes in operation, and two additional multiplexes, called R7 and R8, are ready to be launched in the near future.
Another section discusses the compatibility between current French broadcasting policy and European law. It focuses on legal uncertainties associated with the so-called “bonus channels” that incumbent over-the-air broadcasters were promised as compensation for shortening their analogue license terms as part of the shift to DTT. The 2007 French law on digital television provided for these bonus channels, but was quickly challenged before the European Commission as incompatible with parts of the EU Electronic Communications Regulatory Framework, as well as constituting an illegal state aid (that is, subsidies). The issues are still in play, and the European Commission is likely to adopt its definitive findings on the controversy later this month. Depending on the European Commission’s findings, France may or may not proceed with the award of these bonus channels to incumbent broadcasters Canal+, TF1 and M6. The CSA report recommends that French Parliament should promptly amend the 2007 law to eliminate the bonus channels if the European Commission finds that they are incompatible with European law.
The CSA report also discusses the need to migrate to more efficient broadcasting and compression technology, in order to optimize use of spectrum resources. It emphasizes that all French DTT channels will eventually migrate to high definition (HD) on a non-discriminatory basis. As regards 3D programming, the report indicates that the technology is still insufficiently mature and that 3D will not be rolled out over DTT in the near or medium term.
The report urges a migration as soon as possible to the MPEG-4 compression standard, which is currently used for HD channels in France but not for standard definition (SD) channels. The report suggests that all DTT channels should be using the MPEG-4 standard by 2015 to 2016. It also urges migration to the more efficient DVD-T2 broadcasting standard as soon as possible. To explain the difference between the compression standard and the broadcasting standard, the report uses the analogy of paper messages transmitted through a pipe. According to the report, the broadcasting standard defines the size of the pipe. The compression standard defines how the paper is folded before it is put into the pipe.
Finally, the report mentions that according to most stakeholders, a second “digital dividend,” i.e., taking a second set of frequencies from broadcasting to devote to other services, will not be necessary to meet the needs of mobile data usage until the year 2020. Until then, the mobile industry can satisfy increasing demand for mobile services by refarming existing 2G and 3G authorizations.