Open letter regarding the decision to reduce the scope for television broadcasts in the terrestrial network

“We, the undersigned , are deeply concerned by the process initiated by the Swedish government to shut down television broadcasts in the so-called 700 -band of the terrestrial network already by 2017. A decision that has prompted the Swedish Authority for Radio and Television to announce that it will assume that as of April 1, 2017, there will be only five broadcasting networks available for TV broadcasts , even though Teracom, the state owned infrastructure and network facilitator, has acknowledged that it is possible to release a sixth transmitter.

With only a month remaining before all the commercial broadcasting licenses for television expire and new licences were to be allotted, the Government decided to close down a large portion of the space for terrestrial television in Sweden. The decision results in major disadvantages for viewers as well as media companies - and by extension all the creative industries related to television.

We are astounded by the lack of transparency regarding the process leading up to the decision and the lack of knowledge that seems to exist regarding its impact. We claim that that the process behind the decision is both legally insecure and undemocratic. The decision has different implications for different parts of the market:

1) For commercial broadcasters, who four months ago applied for a six-year license, the situation is legally insecure and unclear. Without knowing whether they will get three - or six-year authorizations and without any information about the conditions that will apply to SVT they have been expected to recalculate their investment plans within a few days and to consider a situation which the legislator has previously declared may only occur in very extreme cases. The Government's tardiness in the 700 -band process can hardly be considered such a case. All the facts have been on the table since September 2013.

If the Government proceeds in this direction, the commercial broadcasters that will lose their license, will have three days to cease their operations and shut down their business. This cannot be in accordance with the Swedish democratic system or judicially justifiable.

2) The commercial broadcasters, and the audience, will also be forced to migrate to new technologies. This means that a large portion of the audience will no longer be able to receive commercial television unless they acquire a new box or TV no later than 2017. This is a strong disadvantage to channels like TV4 that are in close competition with SVT. A good portion of the audience will only have SVT channels to choose from – a situation similar to the days of monopoly. The situation comes completely unprepared. There are no governmental preparatory work that takes the present situation into account. This is a blow to the plurality of the Swedish TV landscape.

3) With just a few days’ notice the Public Service Broadcasters, SVT and UR, have been given a choice between three basic options.

1 ) To initiate a forced migration of public service broadcasts by 2017. If SVT would do this, SVT would both take on the responsibility to carry out the Governmental decision to get the households to acquire new equipment and expose the terrestrial network to an extreme stress. The migration would cost a considerable amount of money that SVT does not have. SVT is the only company in a position to refuse to migrate to new technologies. SVT thus has no other option than to refer to the remit of February 2014 and refuse to migrate by 2017.
2) To accept radically increased distribution costs with the same programming remit. The increased cost depends on how many of the commercial companies choose to remain in the terrestrial network to share the total cost. At best this will result in a cost increase of at least 10 million Euros during the licensing period. To cover the increased cost the money would have to be taken from the programme production budget.
3) To reduce the technical quality of the broadcasts and cease with HD broadcasts on April 1st 2014 across all platforms except satellite. This would make up for the increased costs and scheduling could be maintained.

In all three cases the TV license fee payers will get less value for the fee they pay. The trust and confidence in Public Service Broadcasting and the government's media policy will suffer gravely. By the decision regarding the 700 frequency the Government has altered the conditions for SVT in a way that is in conflict with the November 2013 Parliament decision, with eight parties backing it, on the broadcasting of SVT 2014-2020. The Government has put Sweden in a similar situation that made the Finnish TV-licensing system crash and put YLE in economic crisis.

4) It is noteworthy that the government has not in one word considered the fact that tenths of million Euros will be taken out of Swedish content production, in the commercial sector as well as in the Public Service sector. No analysis of the impact on the Swedish media industry has been presented.

5 ) The government has created an urgent crisis for the terrestrial network. Moreover, it has so far rejected the possibility that exists to facilitate the transition by ensuring a sixth transmission network for television in the band below 700 MHz. This possibility has been put forward by both Teracom and The Swedish Post and Telecom Authority. The Government has therefore initiated a process that will have major implications on the Swedish media landscape. The balance between different forms of distribution and between content providers and distributors stands to be fundamentally changed. The media companies find themselves in a position of total dependence on the leading telecom companies. The telecom companies have also announced that they will begin charging for the distribution of the media companies' content over the internet. If the terrestrial network becomes less attractive for the commercial television companies it will ultimately lead to a situation where there is no longer any opportunity to distribute television content freely in Sweden.

In light of the above implications we cannot accept the premise that it is necessary to force the release of the 700 Mhz frequencies to the telecom companies. It was the considerable negative effects on the TV market that made us, the Government's expert authority, Teracom, and a range of others to advise against a forced process with a three-year phase-out of TV broadcasts .

We share the conviction that our services need to reach out through a developed broadband infrastructure. Therefore, we want to help create favourable conditions for a strong digital IT infrastructure that is based on a combination of broadcast and broadband, mobile and fixed. It is entirely possible to release spectrum to telecom by 2020 by an orderly process with the involvement of the television industry. That is a model that would satisfy the needs of both the television and the telecom industries. There is in the foreseeable future no chance that the mobile broadband networks could bear the society's need for television.

The government could not have foreseen the consequences of the decision that now turn out to be stronger than expected. We therefore urge the Government to reconsider or to immediately account for the plan that hopefully exists for dealing with the acute situation the industry finds itself in, as a result of the Government's decision.”

Eva Hamilton. CEO SVT
Casten Almqvist , CEO TV4 Group
Jonas Sjögren , CEO SBS Discovery