The Convergence of Telecommunications and Broadcasting (Fall' 06)
The Convergence of Telecommunications and Broadcasting (Fall' 06)
The Convergence of Telecommunications and Broadcasting (Fall' 06)
and Broadcasting
Fall 2006
Kijoo Lee
Contents
I Introduction
IV Regulatory Institutions
1
Ⅰ. Introduction
해당부서명 입력 2
Convergence
3
Government objectives for policies in the communication sector
Economic objectives
• Promote and sustain competition and choice as a mean of minimizing price
and maximizing quality of communications services
• Encourage investment and innovation
• Maximize the contribution of the communication sector to economic growth
and performance
• Efficient allocation of spectrum
5
Rapid development of the Internet
• These services often do not fit easily into existing regulatory definitions
and frameworks
6
The regulatory frameworks
Over the last decade, the drive to liberalize the telecommunications market has
seen the development of regulatory frameworks specifically to manage the
transition from monopoly to competition and to stimulate the roll-out of new
technologies and services
The major influences underlying the regulation of broadcasting have been the
social and cultural impact of the industry and the shortage of spectrum
• Broadcasting remains highly regulated
• Licenses are used to control entry and a wide range of technical and content
conditions are attached to licenses
7
Ⅱ. The Regulatory approach to
new services
해당부서명 입력 8
The Regulatory approach to new services (1)
The emergence of new services which have some characteristics of
broadcasting challenges existing broadcasting policy and regulation
9
The Regulatory approach to new services (2)
< Video on demand >
• Canada, U.K., New Zealand: VOD would be regarded as broadcasting
• Finland, Japan, Portugal, Sweden, Korea: not broadcasting or a
telecommunication service
• A situation could develop where the same or similar content faces different
regulatory obligations depending on how it is divided
10
Audio-visual services over the Internet(1)
Broadband audio-visual services are currently unregulated or subject to
very light regulations in most OECD countries since they are not
encompassed in existing service definitions
• These broadband services don’t fit into existing broadcasting definitions
11
Audio-visual services over the Internet(2)
• Broadband audio-visual services would tend to fall within a ‘grey zone’ in terms
of the applicability of regulations but with a closer affinity to video-on-demand
where strict broadcast content regulations do not normally apply
12
Ⅲ. Shift from Industry based
Regulatory Structure
해당부서명 입력 13
A vertical approach to regulation
14
The development of digital technologies (1)
15
The development of digital technologies (2)
• The owner of a network could face different regulations for the delivery
of telephony, broadcasting and the Internet, despite the fact that all are
being delivered by the same network
• The same service delivered over different networks could face different
regulations
• These developments undermine the principle of consistency
→ Without consistency, regulation can bias outcomes in favour of one
type of technology or service or service provider
• The operator of the carriage network may be delivering the services of
a number of broadcasters
16
A horizontal approach to regulation (1)
Telecommunications Broadcasting
content
content content
carriage carriage carriage
17
A horizontal approach to regulation (2)
해당부서명 입력 19
The number and roles of regulatory authorities(1)
There has been much debate about the implications of convergence for
the number and roles of regulatory authorities in the communications sector
• The discussion has focused on whether there should be a move to two regulators
(one for carriage matters and another for content) or whether both roles would be
best performed by one regulator
• An equally important point is the relationship between the competition authority
and the communications regulator(s)
② The need for clarity (from the point of view of both industry and regulators) as to
which regulator has authority on a particular issue
20
The number and roles of regulatory authorities(2)
③ The value in minimizing the number of regulators that an enterprise needs to
deal with
④ Efficient public administration
21
Competition policy and access regimes(1)
It will not be possible to treat carriage and content issues as independent
and mutually exclusive issues
• As the impact of convergence becomes more pervasive, competition policy and
access regimes will be increasingly important tools for achieving both objectives
of competition and plurality
• The regulators are independent from the actors in the sector and are
perceived by the community to be independent
23
Competition policy and access regimes(3)
24
Competition policy and access regimes(4)
• U.S.
- DOJ or FTC examines proposed mergers and acquisitions to determine whether they
would violate the antitrust laws (competition policy)
- Simultaneously, FCC reviews any license transfer applications needed to effectuate
the acquisition or merger for consistency with the Communications Act and any of
the FCC’s policies regarding competition, diversity and the public interest
25
Ⅴ. Response to the Convergence of
Telecommunications and Broadcasting
in Korea
해당부서명 입력 26
Contents
Policy direction
for reformfor
of convergence of
2 Direction policy and regulatory
telecommunications and broadcasting
institution of
telecommunications and broadcasting
해당부서명 입력 27
1. Status of convergence of
telecommunications and broadcasting
해당부서명 입력 28
Convergence of Telecommunications and Broadcasting
Convergence
Convergence of
of telecommunications
telecommunications and
and broadcasting
broadcasting
The
The accelerating
accelerating development
development of
of BcN
BcN and
and convergence
convergence in
in content,
content, network
network and
and terminals
terminals
are
are eroding
eroding the
the boundaries
boundaries of
of telecommunications
telecommunications and
and broadcasting.
broadcasting.
Development
Development phases
phases of
of convergence
convergence
At present: separation Initial stage of convergence In the future: integration
Telecom Broadcasting Telecom Broadcasting Telecom Broadcasting
Service Service Service Service Convergence
Broadcast Voice/data Broadcast
Broadcast
Voice/data
Voice/data Broadcast Voice/data programs contents Voice
Voice ++ Data
Data ++ Image
programs
programs programs contents Image
Telecom
Telecom Broadcasting
Broadcasting Voice Network + Data Network
Telecom
Telecom Broadcasting
Broadcasting Network
Network Network
Network Network
Network + Broadcasting Network
Network
Network Network
Network
Telecom
Telecom
Telecom Terminals TV
TV
Telecom TV Terminals Terminals
Terminals Telephone
Telephone ++ PC
PC ++ TV
TV
Terminals
Terminals TV
29
Factors for accelerating convergence
Saturation of the
Advances in IT : BcN telecom and broadcasting
and digitalization market and the need for
new business model
Telecommuni-
convergence Broad-
cations casting
Changing market
Growing demand for environment:
segmented and deregulation and
customized services Rapid advances in technology are blurring the facilitation of
traditional boundaries of telecommunication and competition
broadcasting.
30
Future prospect for convergence
Anytime, Anywhere, Any-content :
Ubiquitous Content Access
Intelligent
handset
Home gateway
HDTV Intelligent
Integrated network of Networked home
Anywhere telecommunications home
appliance
and broadcasting appliance
Game
Content console
Satel
lite AV program
Package
Customized program Portable 3D TV
digital Multimedia Computer Anytime
appliance
Cable
Terrestrial
broadcast
Fixed/wireless
telecom network HDTV T-commerce
PC
Real-like sound and
image DMB terminal
31
Current regulatory framework for convergence
PSTN
Telecom
Telecom network
network
TV
TV
Mobile
Web-
Telecom
network
communications Web-
phone/
phone/ iCOD
iCOD casting
casting One way/content-focused
Broadband VoIP
VoIP Internet
Internet
Internet
Broadcasting
Satellite
network
Satellite Satellite
Satellite broadcast
broadcast
CP Satellite Cable
Satellite DMB
DMB
interactive/network-focused VOD Terrestrial
Terrestrial DMB
DMB
Data Groundwave
Cable
Cable CATV
CATV
broadcast Terrestrial
Internet
Internet Terrestrial broadcast
broadcast
VoIP
PP PP
Entry
Entry regulation
regulation 49% of foreign ownership 49% of foreign ownership
(only for facility-based service Conglomerates and media companies are restricted.
Providers) notification
< competition promotion/universal > < public benefit/neutral >
operation
operation
Operation regulation is imposed Business area Programming
regulation
regulation
on players with SMP. Channel Re-transmission of terrestrial
broadcast
Content
Content regulation
regulation
Illegal or harmful information ? Illegal and harmful information
Fairness/morality/democracy
32
MIC and broadcasting
Ministry of Information and Communication
Entry in to the
Development Management Licensing and Introduction of
foreign
of broadcasting of broadcast management new broadcasting
broadcasting
technology frequency of broadcasters service
market
33
Public interest theory vs. Industry determination theory
In case market failures take place, government Extent Government intervention is minimized, and
intervention is indispensable market economy principles are respected.
Perspective
Correction of market failures Consideration of interests of stakeholders
Diversity Pro-
Pro-competition
Plurality Key words Deregulation
Impartiality Efficiency
Localism Globalization
34
2. Policy direction for convergence of
telecommunications and broadcasting
해당부서명 입력 35
Basic directions
Securing the global competitiveness of the IT industry and enhancing consumer benefits
36
Early facilitation of convergence services
Foreign examples
Implications
▶ The application of the Broadcasting Act that focuses on public interests to IP-TV may
hamper early introduction of new services
IP-TV embraces features of both telecommunications and broadcasting.
▶ The key issue of IP-TV lies in discrimination in regulating IP-TV operators and CATV operators.
The solution would be to ensure fairness by lifting regulations on CATV operators.
▶ Apart from the ongoing discussion on the institutional changes, the early introduction of converged
services such as IP-TV needs to be addressed under the current policy coordination system.
In order to ensure policy consistency and avoid redundancy in investment, MIC and the Broadcasting
Committee need to cooperate in implementing pilot projects and enacting related acts.
37
Redefinition of public interests
▶ Redefinition of public interests in broadcasting in line with the ubiquitous digital era
▶ Continued exploration of ways to provide public programs and ensure universal access
Establishment of the institutional framework including a new regulatory body and enforcement
38
Promotion of Market Principles in the
Telecommunications and Broadcasting Sector
39
Development of high quality content and
strengthening of distribution channels
40
3. Policy Direction for IPTV
해당부서명 입력 41
Concept (1)
Web Server
(Billing/User Mgnt)
Contents
DB
Modem
Internet
TV STB
Program Streaming Server
(Data Transmission Mgnt)
TV
Real-time Encoder
IP-TV H/E IP-TV
42
Concept (2)
43
Features
Technol
ogical ICOD service Broadcast
develop
ment wil
provide
IP-TV wi
l (VOD, GOD, e-commerce programs
greater s th Internet search and etc.) in real time
calability
.
44
Market forecast
IP -TV is expected to have a great impact on the industry
IP-TV
< Global Market > < Korean Market >
15.6 329.8
2006
2003
2008
2.5
2007
10.2 227.7
128.5
3
24.3 0.41
0.4 0.73 0.73
Service
Service market Subscribers
Subscribers Equipment
Equiment market Service market
Se r v ic e SuSubscribers
b s c r ib e r s Equipment
Eq u im e nmarket
t
market ($) market ($) market (won) market (won)
(billion $) (million) (billion $) (million $) (million) (million $)
Source: MRG. CA, the U.S. (2004) Source: DongSeo Research (2004)
• The number of IP-TV subscribers and the IP-TV market are expected to grow by 79% annually
and 102%, respectively at the global level
- (’04) 1.9 million, 635 million US$ → (’08) 2.5 million, 7.2 billion US$
• The number of IP-TV subscribers in Korea is expected to rise to 4 million by 2012 at an annual
growth rate of 34% on the assumption that service is available from 2006.
- By 2012, industry revenues are expected to reach 1 trillion won while a total of 3.7 trillion won is
expected to be spent on facility investment and maintenance.
45
Legal issue (1)
Telecommunications and broadcasting described
described in
in the
the Constitutio
Constitutionn
◆ Under the Article 21 of the Constitution, telecommunications and broadcasting both are one
of the means of exercising the right of freedom of expression
- Article 21 of the Constitution
① All citizens shall enjoy freedom of speech and the press, and freedom of assembly and
association
② Licensing or censorship of speech and the press, and licensing of assembly and
association shall not be recognized
③ The standards of news service and broadcast facilities and matters necessary to ensure
the functions of newspapers shall be determined by Act
④ Neither speech nor the press shall violate the honor or rights of other persons nor
undermine public morals or social ethics. Should speech or the press violate the honor
or rights of other persons, claims may be made for the damage resulting there from
46
Legal issue (2)
Whether IP -TV can be considered a ““broadcasting”
IP-TV broadcasting” service
in accordance with the Broadcasting Act
47
Legal issue (3)
IP -TV belongs to telecommunications service in accordance
IP-TV
with the Framework Act on Telecommunications
◆ Under
◆ Under the
the current
current legal
legal framework,
framework, “telecommunications”
“telecommunications” set
set forth
forth in
in the
the Framework
Framework
Act
Act on
on Telecommunications
Telecommunications include
include “broadcasting”
“broadcasting” of
of the
the Broadcasting
Broadcasting Act
Act
-- Since
Since broadcasting
broadcasting is
is one
one of
of the
the various
various types
types of
of telecommunications,
telecommunications, itit is
is hard
hard to
to exclusively
exclusively
separate
separate broadcasting
broadcasting from
from telecommunications
telecommunications
-- Since
Since IP-TV
IP-TV is
is not
not included
included in
in types
types of
of broadcasting
broadcasting services
services enumerated
enumerated in
in the
the Broadcasting
Broadcasting
Act,
Act, the
the Framework
Framework Act Act on
on Telecommunications
Telecommunications thatthat is
is more
more comprehensive,
comprehensive, isis applied
applied to
to IP-TV
IP-TV
◆ IP-TV
◆ IP-TV belongs
belongs to
to “telecommunications
“telecommunications services”
services” stated
stated in
in the
the Framework
Framework Act
Act on
on
Telecommunications
Telecommunications since
since information
information transmitted
transmitted and
and received
received is
is classified
classified as
as
telecommunications
telecommunications and
and interactivity
interactivity constitutes
constitutes an
an intermediary
intermediary service
service
48
Basic Policy Direction
Introduce IP-TV first and then focus on establishing the regulatory framework
The converged services of telecommunications and broadcasting such as IP-TV are now
at the initial stage
It is desirable to impose a minimum of regulation at the initial stage and to give active
supports to facilitate new services
- Advanced countries are trying to reduce regulation on new services to the minimum (ex: FCC’s
hands-off approach to new services in the U.S. and OFCOM’s light touch regulation in U.K.)
The results of BcN pilot projects will be the basis for determining the level of regulations
The Ministry of Information and Communication and the Broadcasting Committee are
jointly implementing pilot projects
- Considering all the aspects of IP-TV including social, cultural, technological, industrial and legal
aspects, market demand forecast, technology development, content and etc
- Holding the 5th Multimedia Policy Consultation (June 3, 2005) where a decision to implement
IP-TV pilot projects before the enactment was made and MIC and the Broadcasting Committee
agreed to jointly implement pilot projects
49
Regulatory framework
Need to enact the Converged Service Act in order to introduce IP-TV
as early as possible and facilitate related services
Telecom companies provide IP-TV via IP-based networks
- Leading to greater scalability of ICOD
Considering that broadcast programs in real time provided by IP-TV belong to
broadcasting, a special act that classifies IP-TV as another independent area is needed
MIC and the Broadcasting Committee should continue to discuss specific matters
concerning converged services
50
Content development
Content is the key to discussions on convergence
- A wealth of content contributes to enhancing users’ benefits by expanding
their choices
53
Basic principles
54
Time to change
Every service evolves!
Both telecommunications and broadcasting are undergoing digitalization
- Advanced converged services including IP-TV, digital broadcasting, Wibro, HSDPA, WCDMA go
on increasing
Instead of the current ‘dichotomy’ approach to telecommunications and broadcasting,
a new regulatory framework that reflects the converged services is needed
- Regulations should not be an obstacle to new services
- The Internet is a new technology that is hardly regulated
55
Current Status of IPTV Pilot Project
Outline of IPTV Pilot Project
Host : Joint Promotion Committee for IPTV Pilot Project (MIC, KBC)
Purpose
- Verify Technology Potential and Business Model with regard to Interoperability between Communications and Broadcasting Technology,
Two-Way, Contents Security and Personal Information Protection
- Prove Usefulness of Utilizing Various Multimedia Contents
- Examine User Response such as Usage Behavior and Request for Improvement
Service : Real-time Broadcasting Program, Two-Way Communications Service(VOD, T-Commerce, Game, SMS etc.)
Service Period : 2006. Nov. ~ Dec.
Seoul, Kyeonggi
C-Cube
Handset& Yangpyung
Private Sector 26.2 billion Won Joint Project Promotion Equipment Company (350)
PP (C-Cube, Daum)
Seoul, Kyeonggi Anyang
Daum
(100)
Govt. : Private Sector
Solution Telecom
[ 1 : 21.9 ] Total 27.4 billion Won Company Operator Total 450
C-Cube: Govt.670 million Won/Private Sector 23.4 billion Won
Daum: Govt.530 million Won/Private Sector 2.8 billion Won
56
Positions of Related Organizations on IPTV
Ministry of Information and Korea Broadcasting Commission
Communication
For the smooth introduction of IPTV, a third Regulate IPTV under the Broadcasting Act
Legislation other than the Telecommunications because it is similar as the SO in terms of
Act and Broadcasting Act is needed transmitting broadcasting programs
▶Enactment of Broadband Convergence Service
Business Act(tentatively)
IPTV
Telecom Operators CATV Operators
Approve the Provision of Convergence Service Introduce IPTV after the complete
To cope with CATVs’ advancement to digitalization of CATV(2010)
TPS market
▶Operators hope for improvement of related legal
framework to ease regulation
57
Coordination and Future Plan between MIC and KBC
Current Progress
▶ MIC and KBC came to have similar views on the establishment of legal framework within ’07,
approval of simultaneous retransmission of terrestrial broadcasting, entrance of all-around channels and
news channels, reservation of foreign market opening, publishing a dictionary on technology standard,
introducing restriction on market share and easing regulation on Cable SOs
▶ But there are still other issues to be solved such as the characteristics of service and laws to be applied,
approval method, restriction on market entrance of facilities-based operators and business areas etc.
Future Plan
58
4. Direction for reform of policy and
regulatory institution of
telecommunications and broadcasting
해당부서명 입력 59
Korean authorities with respect to
telecommunications and broadcasting
Telecommunication Broadcasting
Policy
MIC MCT
Promotion
Technology/ KCC
economy Broadcasting
Regulation Committee
Information and Communication
Content
Ethics Committee
Regulation: licensing, investigation into and correction of unfair practice and content deliberation
60
Organization of MIC
61
Examples of foreign response: Overview
Policy Regulation Policy Regulation Policy Regulation Policy Regulation Policy Regulation
Telecomm-
Telecomm-
unications
Broad-
casting
Recently, Britain (2003) and Australia (Jul. 2005) have established a single regulatory framework
for telecommunications and broadcasting.
62
Examples of foreign response: U.S.A.
Since the Telecommunications Act (1934) was enacted, FCC has retained a committee-level
structure as a single regulatory body before the emergence of convergence takes place.
In addition to FCC, a single regulatory body, each state has its own regulatory system in place.
▶ FCC provides the comprehensive recommendations as a supervisory body.
The telecommunications history of the U.S. stated from Bell and its policy focus was on privatization.
▶ In order for easy entry into foreign countries, the U.S. tends to encourage other countries to adopt the
privatization-based policy system.
63
Examples of foreign response: Britain
In 1980s and 1990s, the policy focus of Britain was on deregulation and competition.
The broadcasting sector that traditionally highly valued public interests began to introduce
deregulation and a fair and effective competitive environment.
▶The ultimate objectives of deregulation and competition are the industry promotion and consumer protection
There has been a growing need for new policy and regulatory framework in response to digitalization
and convergence.
▶ Based on the Communications Act of 2003, OFCOM, an integrated regulatory body was created.
▶ According to the ‘Light Touch Regulation’ principle of the Communications Act, OFCOM is applying minimum
regulations to the telecommunications and broadcasting sector.
64
Examples of foreign response: Australia, Singapore, Malaysia
65
Discussion results of telecom-broadcasting convergence
promotion committee (1)
66
Discussion results of telecom-broadcasting convergence
promotion committee (2)
67
Discussion results of telecom-broadcasting convergence
promotion committee (3)
- Reach social consensus by hosting public hearings and discussions for relevant businesses,
organizations and the civil society
Submit related bills during the regular session of the National Assembly (December)
Aim to pass bills during the extra session of the National Assembly in February 2007
68