Digital TV satellite costs to hit business: Libs

The Federal Opposition has warned that broadcasters who only offer TV via satellite will force regional and rural Australian businesses to pay up for satellite equipment under new legislation before the parliament.

The warning is in response to a report released by the Senate Environment and Communications Committee on Monday into the Broadcasting Legislation Amendment (Digital Dividend and Other Measures) Bill 2011. The legislation is designed to plan digital channels after the analog switch-off.

A section of the legislation lays out governance over whether communities in regional or remote areas receive the full range of digital TV channels via terrestrial receivers, or through the Viewer Access Satellite Television (VAST) satellites. The aim is to strike a balance between the costs for providers to install this infrastructure in small communities versus the cost for business to do the same.

The government will subsidise the cost of the installation of set-top boxes and satellite equipment for the 247,000 houses that will utilise VAST. However, the government estimates that the additional costs to premises will be between $200 and $350 and businesses are not eligible for the subsidy.

In the committee inquiry into the legislation, Broadcasting Australia and a number of other organisations raised concern that the cost for this installation was much higher than the government had estimated, with some putting the figure at costs between $1000 and $1500 after the government subsidy.

The committee ultimately rejected the concerns, highlighting that the Department of Broadband, Communications and the Digital Economy stated that the costs for satellite installation would be a one-off cost for homes and businesses.

However, Liberal Senator Mary Jo Fisher, deputy co-chair for the committee, said businesses would face significant costs to convert to digital television.

"If VAST is the only option available to business, then hotels, hospitals, nursing homes, caravan parks and the like will have to pay thousands of dollars extra to ensure that their customers, clients and patients are able to watch television," she said in a statement. "It's a double hit for remote and rural taxpayers who will have to pay to install new satellite equipment in their homes and businesses, as well as pay more tax to support the VAST subsidy."

"The government should provide equivalent services to all Australians and stop neglecting people living outside a capital city," she added.

Broadcasting Australia also raised concerns that the legislation could allow providers to opt out of providing terrestrial digital TV coverage in higher population areas in favour of the cheaper VAST service. However, the committee said it would not be in the interests of commercial operators.

"Commercial broadcasters have significant financial incentives — in the form of advertising revenue — to roll out digital terrestrial transmission, rather than avoid or shift their conversion expenses by encouraging the take-up of VAST through relying on exemptions in the Bill."