KEY POINTS:
It was science fiction that got Peter Escher interested in satellites. Tales of communication from the heavens, of pictures, sounds and data flying around the globe via hunks of metal that float in geo-stationary orbit with the Earth.
They were the stories of the futurist and novelist Arthur C. Clarke who Escher trekked all the way to Sri Lanka to visit a few years ago. A digital pilgrimage of sorts.
The owner of Auckland satellite installer, Satlink, Escher has been run off his feet lately.
"I've been installing heaps of digital satellite gear in pubs and clubs," he says. Some 400 digital set-top boxes in the last month in fact.
That's because Satlink's core market - TV viewers getting into satellite to pick up foreign language TV channels and crystal clear TV One and 2 signals beamed over New Zealand - has been supplemented by a keen group of rugby fans.
Last Friday many of them switched their TV set-top boxes to an additional, free TVNZ digital satellite channel offering replays of the World Cup opener between Australia and Argentina.
It's a less-than-spectacular development given that only about 6000 homes have the set-top boxes required to receive TVNZ's digital satellite signals, and that this third, temporary channel is just a simulcast of TV One's World Cup schedule padded-out with added replays and highlights. Hardly the dawning of a new era in TV.
But for those eagerly awaiting digital TV and advocates of satellite as a means of delivering it, the channel's arrival was a landmark. A satellite channel that you didn't need a Sky TV decoder and subscription to access.
"It's the beginning, hopefully, of seeing New Zealand doing free-to-air digital TV via satellite instead of mucking around with terrestrial feeds," enthuses Escher.
In our belated move towards free-to-air digital TV, a debate has been resurrected. How do we make the technological change? Do we go digital terrestrial, upgrading the analogue transmission towers that scatter the countryside, or opt for a digital satellite service? Either way, Kiwi families are going to have to shell out for new digital set-top boxes, aerials or satellite dishes, at a collective cost to consumers that some in the industry have put at up to $1 billion.
So why do it? There are four key reasons: sharper pictures, especially for content in high definition, clearer sound, widescreen DVD-style formatting of programmes and extra channels, some of them with interactive features such as TV-shopping or internet access.
Satellite (used by Sky's digital network and the TVNZ rugby trial) has the advantage of instant universal coverage but an often lower-quality feed and the requirement for a satellite dish at each home. Digital terrestrial television is the more likely, but also the more expensive option according to Bob Cooper, the owner of small pay TV network Far North Cable and an expert on satellite technology.
A terrestrial network would offer the security of national ownership not available if the country relied on receiving its signals via foreign-owned satellites - a major psychological factor in the technology debate.
But Cooper is a strong advocate of taking the satellite path, a stance that has not won him many friends in the Government.
He sees digital free-to-air satellite and the opening up of Sky's set-top box monopoly as the true path to digital TV, and one which will see New Zealand avoid the expensive mistakes of other countries.
Digital terrestrial by nature, says Cooper, will require a greater density of equipment than exists to run the country's analogue broadcasting infrastructure.
"Digital doesn't fill in as well behind hills and tall buildings. The United Kingdom experience has been that where they had one analogue transmitter before, when they finish they'll have four digital transmitters."
In 2001, TV3 estimated the cost of upgrading to digital terrestrial at just $14 million. Cost is a point the Government is quick to point out in considering the terrestrial option. Other industry sources suggest that it is below $20 million.
"Capital investment required for existing broadcasters to establish [digital terrestrial television] would be relatively modest, as much of the existing distribution system is already digital capable," said Broadcasting Minister Steve Maharey last month.
Cooper says the figures bandied about are too low and has his own theory for the Government's interest in digital terrestrial. With a large investment in its transmission business Broadcast Communications Ltd, the Government wants to ensure it has an ongoing stake in the move to digital, he says.
"One way to do that is to force digital terrestrial. That way BCL, which owns these 920 transmitters, gets to go out and buy 920 new ones and maintain them all. That gives BCL a new commercial lease on life."
In public anyway, the Government is keeping its options open and will leave the choice of delivering digital TV to the industry through a working group it is setting up.
It has reserved two nationwide sets of spectrum licences suitable for digital terrestrial TV in the UHF bands - sufficient spectrum for up to 10 or more programmes for simulcasting existing analogue television services in digital format.
If there is sufficient demand, digital spectrum licences will be auctioned off.
Ironically, the rugby channel experiment is only possible because TVNZ is utilising expensive capacity on the Optus B1 satellite it bought for an earlier foray into digital pay television, a venture vetoed by the Government in 2001.
While the Government then opposed the state broadcaster moving into a pay environment that would have seen it competing for subscribers with Sky, today it acknowledges that moving the country's free-to-air platform from analogue to a technically superior digital system is essential. Whether we go satellite or terrestrial, or a mix of both, the real test of whether digital TV will be a success is at the consumer end. Will they invest in the digital set-top boxes and high-definition TV sets needed to received digital signals?
Here observers point out the main stumbling block. Around 540,000 subscribers, 78 per cent of them digital satellite customers, the rest UHF antenna users, pay to receive Sky, which offers free-to-air programming from TVNZ, CanWest and Prime, but requires a monthly subscription starting at around $21. Investing in another device for alternative programming is an unattractive option.
"Sky has chosen to encrypt the signal so that people are forced to use their box. They've shifted the expense of providing the channels from the broadcaster to the viewer. That may make good business but it makes lousy politics," says Cooper.
"The Government should step in and insist the existing free to air analogue channels be available through Sky as free-to-air digital," he said.
Sky chief executive John Fellet does not buy the argument for one set-top box and says Sky's box is relatively open already. With multiple mediums emerging for digital TV - over ADSL phone lines, 3G phones, video over power lines and terrestrial digital - a universal box was unrealistic.
"Our philosophy is that there are going to be all sorts of ways into the home and we want to be on all those sources. There's no-one in the New Zealand market who has failed to get on to Sky's box. We see ourselves as aggregators of content as opposed to a network."
Yes, but at a price. And there's the rub. The argument about opening up Sky's set-top boxes for true free-to-air TV runs like the row over unbundling Telecom's copper phone line network to TelstraClear and other competitors.
The big difference is - Telecom had decades of public investment in the network it inherited upon privatisation in 1990. Sky has built its business from the ground up and has only just become profitable - posting a $671,000 profit in the year to June.
Experience across the Tasman has shown the delay in getting our digital act together may have done us good in the long run. The Australian free-to-air broadcasters have spent more than A$1 billion upgrading their equipment and production suites to deliver digital TV. And the sum result of that is a digital TV user base of 145,000.
The digital TV move has been driven by Government demands designed to hurry up broadcasters make the switch.
But two and a half years down the track, Australia's six million TV watching households have shunned digital.
But Tim O'Keefe, spokesman for industry body Digital Broadcasting Australia, says the comparison is unfair.
A more accurate comparison, according to O'Keefe, is with consumer entertainment devices such as DVD players, now dirt cheap and in many New Zealand homes.
While pay TV penetration in Australia has stalled at around 22 per cent, O'Keefe maintains free to air digital TV via both satellite and terrestrial transmitters, has the potential to become much more pervasive. Politics is holding back its development, he says.
"At the moment the broadcasters have one hand tied behind their backs. The legislation in effect is there to protect the pay TV operators."
That's because commercial networks are not allowed to "multichannel" - send out content simultaneously on several digital channels in a fashion mirroring the services of the pay TV operators Foxtel and Austar. Public broadcasters the ABC and SBS can multichannel but they can't afford to do it on a large scale.
"My catch-cry is that we need some flexibility for the commercial broadcasters and some funding for the national broadcasters," says O'Keefe.
TVNZ's business development manager Marty Behrens says he expects it to take a further 18 months to narrow down the options and carry out initial feasibility studies for New Zealand.
Behrens says the European experience is that it typically takes four to six years to get the bulk of a terrestrial network up and running.
For Satlink, which is one of the larger independent satellite installers, the time is now, with nothing but politics stopping the advent of digital TV. Competition, says Escher, would change everything.
"If Foxtel or Austar were to drop a beam over New Zealand it could really challenge Sky.
"And if 20,000 to 30,000 wanted digital set-top boxes off me, I could still be happy making a reasonable profit selling them for around $200 each."
