andreas grunwald

© 2009 Hogan & Hartson LLP. All rights reserved.

Dr. Andreas Grünwald Partner, Hogan & Hartson, Berlin

September 25, 2009

Germany’s Transition to Digital Broadcasting

International Forum “Digital Broadcasting in Ukraine”

2 © 2009 Hogan & Hartson LLP. All rights reserved.

Outline

• German Market Background

• Digital Switch-Over: The Berlin Example

• Current DTT Roll-Out in Germany

• The Digital Dividend Discussion

• General Legal and Policy Issues


TV Infrastructures in Germany (1)

Nationwide

Source: SES Astra, per end of 2008


TV Audience Shares

Source: KEK, 2008 average


Regulatory Framework

Federal Level States Level

Telecommunications Broadcasting

•  Spectrum Management

•  International Coordination

•  Allocation / Assignment

•  Withdrawal of analog transmission licenses

•  Licensing of digital network operators

•  Freedom of broadcasting

•  Public service definition

•  Withdrawal of analog broadcasting licenses

•  Licensing of digital broadcasters


Berlin Switch-Over Project 2002/2003

• Kick Off: “Launch Scenario 2000” –  Joint initiative by Federal and States governments / industry (broadcasters,

network operators, device manufacturers)

–  Proposed switch-off date: End of 2010 (not legally binding)

• Berlin Implementation –  Step 1: Make analog spectrum available

•  10/2002: 1 high-power analog frequency abandoned to launch 1 digital multiplex

–  Step 2: Simulcasting

•  2/2003: All commercial channels cease analog transmissions

•  Public broadcasters switch to low-power analog frequencies

–  Step 3: Analog Switch-Off

•  8/2003: Public broadcasters cease analog transmissions


•  MABB Switch-Over Ordinance –  No renewals of analog licenses upon expiry, but entitlement to get a digital license

–  Simultaneous analog switch-off of all nationwide private channels, subject to 6 months prior notice

–  Switch-off conditions:

•  All analog channels available on DTT, plus additional channels and extra services

•  Less than 10% of all TV households still depending on analog terrestrial service

•  Decoder availability at “affordable” price

•  Agreement with major private broadcasters (P7S1 / RTL) –  P7S1/RTL: 5 year commitment to make digital channels available for DTT broadcast

–  MABB: Commitment to compensate extra costs (subsidy, later declared illegal)

•  Must carry status on analog cable networks for all DTT channels

Berlin: Legal Framework


Berlin: Outcome

• Key Factors to Success –  Many (12) analog frequencies available for historic reasons

–  Only 6% terrestrial households ( = only 160,000 out of some 1.8 million households directly affected by loss of analog signal)

–  Media authority‘s round table approach

–  Brief simulcast period

–  Subsidies / Must carry status on analog cable networks

• Receiver Market –  Roundtable agreement to offer standard boxes below EUR 200

–  Price soon dropped to well below EUR 100

–  Some 40% of the boxes purchased by cable and satellite homes

–  Downside: Many „dumb“ boxes in the market w/o interactivity features


Berlin: Channel Allocations

Source: MABB project report


Berlin: Receiver Sales

Source: MABB project report


Current status of German DTT roll out

Analog switch-off completed by end of 2008

Source: www.ueberallfernsehen.de


Regional Infrastructure Break Down

Regional Break-Down

Source: SES Astra, per end of 2008


Digital Dividend Discussion

•  December 2008: Pilot project near Berlin to use broadcast frequencies for mobile internet services

•  Feb 18, 2009: Federal government broadband strategy –  nationwide 1 MBit/s coverage by end of 2010

–  75% 50 MBit/s coverage by end of 2014

•  March 4, 2009: Cabinet office decision –  470 to 790 MHz band: Broadcast services

–  790 to 862 MHz band: Mobile Internet services

•  June 12, 2009: Bundesrat approval

•  Oct / Nov 2009: Federal telecoms regulator to decide on auction design

•  Q2 / 2010: Auctioning of 790 MHz to 862 MHz spectrum


General Legal and Policy Issues

• Market environment

• Length of simulcast period

• Use of subsidies

• Availability of decoder boxes

• Marketing / public awareness

• Non-discrimination of other transmission infrastructures

• Must-carry status for DTT channels on analog cable networks

• Encryption of digital signals to protect copyrights

• Use of digital dividend


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