Competition in broadcasting

I refer to the article The Birth of a New Monopoly? (January 10). Given the concerns raised by the writer in the course of discussing aspects such as competition, free-to-air broadcasting, transparency and the role of the Broadcasting Authority (BA) we deem it necessary to clarify matters. In so doing, we hope to allay any such concerns.

The EU electronic communications framework has undergone a significant change over the past few years culminating in a new set of directives, published during 2003 in replacement of the 1998 regulatory framework. This new set of EU laws has been transposed into Maltese Law, in line with Malta's membership obligations.

One fundamental concept that the new regulatory framework deals with is that of technology neutrality. This is essentially in acknowledgement of the fact that technology is advancing with such leaps and bounds that, as a rule, any network over which electronic communications pass can be utilised for the provision of so-called triple-play, that is the provision of voice, vision and data services. Any such network or service falls to be regulated under the new EU framework, which is transposed into Maltese law via the Electronic Communications (Regulation) Act (Cap 399) and the relative subsidiary legislation.

By definition broadcasting networks (as distinct from broadcasting content which passes over them) are electronic communications networks. The national regulatory authority (NRA) that is responsible for the regulation of electronic communications in Malta is the Malta Communications Authority (MCA), as stipulated in Chapter 418 of 2000.

The same laws and regulations place the onus for frequency assignment to operators squarely on the MCA, as distinct from the responsibility for determining the purposes for which the frequency spectrum should be allocated. The Ministry for Competitiveness and Communications is vested with the latter responsibility.

On the operational side of things, the frequency assignment function that was carried out by the Wireless Telegraphy Department migrated to the MCA in July of 2004. This migration follows the pattern that has taken shape practically everywhere in Europe, where the NRA is responsible for the management (including assignment under specific conditions) of frequencies, in line with the national frequency plan.

The government issued a draft digital broadcasting strategy for public consultation in July of 2004. Responses were received and analysed and the final strategy document is expected to be published over the coming few weeks. What the strategy proposes is the creation of sustainable infrastructure-based competition in broadcasting networks. This is in line with the government's declared intention of moving away from monopolies. Joseph Muscat's concerns on this front are unfounded.

The frequency assignment method for broadcasting networks is to be transparent and non-discriminatory. Ultimately, therefore, if demand for frequencies exceeds supply a competitive process kicks in. This competitive process will commence once the government promulgates its digital broadcasting strategy in its final form. It is envisaged that frequencies will be assigned to any prospective network operators by mid-2005.

The five frequencies referred to by the correspondent pertain to a group of 15 frequencies for which Malta has sought and obtained the right to utilise locally, over and above the 12 frequencies that can currently be used in Malta. The right to use these frequencies has been obtained after a lengthy coordination process with neighbouring countries.

Five of these frequencies have been temporarily assigned to the prospective operator purely for test purposes. The temporary nature of the assignment has been made amply clear to the organisation concerned. The relative terms and conditions under which this temporary assignment has been made can be seen on the MCA website (www.mca.org.mt). The test is scheduled to end on April 30, 2005.

The organisation in question is the only one that has submitted its technical parameters for the coordination process that needs to take place with neighbouring states. It is therefore the only operator that can, at present, make use of a number of these 15 frequencies. It is also the only operator that has officially notified the MCA (and paid the relative fees) of its intention to start operating.

Notwithstanding all of this, it is still not a foregone conclusion that this operator will ultimately obtain a right to use frequencies on a commercial basis.

The draft digital broadcasting strategy makes the distinction between frequencies to be allocated for the provision of TV networks and those to be reserved for broadcasting of local content. The distinction should remain irrespective of the business model finally adopted. Free-to-air broadcasting is not in jeopardy. The role of the BA in assigning licences to local broadcast content providers therefore remains a fundamental one. One particular point to emphasise though is that in the digital environment one frequency equates to a potential five TV channels. Supplying each of the existing TV stations with a frequency equates to wastage of valuable air space and an arrangement whereby stations co-exist on one frequency will have to be found. Such an arrangement is eminently feasible.

Coordination and cooperation between the MCA and the BA has been ongoing even before the publication of the draft strategy document by the government. The BA will continue to be responsible for the licensing and monitoring of broadcast content providers. The MCA, on the other hand, will be responsible for regulating competition in electronic communications, including broadcast network operations.

We assure Mr Muscat that the intention is to engender a competitive environment. A second network operator (as a minimum) in broadcasting would remove an existing de facto monopoly rather than bring about a second one.

Ms Falzon is communications officer, the Malta Communications Authority.