SSSSSSSS AAAAAAAA TTTTTTTT NNNNNNNNN EEEEEEEEE WWWWWWWWW SSSSSSSS SS SS AAA AAA T T N NNN N E E W WWW W SS SS S SS S AA AA TTT TTT N NN N E EEEEEEE W WWW W S SS S SS SSSS A AA A TTT TTT N N N E EEEEEEE W WWW W SS SSSS SSS SSS A AA A TTT TTT N N N E EEE W W W W SS SSSS SSSS S A A TTT TTT N NN N E EEEEEEE W W W SSSS SS S SS S A AA A TTT TTT N NNN N E EEEEEEE W W W S SS S SS SS A AA A TTT TTT N NNN N E E W WWW W SS SS SSSSSSSS AAAAAAAA TTTTTTTT NNNNNNNNN EEEEEEEEE WWWWWWWWW SSSSSSSS :---------------------Electronic Headlines----------------------: : : : Issue: 113 :-------:Published Biweekly:------: Date: 02/08/93 : : : :---------(C) Copyright 1991-93 M2 COMMUNICATIONS LTD ----------: : : :-------------------------------------------:-------------------: : SATNEWS is published biweekly by M2 : HOW TO CONTACT US : : Communications Limited and is Copyright(C): : : 1991-93 M2 Communications Limited. This : INTERNET : : electronic version is a delayed, limited : satnews@cix. : : subset of the printed subscription edition: compulink.co.uk: : which is available from the publisher. : TELEPHONE : : This file may be freely distributed as : +44 203 717 417 : : long as NO portion is amended in any shape: FACSIMILE : : or form. Copyright violators will face : +44 203 717 418 : : legal action for unauthorised editing and TELEX : : breach of copyright. : 94026650 DBRI G : :-------------------------------------------:-------------------: : Editor/Publisher: Darren Ingram : Contact Satnews : :---------------------------------------------------------------: OFTEL INVESTIGATES UK SPACE CAPACITY MARKET A major consultative exercise by Oftel, the UK's telecommunications watchdog, has been started into the operation of the satellite Signatory Affairs Office (SAO) and competition in the satellite services sector generally. BT, the privatised state telecommunications company, presently manages the SAO and competitors have to approach it for satellite capacity with Intelsat and Eutelsat. This arrangement was made in 1989 after a series of specialised satellite service operators (SSSO) licences were awarded. With the advent of competition Oftel felt that there was seen to be a clear conflict of interest between BT's commercial interests and its function in allocating satellite capacity. Oftel has since held informal reviews of the SAO's operation with parties with a vested interest, and it was felt that a more definite long-term solution should be found. Opponents to the SAO in its existing form criticised BT's impartiality within the SAO, despite stringent claims that its own satellite services division were often the last to know about SAO activities. "The major conclusions that we have drawn from this review is that the arrangements for allowing the SSSOs access to space capacity they need to conduct their businesses have been fundamentally unsatisfactory," said a summary in the Oftel consultative document. But later on within the document Oftel admits that BT has been receptive to change when required. Don Cruickshank, director general of Oftel, said: "The review had concluded that the current arrangements do not adequately reflect the significant changes that have taken place both within the UK independent satellite service market and in the way both Intelsat and Eutelsat conduct their business." "I believe that the proposed changes will help to create the right conditions for greater competition in the UK satellite service market which will mean a wider range of innovative and keenly priced services being made available to the consumer. In addition the proposals will improve the independent operators' confidence in the SAO and the way it operates, although as the satellite consortia move towards direct access for satellite capacity the role for an UK SAO will naturally diminish." Oftel is seeking views on whether BT should not be allowed to seek investment share contributions (into signatory operation) at this stage; whether BT be allowed to require independent operators to have adequate indemnity insurance arrangements to meet liabilities that might otherwise fall on BT as signatory; that BT be allowed to charge reasonable costs of copying documentation supplied in response to a request for information that does not lead to the acquisition of space capacity; that BT's operating licence be modified to bring its satellite-related activities into its ambit; that BT should publish separate financial statements showing its signatory arrangements; that it would be a licence breach for BT staff at the SAO to reveal confidential information to non-SAO staff, that the SAO should be separated from the company and that procedural changes are made. Oftel is also looking for greater input by SSSOs into signatory meetings, driven by the view that BT will only represent the major interests of its own clients and activities ahead of those possibly in mind of its competitors. Comments have to be received by 30 September at Oftel. * Satnews will carry the text of the consultative paper in its next electronic on-line issue. Paper copies can be obtained from Oftel. Satnews' sister publication Data Broadcasting News, will also be covering the SAO affairs in greater detail. ASTRA PLAN FOR SIXTH SATELLITE Not content with a virtual domination of the European DTH satellite market, Societe Europeenne des Satellites has confirmed its intent to launch a sixth satellite, co-located at 19.2 degrees east longitude, in 1996. The satellite, known as Astra 1F, will provide extra channel capacity for the Astra system. Astra 1F will be used for digital television and radio transmissions, making it the second in the series, and will operate in the higher half of the BSS band (12.1-12.5GHz). Once Astra 1F is operational, the Astra satellite system will have 64 analogue transponders and the capacity for "hundreds" of additional digital transponders. Around 40 transponders are being allocated for digital means, providing a possible 160-320 spread of digital transponders, depending on the level of compression used. Some SES engineers believe that ten channels could be squeezed into an analogue one. Negotiations with satellite producers and launch companies are ongoing, with a decision and contracts expected to be signed by the end of the year. Dr Pierre Meyrat, director-general of SES, announced details of Astra 1F after signing a renewed franchise agreement with the Grand Duchy of Luxembourg, which provides the independent regulatory basis for current and future operations. The new agreement now expires in 2010, and potentially has the power to cease all Astra broadcasting if not renewed, although with the Grand Dutchy's involvement, this is an unlikely scenario. "SES' sensitivity towards the needs and plans of its market partners from the programming and hardware industry have contributed fundamentally to the successful launch of DTH satellite television in Europe. With the procurement of a second 'dedicated digital' Astra satellite, SES will offer its partners from the industry an infrastructure offering optimum conditions for entering the digital era." HUTCHVISION SOLD TO MURDOCH FOR US$525M. News Corporation has paid US$525 million for HutchVision, operators of the Hong Kong-based satellite television company StarTV. Analysts in the region say that it ia owner Rupert Murdoch's plan to become a dominant broadcasting force in the region and eventually the world. Pearson, who recently announced a major restructuring of its business (see separate story) was also in the running for the 63.6 percent share stake, but it was pipped at the post by News Corp. Unconfirmed local news reports in Hong Kong suggest that Pearson was prepared to offer more money, but Murdoch offered to have a public issue of HutchVision shares so that owners Li Ka-shing could sell their remaining private stake at a later stage with ease. Previously Murdoch bid US$250 million for HutchVision but this was refused. StarTV broadcasts to 38 countries in the Asia Pacific region, reaching a potential audience of 45 million viewers in 11 million homes. Five television channels, including BBC World Service Television, are relayed over the service. A major change of programming is scheduled for October, which will see the introduction of pay television programming services. This change was planned before the Murdoch takeover. "I am very, very thrilled [about the purchase]," said Rupert Murdoch. "It has got a long way to go but it has got the potential to be two or three Skys. [referring to British Sky Broadcasting in the UK." Murdoch dropped out of the bidding for a 22 percent stake in Television Broadcasts (TVB), a Hong Kong terrestrial television company after regulatory issues reached a stalemate. No regulatory issues will affect the sale of HutchVision because the Li family are retaining a 36.4 percent stake in HutchVision as well as controlling the company which has an operational licence from the Hong Kong government. ASDA SHOPS AT MAXAT FOR RADIO SYSTEM As exclusively revealed by Satnews, British supermarket chain Asda has dumped NII Norsat International as its supplier of satellite radio services and signed a contract with Maxat. Satnews 110 (22 June) said that Asda was set to terminate its contract with NII Norsat. Hampson Associates, the production company responsible for Asda's programming, has signed a contract with Maxat to provide the delivery, technical and monitoring aspects for the service. Asda FM has been broadcasting for the past 18 months to 160 Asda stores since a contract was signed with NII Norsat in September 1991 (Satnews 050). Asda is planning to expand its network to cover all 204 stores and change to a magazine-show format. Stuart Baxter, head of business television at Maxat, said: "The success of Asda FM to date demonstrates the versatility of the medium and the benefits that a major retailer like Asda can reap through using it." Phil Hampson, MD of Hampson Associates, said: "We have worked with Maxat before and have always been impressed by the company's professionalism. We will be relying very heavily on the team to maintain and manage the network as it expands." Asda FM will continue to be broadcast on the Sky Movies Plus transponder of Astra 1A, at the 7.74Mhz audio subcarrier frequency. NO PLANS FOR REUTERS GLOBAL NEWS Reuters is not planning to create a global news service network to rival existing operators such as CNN and BBC World Service Television, according to Peter Job, chief executive of Reuters PLC. In an interview in the 2 August issue of UK Press Gazette, Job says that Reuters' plan to develop as a 'multimedia' organisation is more concerned with news-gathering mechanics rather than direct-to-home distribution. Job believes that DTH network operation is not that profitable, and that the company will continue to act as a wholesaler of financial and political news, as well as a transport mechanism for broadcasters seeking satellite-delivered links in the field. Reuters have linked their traditional newsgathering organisation with the relatively recently acquired Visnews TV agency, now renamed Reuters Television, to provide television footage alongside the traditional wire photo option. Newsrooms now have the option of capturing live video from Reuters Television for inclusion with newspapers and periodicals, giving editors a greater degree of flexibility and choice in the process. Reuters' editor-in-chief Mark Wood is quoted in the article as saying that further regional foreign news services will be launched by Reuters, firstly with a Spanish language service covering Central and Southern America. *Reuters' recently released interim results for 1993 show group revenues up 19.7 percent to GBP895.8 million and pre-tax profits up 14.6 percent to GBP214.7 million, writes Garry Hesketh-Smith. Revenues from Reuters Television (formerly Visnews) increased by 39.8 percent to GBP37 million. GROWTH IN VIDEOCONFERENCING SERVICES FORECAST The worldwide market for teleconferencing systems and services will explode to more than seven times its current size by the end of the decade, growing at a 33 percent compound annual rate from $1.7 billion in 1992 to nearly US$13 billion in 1999, projects a new study just released by Frost & Sullivan/MIRC. Videoconferencing systems will enjoy the most dynamic growth rate, taking share of revenues from 28 percent in 1992 to 46 percent in 1999 claims the report. Demand for audiographic services (systems that display limited video information) will see their market share rise from five percent to nine percent. Systems are set to be more integrated and brought onto the desktop. Much of the demand will be brought around by videoconferencing systems, although there will be a number of side benefits for the satellite and cable television industries, primarily as they will be used as a transmission medium for videoconferencing systems. North America will remain as the largest market through the decade although it will lose some of its growth to other markets. The Pacific Rim will be the fastest growing regional market says the report, coupled by economic growth. TRAVEL CHANNEL DEBUT FOR EUROPE Landmark Communications Inc, the US media conglomerate which owns the The Weather Channel and The Travel Channel, has confirmed that it is to launch The Travel Channel in Europe early 1994. The Landmark purchase of The Travel Channel US last year has been followed by a new look and programming review, the debut of which was held at the NCTA last month in San Francisco. The NCTA attendees were presented with the new Travel Channel schedule - offering more than 200 hours of new material. The Travel Channel UK has offices in central London and is in the process of staffing and preparing for launch. Kevin Senie, Executive Vice President and Chief Financial Officer of Landmark Communications says: "The UK is a key market for us, and now that The Travel Channel is working well in the States, we're in a position to move forward very quickly. We believe that this is a clear and powerful concept that UK viewers will react to very positively. "We will launch in the UK early in 1994 and in the meantime are making substantial progress with our development plans which also include Benelux and Scandinavia." Since the launch of The Weather Channel in 1982 it has enjoyed considerable success. It is now watched in 54 million homes in the US, and noted a surge in viewer ratings. The programming specification for the Travel Channel in the UK includes broad lifestyle entertainment across all the pleasures associated with travel - action, adventure, culinary experiences and cultural insights. Landmark Communications is a privately owned company with extensive US media interests including newspapers, special interest publications, television broadcasting and satellite programming. NTL TRIALS SYSTEM 2000 WITH EUTELSAT NTL and Eutelsat have completed joint tests to prove the viability of wideband satellite transponders for carrying both conventional analogue FM television signals and the new digitally compressed TV signals of the NTL System 2000. A single Eutelsat transponder was shown to be able to carry simultaneously either a single FM channel and four digitally compressed channels or a total of eight digital channels at broadcast quality. The compatibility, within one transponder, of a high power analogue transmission and lower power digitally compressed signals means that operators can more easily migrate from analogue to digital, with its attractive cost reductions. Eutelsat says that its wideband transponders are especially attractive since the premium for the additional bandwidth is much less than the extra cost of a whole transponder. NTL's System 2000 is a complete multi-channel video compression system operating at broadcast quality using the MPEG standard. At 8 Mbits/second, four digital TV channels can be accommodated in the space normally occupied by one analogue service. Lower bits rates are possible, giving even more channels at slightly reduced quality. CABLE TELEPHONY START IN LEICESTER A new cable telephony network has been launched in Leicester, UK. The service, operated by LCL Cable Communications Limited, is using public network infrastructure from Northern Telecom Europe. All switching apparatus is from Northern Telecom under a GBP6 million contract. Alan Chaney, chief executive of LCL Cable Communication, said that the agreement with NT will enable the company to switch its own calls within its franchise area -- potentially 200,000 premises plus -- as well as a range of advanced telecomms services through the use of Synchronous Digital Hierarchy (SDH) equipment. A full range of business and residential services are set to be offered from September 1993, and the company is presently fixing a tariff for service. LCL will offer digital centrex, automatic call distribution, ISDN, voice messaging, flat-rate billing for local calls, call waiting, conference calls, call barring, distinctive ringing, call diversion and information services. James Deas, managing director of NT's European Transmission Systems Division, said: "The agreement reached confirms the growing trend of cable television network operators taking advantage of SDH technology." NT equipment is popular among the few UK cable operators providing a telephony service. Cambridge Cable and Jones Cable are already using NT equipment to provide telephony services, and Encom and Telewest will introduce cable telephony services with NT equipment during August. Latest figures from the UK's Independent Television Commission (ITC) shows that 32 cable franchises are now providing telephony service and have connected a total of 190,386 exchange lines. The number of installed lines has risen by a third over the last three months and by almost 300 percent over the last year. Current figures show that there are 167,457 exchange lines for residential use and 22,929 exchange lines for business use. Cable telephony services are now being provided in Windsor, Slough, Maidenhead (through General Cable), Camden, Hackney, Islington, Haringey, Enfield (Cable London), Newham, Tower Hamlets, Greater London East (Encom Cable TV), Birmingham (Birmingham Cable), Southampton, Lambeth, Southwark, Greenwich, Lewisham, Harrow, Ealing (Videotron), Croydon, Merton, Sutton, Kingston, Richmond, Bristol (Avon), Edinburgh (United Artists), Portsmouth, Brighton, Bromley, North & North East Surrey (Nynex), Nottingham (Diamond Cable), Wigan, Black Country, North Liverpool (Southwestern Bell), Cambridge (Cambridge Cable), Crawley, Horley & Gatwick (Eurobell) and South Hertfordshire (Jones Cable). BT BEHIND COUNCIL'S BUSINESS TELEVISION SCHEME BT in the UK has been awarded a contract to provide and operate a business television service aimed at local government officials. The network, to be launched at the end of September, will provide live two-hour news and current affairs programming every fortnight to subscribers. The channel will be known as Local Government Network (LGN) and will broadcast to subscribers amongst the potential 450-strong local authorities in the UK. LGN is owned and funded by the Association of District Councils, First Eurinvestment and Scientific Atlanta UK. Ian Denholm will head up the new network. "There has never been a greater need for local government to keep abreast of developments in Westminster, Whitehall and Brussels," said Denholm. "That is why LGN is designed specifically to help authorities increase their knowledge and productivity by providing up-to-the-minute news and in-depth issue analysis." But local governments are facing severe cash cutbacks presently, and many observers wonder whether they will be able to cost-justify the use of LGN. In a press statement Steve Maine, director of BT Visual & Broadcast Services, said that the LGN contract made BT the market leader in providing satellite transmission services for business television networks. Rivals Maxat, who have a sizeable business television market share, were unavailable for comment. Rapide Productions will produce the programmes and transmit them from LWT (a London terrestrial broadcasting company) studios in London. HISPASAT LAUNCHED BY ARIANESPACE An Arianespace Ariane 44L rocket launched Spain's second telecommunications satellite Hispasat 1B and India's Insat 2B rocket into space on the night of 22-23 July. The two launches went unimpeded and Charles Bigot, chairman and CEO of Arianespace, gave a typical post-launch comment. "With three satellite launches in three months, Arianespace shows its commitment and ability to fulfil its customers' requirements. We are pleased to have contributed to the consolidation of the Hispasat system, which serves Spain and South America. We are also extremely gratified by the loyalty of our Indian customer ISRO, for which we have launched a third satellite." Hispasat 1B is the second first-generation Hispasat satellite. Prime contractor for the spacecraft was Matra Marconi Space (Toulouse, France). With a mass at liftoff of 2,210kg, it will provide telecommunications services (voice telephony and data communications) for Spain, the Canary Islands and Latin America. Insat 2B is the second satellite in the second-generation of the Indian government's space programme. The spacecraft was built in Bangalore for the Indian Space Research Organization (ISRO) and will be used to meet India's domestic needs. The multimission satellite, with a mass at liftoff of 1,931kg, will provide telecommunications, meteorological, search and rescue and educational services. The next Arianespace launch, Flight 59, will use an ARIANE 40 and is scheduled for August, 31. It will carry the SPOT 3 Earth observation satellite, the Stella spatial geodesy satellite for the French Space Agency CNES, and five micro-satellites: Healthsat (USA/GB), Kitsat-B (Korea), Posat-1 (Portugal), Eyesat1(USA) and Itamsat (Italy). ECHOSPHERE TO HOLD EURO SEMINARS A series of seminars aimed at satellite dealers are to be held by Echosphere Corp. Over 20 seminars in 10 European countries will be held, providing exclusive information on Echosphere's range of satellite equipment and how it can be integrated into systems for customers. Echosphere will also provide details on its planned DBS satellite launch - - Echostar 1 -- which will be located at 119 degrees west longitude to provide coverage to the Americas. "By organising the Echostar dealer seminars, we want to expand our dealer network and give our existing dealers confidence to install an Echostar satellite system with SatTrack," said Dave Carlson, MD of Echosphere Corp. Echosphere will be using the seminars to demonstrate its recently launched SR8700 satellite system with automatic satellite tracking. Details of the seminars can be obtained from Echosphere. Telephone: +31 5490 15122, +49 211134998 or +44 (0) 71 321 0814. PEARSON RESTRUCTURES INTO THE MEDIA Pearson PLC, the UK conglomerate with interests in many business sectors, says that has decided to concentrate on its media activities and sell off its other interests. Royal Doulton, its fine china division, and Camco, its oilfield equipment and services division, will become independent public companies in the process. The first demerger is expected to be completed by the end of 1993. In 1992 the two businesses accounted for around 30 percent of Pearson's GBP1.6 billion sales figure and around seven percent of its GBP156 million group profit. Lord Blakeham, chairman of Pearson, said: "Our distinctive strengths include the ownership and exploitation of brands, imprints and intellectual property rights. We see exciting opportunities to make growing use of these strengths in selected markets for information, education and entertainment." "Substantial investments have already been made both centrally and through our businesses. These have included significant investments in satellite television in the UK over the last five years and earlier this year, through the purchase of Thames Television, the acquisition of valuable programme rights and production capacity." Pearson holds a 17.5 percent stake in British Sky Broadcasting, the European satellite broadcasting company headed by Rupert Murdoch and holds sizable interests in British terrestrial television companies. Reports suggest that Pearson is looking to increase its shareholding in BSkyB. TELEPORT OPENS IN SOUTH FLORIDA Hero Communications has opened its new headquarters and international teleport in Miami, US -- making it the only full service teleport in South Florida to provide national and international satellite services. The teleport has Intelsat connectivity and can uplink to many domestic satellites. A range of production and post-production facilities will be added for the benefit of clients by the end of the year. The teleport has been in operation since 15 June and it is transmitting two domestic signals for the Spanish language channels GEMS Television and SUR, as well as the Argentinean film channel 365. Radio channels for Scola (French) and World Radio Network are also being relayed, with the latter to Europe for redistribution. "With the acceleration of business development in the television and cable industry in South Florida and Latin America, the demand for satellite transmission of programming is on a strong upward curve," said Robert Behar, president of Hero Communications. "Miami is in an ideal location to benefit from the new awareness of the substantial consumer market for Spanish-language programming, transmitted from the US to South America, of from South America to this country. I feel that our timing couldn't be better in opening a facility that offers state-of-the-art satellite and production services." Hero also provides a range of equipment supply and SNG services to broadcasting organisations. CHANNEL 5 LICENCE TO BE AWARDED? The UK's Independent Television Commission has published a consultative document on the future of Channel 5, a once-planned fifth terrestrial channel for the UK. Channel 5 would have concentrated on the major provincial areas of the UK, and satellite delivery was mooted as a way of delivering the signal to interested parties who were outside of the coverage area. This move follows a decision made by the ITC not to award the licence to the sole applicant -- Channel Five Holdings Limited -- despite great protestations. At one stage many bidders were interested in acquiring licences, but the transmit frequency planned would interfere with many home entertainment devices that use channel 36 UHF. The incumbent licence holder would have to pay millions of pounds out in conversion fees to aggrieved equipment owners. The ITC has not yet committed itself to a decision of readvertising the licence, and has invited a declaration of interest from parties who might wish to apply. It is also seeking comments on technical matters including the provision of local opt-in services and the use of digital terrestrial television broadcast technologies. Three options for comment and discussion have been released. Comments have to be returned by 15 October 1993. Interested parties should write to: The Secretary to the ITC, 33 Foley Street, London W1P 7LB. The ITC's options are: Option One - Readvertisement A single licence would be re-advertised on terms similar to those which appeared in the original Invitation to Apply issued in April 1992 which are based on requirements in the Broadcasting Act 1990. The technical review considered the use of additional frequencies in order to reduce the extent of the VCR interference problem and examined the possibility of changes in polarisation to improve reception of the service on existing aerials. However in neither case has it been possible to identify areas in which the costs of introducing Channel 5 could be greatly reduced or the process simplified. The ITC's view, subject to any comments received, is that the results of the technical review make insufficient difference to warrant modification to the transmitter plan on which any new Invitation to Apply would be based. Option Two - Local Services on Channel 5 The Broadcasting Act 1990 does not allow the ITC to issue separate licences to provide discrete local or city-based television services. Interest in developing the Channel 5 concept in this way has been noted by the ITC, but new legislation would be required. On this understanding, the ITC would like to receive views on the potential of such services in programme and financial terms. Option Three - Digital Television The ITC recently issued a separate discussion document which outlined strategies for the introduction of digital television. These include simulcasting of the existing PAL services provided by BBC, ITV and Channel 4 until early in the next century when the availability of domestic digital receivers would enable the cessation of existing analogue transmissions and the re allocation of frequencies. This strategy could still be pursued if Channel 5 meanwhile came into operation on an analogue basis. However the frequencies currently being considered for Channel 5 could instead be used to improve the coverage of digitally simulcast services or for introducing new services digitally, or for some combination of the two. Views on this option are also sought. SPECIAL REPORT (for electronic edition subscribers only) CONSULTATION ON CHANNEL 5 AND DIGITAL TELEVISION CONSULTATION PAPER Introduction 1. The ITC is considering whether again to invite applications for a Channel 5 licence under the terms of sections 28 to 30 of the Broadcasting Act 1990. An Invitation to Apply was issued in April 1992 and a single application was received, but the licence was not awarded. A new Invitation to Apply would have to be issued if the Commission decided to readvertise the licence for Channel 5. The Commission would not wish to issue an Invitation to Apply unless there was evidence of one or more potential applicants with a serious interest in applying for the licence for Channel 5 on the terms which are available under the Broadcasting Act 1990. 2. Since December 1992, when it was decided not to award the Channel 5 licence to Channel Five Holdings Limited, the ITC has been reviewing possibilities for the future of the channel. A major part of this work has been the technical review which was announced in February. This has considered the use of additional frequencies in order to reduce the extent of the VCR interference problem and the possibility of changes in polarisation in order to improve reception on existing aerials. A summary of the results of the technical review is attached to this document. 3. Against this background (see also paragraphs 9 to 23 below), the ITC is inviting interested parties to provide submissions which indicate the nature of their interest and the seriousness of their intent in wishing to see readvertisement of the Channel 5 licence under the terms of the 1990 Act. 4. A second option which the ITC has considered for the future of Channel 5 would be to wait until government has considered any evidence in favour of using the frequencies in question for specific local or city-based television services. The present Act would have to be amended to give effect to this option, because, as it stands, the Act requires that Channel 5 should be essentially a national service, albeit with the possibility of opt-outs for local services, and it would not allow the possibility of a television service provided specifically, and only, for viewers in, for example, Belfast, Cardiff, Edinburgh or London. It would therefore be for Government and Parliament to decide on the merits of the case whether to provide the Commission with the necessary powers to advertise licences for such local services. 5. The ITC is interested in any views, backed by evidence, that this second option (see also paragraphs 24 to 27 below) would be practicable, and preferable to the option to readvertise the licence on terms available under the 1990 Act. 6. The Commission also wishes to draw attention to a third possibility. A discussion document was issued by the ITC on 28 June 1993 on options for the future of digital television. Attention was drawn in that document to benefits in utilising the frequencies hitherto set aside for Channel 5 as a resource which would be available to support a strategy for the introduction of terrestrial digital television in the UK. The third option would therefore be to abandon Channel 5 as it was originally conceived. 7. In the light of developments which may be practicable in the medium term for the introduction of digital transmission techniques, views on this option (see also paragraphs 28 to 30 below) would also be useful to the ITC. 8. Anyone wishing to comment on any or all of the options for the future of Channel 5 is asked to write to The Secretary to the ITC, 33 Foley Street, London WlP 7LB by Friday 15 October 1993. Points on which it would be used to have specific information are set out in paragraphs 31 to 37 below. The Commission may follow up any initial comment by asking for further information, either orally or in writing. First option: Readvertisement Background 9. Under section 28(1) of the 1990 Act, the ITC is required to do all that it can to secure the provision of a service to be known as Channel 5, for such minimum area of the UK as it may determine. In determining that minimum area, the ITC must have regard to the need to make the most effective use of the frequencies on which Channel 5 is to be provided. In accordance with this provision, a 33 transmitter plan was cleared internationally, allowing coverage of approximately 74 percent of the UK population. 10. Section 29 of the act refers to the circumstances under which the ITC may award a licence for Channel 5. The award must be made on the basis of competitive tender, provided that the applicant satisfies the Commission that his proposed service complies with specific requirements. As part of those requirements, a sufficient amount of time must be given to high quality national and international news and current affairs programmes, to programmes other than news and current affairs which are of high quality, to religious programmes and to childrens programmes. Taken as a whole, the programmes included in the services must be calculated to appeal to a wide variety of tastes and interests. 11. The ITC must also be satisfied before considering an applicant's cash bid that he would be able to maintain the service throughout the 10 year period for which the licence would be in force. The Commission would require the necessary information about business and financial matters to be provided in order to satisfy itself on this point. Section 30 of the 1990 Act also requires the licensee to make specific arrangements for the retuning or modification of equipment which would otherwise suffer interference caused by the transmission of Channel 5. The cost of retuning and modification must be borne by the licensee. In its consideration of whether or not an applicant would be able to maintain the service, the ITC would take into account plans for meeting the retuning requirements. 12. The ITC issued an Invitation to Apply for the Channel 5 licence in April 1992. A map showing the predicted coverage area of the Channel 5 transmitters was included in that document, which also provided a detailed statement as to the quality threshold which would be applied on programme, financial and retuning matters. A Code of Practice on Equipment Retuning and Modification which is to be read with the requirements set out in the Invitation to Apply was issued at the same time. 13. One application for the Channel 5 licence was received by the closing date in July 1992. The ITC announced in December that the licence would not be awarded, and that a study of options for the future of Channel 5, including readvertisement, would be set in hand. A technical review as part of the study was announced in February 1993. Results of the review (a) Transmission matters 14. The technical review focused on ways in which it might prove possible to improve the commercial prospects of the Channel 5 licensee. Two possibilities were investigated: to use additional frequencies which might cause less VCR interference; and to see whether more widespread use of horizontal polarisation would reduce the need for the additional domestic aerial which would otherwise be needed to view Channel 5. 15. A summary of the results of the two studies is provided as an annexo to this consultation document. The ITC's view, subject to any comments received as a result of this consultation, is that the results make insufficient difference to warrant modification to the technical plan on which any new Invitation to Apply would be based. Such modification would require international clearances. These would be difficult to secure in any case without firm evidence that the proposed service would actually be implemented. However a licensee might wish to take advantage of some of the results of the studies, subject to demonstrating that the proposed approach made no less effective use of the frequencies for Channel 5. The ITC could then seek to secure the necessary consents and international clearances after the licensee had been appointed. 16. The Commission has also considered again what the "minimum area" for the coverage of Channel 5, which it must determine, might be. Seven of the thirty three transmitters in the plan for Channel 5 would serve individual populations of 100,000 or less. One of the transmitters (Cambret Hill) serves a population of only 13,000. One possibility allowed by section 28(2) of the Act would be for one or more of the smaller transmitters in the plan not to be required, where there was doubt about whether it was "reasonably practicable" for the service to be provided by means of the transmitters in question. This would not prevent the licensee from extending his coverage up to the full extent allowed by the current plan should he wish to do so. The Commission would find it useful to have views on this point. 17. Another matter covered by the ITC's study is the expansion of coverage, both in terms of area and timetable. Under section 28(4), the ITC may, in view of any lack of facilities available for transmitting the service, dispense with the requirement to provide the service for such part of the transmission area and for such period as it may determine. This means that a phased expansion of coverage would be permitted, and that it would not be necessary to start broadcasting the Channel 5 service from all transmitters serving the minimum coverage area at the same time. 18. The ITC considers it reasonable that the full coverage should have been reached by the end of the fifth year, i.e half way through the full 10 year term of the licence. Roll-out would have to occur in a reasonably even way within that period. But within these parameters, and subject to any comments that were received as a result of this consultation, the ITC would not object to an applicant putting forward his own plan and timetable for consideration by the Commission. (b) Other matters 19. The ITC's study has also considered other aspects of the terms on which Channel 5 might be readvertised, which are broadly speaking the financial terms, the retuning obligation and programme requirements. 20. On the financial side, in the Invitation to Apply which was issued in April 1992 the Percentage of Qualifying Revenue was set at zero. The ITC considers that on present evidence, a higher figure would not be justified. There are no other aspects of the tendering arrangements in which the ITC has a role under the 1990 Act which could be adjusted to the benefit of applicants. The Commission is satisfied that the requirements for retuning and equipment modification, which were published after extensive public consultation in April 1992, are the minimum necessary consistent with its statutory duty and responsibility to the public. 21. On programmes, the general shape of the requirements are set by statute (see paragraph 10 above), and it would not be open to the ITC to award a licence to an applicant who did not propose to meet the required minimum of programming, in terms of mandatory strands or sufficient quality. All or part of the Channel 5 service could be provided on a subscription basis. However the ITC could not accept proposals, whether on subscription terms or not, which did not meet the requirement that programmes included in the service should be calculated to appeal to a wide variety of tastes and interests. 22. The ITC reviewed the programme requirements in the quality threshold for Channel 5 carefully as a result of public comments before issuing the Invitation to Apply in April 1992. In the light of its responsibilities under the 1990 Act, there would seem to be no scope in any readvertisement of the Channel 5 licence for further reductions in the minimum requirement for programmes. 23. However the ITC has again noted the opportunity for local or city-based programming on Channel 5 provided within the framework of the 1990 Act. Thus, consistent with the present legislation, a federation of stations could exist under the umbrella of a single licence, provided that the Commission was satisfied that the applicant would operate what in substance was a national service, albeit with regional variations. Nor would there be anything to prevent the owners of local stations themselves owning the body which held the national licence. Nevertheless compliance would have to be organised to satisfy the need for clear responsibility for all programmes provided under the licence. But there seems to be no reason why stations which are part of the federation should not have a strong local identity while at the same time the service to which they contribute complies with the requirements of the 1990 Act. Second Option: Local services 24. Some public comments on Channel 5 as well as the interest which has been expressed from time to time to the Commission have advocated using the last major opportunity for a new terrestrial television service, at least on an analogue basis, to provide UK viewers with local television to complement the national and regional services which already exist. The application received in response to the Invitation to Apply issued last year proposed the introduction of city-based stations, albeit within the framework of a national service. It may be argued that some major conurbations have the potential to support local services, although the development of services on cable systems, which is already starting to occur in many parts of the UK, provides an alternative means by which any demand there may be for local television services in specific locations could be met. 25. Work as part of the technical review which is summarised in the annexo to this consultation document suggests that it may be possible, subject to national consents and international clearances, to provide city-based services in certain locations which would not involve costs of VCR retuning on the same scale as were implied by the original national Channel 5 plan. Employed as part of a national service, the benefit to be gained in terms of lower costs would not be very substantial (see paragraph 15 above). But the possibility of a lower cost would clearly be more attractive where the service was to be provided under a licence only for that specific conurbation or locality, and where the cost saved was far more significant as part of the total cost. 26. Primary legislation would be necessary to allow the ITC to license services using in this way frequencies which might have been used otherwise for a Channel 5 on a national basis. It would ultimately be for government to consider, inter alia in the light of the case made for it in terms of the potential viability of such services, and whether, in the light of likely competition and alternative sources of local programme supply, it could make a useful addition to television services already available to viewers in the UK. 27. The ITC therefore wishes to receive views, in particular from those potentially interested in supplying such local services, on where they might be developed, what programming might be provided, what costs could be expected and from what sources sufficient revenue might be derived to sustain them. If it were possible initially to start such services on an experimental basis, without the risk of incurring the financial penalty which is imposed by the 1990 Act on terrestrial licensees in the event of premature termination of a licence, the development of such services might be encouraged. It would therefore be of interest to know as part of any response what use might be made of the opportunity to start up local services on an experimental basis. Third Option: Digital Television 28. The ITC issued a separate discussion document on 28 June 1993 which deals with implementation strategies for digital television. One possibility considered in that document is that the frequencies currently set aside for Channel 5 (mainly UHF channels 35 and 37) might be used for digital television, either to improve the coverage available for a digital simulcast version of existing services, or to provide more scope for the introduction of new services digitally, or for some combination of the two. 29. One possibility under this option is that Channel 5 itself might be used as a vehicle for the introduction of digital terrestrial television in the UK. Indeed the Invitation to Apply issued in April 1992 did not rule out the possible use of digital transmission for Channel 5. The ITC's view, however, subject to comments received in response to this consultation and to the discussion document on digital television, is that the Channel 5 of the Broadcasting Act 1990 is not the most appropriate vehicle for the introduction of digital television. Channel 5 has been framed as a single service which carries a number of programme obligations (see paragraph 10). Given the wider opportunities and the flexibility offered by digital techniques, the need for a coherent introduction strategy for digital television and the likely timescales involved, it appears to the ITC that new legislation would be more appropriate for the introduction of terrestrial services on a digital basis. 30. The proposition under this third option is therefore, effectively, that if option 1 does not prove practicable, then Channel 5 as originally conceived should be abandoned and that its frequencies should instead be added to those which might be used to facilitate the introduction of digital television. Comments on this proposition would be welcome either in response to this consultation, or in response to the discussion document on digital television, or both. Conclusions Questions related to Option 1: Readvertisement 31. In order to assist the ITC in deciding whether or not to readvertise the licence for Channel 5 under the terms of the 1990 Act, those who wish to submit expressions of interests are asked to include in their submissions an indication of their thinking on as many as possible of the questions listed below. The list is not intended to be exhaustive. Additional material on other aspects which are thought to be relevant would be welcome. (1) What is the nature of the programme service you would wish to provide under the Channel 5 licence ? Would the service include opt-outs for the provision of regional or local programmes ? If so, what would be the frequency and length of the opt-outs, and where in the country would they be provided ? (2) On what sources of revenue (advertising, sponsorship, subscription etc) would your service rely ? Where local advertising revenue is being considered, what evidence do you have that it could make a significant contribution ? (3) What general approach would you adopt towards the retuning of VCRs, within the terms of the ITC's Code of Practice on Equipment Retuning issued in April 1992 ? (4) What assumptions are you making about the changing size of audience over time, taking account of the competition which there may be in the short and medium as well as the longer term ? (5) How would you plan the phased implementation of Channel 5, both in terms of areas and timetable ? Would you propose to transmit the service by satellite as well as terrestrially ? (6) Do you have any observations on the technical matters discussed in the attachment to this consultation document ? Would you wish to change the technical plan for Channel 5 ? (7) Do you see a case, on the grounds that it would not be reasonably practicable to do so, for not using all the transmitters which are available under the published engineering plan for Channel 5 ? (8) Would you expect the development of digital television to play a part in your proposals for Channel 5 ? (9) At what point during the ten year licence period would you expect the project to break even ? What might be the broad magnitude of the cumulative losses incurred up to the break-even point ? How confident are you that sufficient investor funding would be available ? (10) When would you like the ITC to advertise the Channel 5 licence, and when would you propose to start your service? 32. Any expression of interest submitted and information provided to the ITC will be without prejudice to the ITC's consideration of any application which might subsequently be made for the Channel 5 licence. The ITC will treat in strictest confidence information provided by respondents writing to express an interest in applying for the Channel 5 licence. Questions related to Option 2: Local services on Channel 5 33. Services focused on specific cities or a series of localities and without a dominant national component would not be permissible within the existing legislation. If you have a specific preference for this approach, it would be useful to the Commission to have details which include evidence as to the practicability, and in particular the commercial viability, of providing services on this basis. Where relevant, information in answer to questions raised under option 1 would be of value in this context. Of particular significance is any evidence that local advertising revenue could make a significant contribution (Question (2)) and about the size of audiences and likely sources of competition (Question (4)). 34. Taking account of the information provided in the Annexo to this paper on the results of the technical review, it would be useful to have answers to the following questions: (1) For which areas or conurbations would you be willing to provide services if suitable licences were available ? (2) What use might you make of an option to operate local services, at least initially, on an experimental basis ? (3) What circumstances do you see as necessary for the success of the sort of service you propose ? 35. On Option 2, the ITC may wish to publish a summary of the content of any responses it receives, or to make use in further discussion or policy documents of points which are raised in the responses. However any request for confidentiality will be respected. Questions related to Option 3: Digital Television 36. Against the background of the possible use of the frequencies currently set aside for Channel 5 for digital television, the ITC would be grateful for any views as to the advantages or disadvantages of not pursuing the possibility of Channel 5 under either of the above two options. Observations on the way in which UHF channels 35 and 37 might be used for the introduction of digital television in the UK would be of value to the Commission, whether contributed as a response to this consultation document on Channel 5 or on the discussion document issued earlier on digital television. 37. On Option 3, the ITC may wish to publish a summary of the content of any responses it receives, or to make use in further discussion or policy documents of points which are raised in the responses. However any request for confidentiality will be respected. Introduction ANNEX SUMMARY OF RESULTS OF THE CHANNEL FIVE TECHNICAL REVIEW 1. This annex summarises the results of two different technical studies which have been carried out. A study into the use of additional frequencies for Channel 5, which might cause less VCR interference. A study into the more widespread-use of horizontal polarisation on the basis of the current frequencies used in the Channel 5 transmitter plan which would reduce the need for an additional domestic aerial in order to view Channel 5. 2. The studies were of a preliminary nature, intended to give an initial view of feasibility. Further detailed work would be required before any specific proposal could be submitted for national or international clearance. The Additional-Frequency Study 3. The main focus of the additional-frequency study was to investigate what might be possible for Channel 5 under conditions where there would be a significant reduction of the very costly VCR retuning burden. 4. The VCR retuning problem has arisen for Channel 5 since most of the transmitters in the current technical plan (26 out of a total of 33) use one of two new frequency allocations (UHF channels 35 and 37). These frequencies are the same as, or close to, those typically used in domestic VCR installations. The additional-frequency study has sought to identify alternative frequencies for each of the 26 transmitters in question which would not cause a VCR problem. It is normal in frequency planning for options to be excluded if they would result in interference being caused to existing services. However, in the additional-frequency study for Channel 5 this constraint was relaxed, and instead solutions were sought which would minimise the population which might suffer such interference. In cases where an alternative frequency allocation for Channel 5 would indeed cause interference to existing services, an alternative frequency allocation for the affected existing transmission was in turn sought. In the case of these existing transmissions serving relatively small populations, where possible, existing frequencies were identified. However, channels 35 and 37 have also been included as options in the search for alternative relay frequencies. In this way it was considered that a Channel 5 plan might be developed for which should any VCR problem occur it would not be in the large coverage areas of the high power Channel 5 transmitters, but in the small coverage areas of low power relays carrying existing services which would have had their frequencies changed to accommodate Channel 5. 5. However, such an approach to Channel 5 would raise other significant problems. The ITC does not have powers to force any existing broadcaster to agree to a change in frequency from a current relay station in order to accommodate a new Channel 5 frequency allocation. Even if the new relay frequency was not one which would cause VCR interference, there would be a considerable inconvenience to viewers in having to retune their television sets to the new frequency, and possibly to install a new aerial. A mechanism could probably be found to require a Channel 5 licensee to pay for such retuning and aerial installation, and indeed for any VCR retuning which was necessary. But a level of inconvenience would inevitably be caused under this model to some viewers of existing services. NEWS IN BRIEF Telewest, a major UK cable network operator has raised GBP190 million in loans to fund the building of cable networks. Telewest has around three million homes within its franchise areas. Telewest is a joint venture between TCI and US West and will use the money to expand its combined cable television and telephony service. Reports suggest that Jones Cable, another UK cable company, is close to arranging a GBP160 million loan to enable cable build in its own franchise areas. Bonneville International Corp., the Salt Lake City, US broadcasting company, has purchased a C-band transponder aboard Hughes Communications' Galaxy IV satellite. Bonneville will use the transponder to provide US- wide coverage for its customers on an ad hoc basis, as well as coverage for the Church of Jesus Christ of the Latter-day Saints. Galaxy IV is situated at 99 degrees west longitude. Sharp Corp. has introduced a new four-inch colour LCD TV designed for use within vehicles. The new model 4E-C3 includes proprietary high- brightness, low-reflection TFT active-matrix LCD screen for easy viewing, as well as enhanced signal reception, providing a 20 percent plus increase in the quality of received signals. Generator Partnership have been appointed as the advertisement agency for UK Living, the new satellite television channel aimed at women and their families, set for launch aboard Astra 1C on 1 September. Generator will produce the advertising and The Media Centre will handle the sales. UAP will manage the launch of the channel for the first six months before being managed by UK Gold, its sister channel. Videotron, the UK cable TV MSO has provided a high bandwidth fibre optic link between Hammersmith Hospital, Imperial College and Queen Charlotte's Hospital. The network will be used to provide a link into the SuperJANET academic research network. Eight miles of fibre will connect the network together. Revised draft guidelines for television programme sponsorship in the UK are being promoted by the Independent Television Commission, who has released a consultative document incorporating a draft revised sponsorship code. Submissions and comments are requested before 24 September 1993. DirecTV has signed up two new television channels for its planned US DBS satellite service. CNN International and Turner Classic Movies will join the other Turner Broadcasting Channels (CNN, Headline News, TNT, Cartoon Network and TBS Superstation) who previously signed up for the service. The Landscape Channel has signed an agreement with the International Satellite Programme Agency to represent its cable and satellite television interests in the Netherlands and Flanders. Jan Zwerus, managing director of the ISPA, said: "The Landscape Channel has a unique classical and instrumental music format which we believe will be as successful on cable in the Netherlands as it is in the UK." In the UK currently 358,970 homes receive the channel through cable TV networks. A Jordanian journalist who took part in an Israeli television show is facing disciplinary action for allegedly violating Jordanian Press Association rules banning contact with Israel. Ghazi Saadi faces dismissal or a ban from writing. Goldstar, Daewii, Samsung and Hyundai -- four major South Korean electronics companies -- have held a public meeting at the Taejon International Exposition centre to discuss the developments made by the companies in high definition television (HDTV). India says that it is sorry that Russia is failing to honour a contract to supply it with rocket engines. The US was against the contract because it feared that engines would not be used for satellite construction, but instead would form parts of military missiles, writes Parmjit Khan. General Dynamics has successfully launched a US military communications satellite aboard an Atlas 2 rocket launcher, The launch breaks a string of bad luck for General Dynamics, reeling from a number of satellite launch failures. The Learning Channel in the UK is changing its transmission hours to 0900- 1200 daily on the Intelsat V1-F1 satellite, transponder 64a. WireTV will broadcast from 1300-2300 daily. IDB Communications Group has received FCC approval for its planned acquisition of TRT Communications from PacifiCorp. The acquisition is set to be completed by the end of September. Virgin 1215, the UK independent radio station, has returned back onto an Astra subcarrier. It uses the 7.38 and 7.56 MHz subcarrier pair on the Sky News transponder. WOAC Communications has issued the July 1993 edition of the Who's Who in Cable and Satellite book in the UK. The next update is planned for January 1994. Comsat Corp. has reported second quarter revenues of US$154.1 million, up 16 percent over the previous period. Business has been brisk for the organisation with satellite and broadcast revenues contributing. NORTH AMERICAN SIGHTINGS by Robert Smathers ABC-TV is making a move off of Telstar 301. The east coast feeds and various newsfeeds (especially NewsOne feeds) are now on Telstar 302. The west coast feed is on Galaxy 3. All feeds were dual illuminating until 1 August. All feeds were in the clear, but LEITCH encryption was introduced on 1 August. Radio station WOKI from Tennessee has appeared as an audio subcarrier on the Video Catalog Channel on Galaxy 3/15. Audio from Satellite Market USA tapes can be heard 24 hours a day on the 6.2 audio subcarrier of the Satellite Market USA/Antenna TV transponder on Galaxy 3/9. I think this is done so that Satellite Market USA can sell their merchandise when Antenna TV is on. The Airport News and Transportation Network (ANTN) has recently launched on Gstar 2. ANTN is a service for training, teleconferences, news, and other features concerning airports and the air transportation industry. Telstar 301 is looking bad in my observations -- there are sparklies on transponders where I've never seen sparklies before. The last manoeuvre to keep Telstar 301 "in the box" was done recently and Telstar 301 is going to become an inclined satellite. Most major syndicators and TV networks that use Telstar 301 have moved or are in the process of moving. Keystone (with Paramount Communications as a major user) are going to stay on Telstar 301 until Telstar 401 is launched and replaces T1. SATELLITE TV EVENT OF THE WEEK: No major events stand out this week, but the flood coverage still leads the evening news. The good news is that heavy rain has not been occurring as much lately so the flood waters have had some chance to recede. Flood coverage feeds are still found on the network affiliate news feeds, live Satellite News Gathering (SNG) feeds, and a special channel set up by the Federal Emergency Management Agency (FEMA). FEMA provides a daily, 4 hour coverage for people affected by the flood to find out answers to their questions about how to get help from FEMA. The FEMA Disaster Channel also lets people not affected by the flood find out where or how they can help the flood victims. The FEMA Disaster Channel can be seen on SBS-6 (ku-band) or Galaxy 7 (c-band) daily around noon EDT. -----------------------------------------------------SATNE WS is published biweekly by M2 Communications Limited and is (C) copyright with all rights reserved. This electronic version is a based on the printed subscription version. To subscribe to the printed version, please contact M2 Communications Limited at Reptile House, 2nd Floor, 20 Heathfield Road, Coventry CV5 8BT UK. 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