Comparison of the costs of implementing two restack planning approaches
Engineering Report TPS2011/02
FEBRUARY 2011
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acma | 1
Contents (Continued)
Contents
Executive Summary
1Introduction
2Development of the costing model
2.1Overview
2.2Assumptions
3Per unit parameter cost estimates
4Results
4.1Overall cost estimates
4.2Cost breakdown: broadcast service and site categories
4.3Cost breakdown: major equipment categories
4.4Cost breakdown: hardware and non-hardware elements
5Sensitivity analyses
5.1Outline of sensitivity studies
ANNEX 1 – Assumed antenna types to be used at each site
ANNEX 2 – Assumed input arrangements for digital television services
ANNEX 3a – Assumed transmitter range categories
ANNEX 3b – Assumed combiner arrangements at each site
ANNEX 4a – Overview flowchart of cost model: TRU Method
ANNEX 4b – Overview flowchart of cost model: Replacement Method
ANNEX 5 – Transmitter/combiner requirements for simulcast scenarios
ANNEX 6 – Assumptions used in deriving per-unit cost estimates
ANNEX 7 – Site-by-site cost breakdown for each planning approach and implementation method
ANNEX 8 – TRU capital cost estimates
acma | 1Executive Summary
This report describes a model that can be used to estimate the cost of implementing alternative restacked channel plans. The model has been used to compare different restack planning approaches and implementation methods.
A simplified, high level overview of the algorithm used in the costing model is that the total cost for each channel plan is determined by summing for each channel at each site the cost of retuning or replacing the transmitter and combiner, the cost of replacing the antenna if required, and the cost of any input feed changes. The cost of other equipment required to provide a simulcast can be optionally included. Flowcharts, provided in Annex 4, illustrate this high level logic.
The per-unit cost and time estimates used in the model have been derived from a consultancy report that was commissioned by the ACMA. Those data are based on averaged “list” prices for equipment and current practices for installation or retuning work undertaken by contractors. The per-unit costing data have been aggregated to include both equipment and installation and related costs.
A key part of the costing comparison was to compare the block and minimum moves planning approaches and to compare the two alternative methods of implementing the restack.
The first implementation method considered was a ‘replacement method’ where the majority of existing transmitters and associated combiners are replaced with new pre-tuned equipment. The second ‘temporary retune unit method’ or ‘TRU method’ assumes the use of portable units comprising a set of transmitters and necessary combiner equipment so that the digital television transmissions can operate from this temporary retune unit (TRU) while the existing transmitters are re-tuned in situ to new frequencies.
A significant advantage of the TRU method is the cost saving due to only having to retune the majority of existing equipment rather than purchase new equipment. Both implementation methods avoid the concerns about multiple overnight outages that would require viewers to rescan their receivers on multiple occasions.
These overall cost estimates are summarised in Table 1. In addition to providing overall cost estimates a breakdown according to broadcaster and site categories is provided below.
Table 1: Breakdown of costs associated with different retune methodsService Type / TRU Method / Replacement Method
Minimum Moves
($M) / Block
($M) / Minimum Moves
($M) / Block
($M)
National / 5.3 / 7.2 / 9.0 / 13.2
Commercial / 7.7 / 8.1 / 14.9 / 18.7
Gap filler/retransmission site services / 4.6 / 3.7 / 8.0 / 7.6
Total / 17.6 / 19.0 / 31.9 / 39.5
In addition to calculating the costs for each planning approach and restack implementation method, a series of cost breakdowns and sensitivity analysis were completed to determine the major contributors to overall costs and the impact that changing various input parameters might have on the total cost. Those analyses found that transmitter related costs are the most significant cost component of total costs. They represent in the order of 35% of total costs for the retune implementation method but around 55% for the replacement model. These cost components had reasonably similar impacts under either restack planning approach. The higher impact for the replacement method is readily understood due to the increased number of new transmitters that are required under the replacement method.
A sensitivity analysis of the impact of potential cost increases (or decreases) in transmitter and combiner hardware costs found that the TRU method has little sensitivity (in the order of 5% for a 20% change) to transmitter and combiner hardware costs but that under the replacement method there is much more sensitivity (in the order of a 13% change for a 20% change) to transmitter and combiner hardware cost changes. Again this is understandable due to the larger number of transmitters being replaced under the replacement method.
During industry consultation, commercial broadcasters indicated that per-unit costs and per-unit time estimates used in this analysis might be too conservative. To test the impact of this claim a sensitivity analysis of the effect of varying the per-unit cost (which is a close proxy for time) of transmitter and combiner retuning and installation work was performed. It found that the retune cost (and therefore retune time) has a fairly mild impact on overall costs (in the order of 3-5% for a 20% change).
There has been discussion about the need for, and if needed the extent of, digital-digital simulcasting. To test the cost impact of simulcasting, two cases were studied. These were a low ‘key metro only’ and a moderate ‘key metro plus Cairns and Townsville’ case. The analysis found that for the Minimum Moves plan both simulcast options would add $2.2 million to total costs. In the case of Block plan the cost increase for the moderate simulcast case was $3.3 million, while for the low simulcast option it is $2.4 million. The reason for the difference was a need to buy 2 UHF transmitters for Townsville. If a high level of digital-digital simulcasting were to be provided across Australia (where a much greater number of high power transmitters may be needed) this would become quite expensive. Therefore in considering simulcasting careful consideration of the costs and benefits will be required.
Summary
Based on the costing model used (and its associated per unit cost assumptions) the TRU method of implementing the restack leads to considerably lower overall costs than for the alternative replacement method for both planning approaches. If a TRU implementation method is used there is no significant overall cost difference between the block and minimum moves planning approaches.
acma | 11Introduction
The purpose of the report is to present a costing model and to use that modelto make costing comparisons between different restacked channel plans. In particular the costing model is applied to two indicative digital channel plans that are representative of the ‘block’ and ‘minimum moves’ planning approaches. Those indicative channel plans and their development have been discussed in Engineering Report TPS 2011/01 “Digital Dividend: Comparison of two restack planning approaches”.
The costing model allows indicative absolute costs to be compared and, more importantly, it allows relative costs to be compared. Relative costs are likely to be a more reliable indicator since these are expected to be less affected by particular assumptions or variations in costs of particular items.
The model canalso be used to perform sensitivity analyses on the effect of varying input parameters such as transmitter pricing, labour costs etc.Such analyses will enable an evaluation of which attributes of each planning approach contribute to any difference in overall cost. This evaluation could be valuable if a hybrid planning approach is to be considered as an alternative to the ‘block’ and ‘minimum moves’ planning approaches.
The costing model can also be used to estimate the cost break-downs for individual broadcasters, for example it can be used to estimate the costs attributable to government-funded national broadcasters. For commercial sensitivity reasons, data on costs for individual broadcasters will not be provided in the public release of this report. However, a breakdown between the national and commercial broadcasters has been explored and shown in the results.
The costs of implementing the different planning approaches will be an important element of the ACMA’s evidence-based decision making process, however other factors such as the level of disruption to existing services, the time-to-implement, the benefits that may be attributable to each approach and the flexibility of each approach to accommodate future developments will also be considered.
2Development of the costing model
2.1Overview
Engineering Report TPS 2011/01 presents and describes the development of two indicative channel plans for Queensland that illustrate the “minimum moves” and “block” planning approaches. It also uses a number of metrics to make quantitative comparisons of both planning approaches. The major differences between the planning approaches identified in that report were that, in comparison with the minimum moves planning approach, the block planning approach had:
more channel changes (including at high power sites);
more sites with one or more changes;
more changes to services with off-air fed inputs;
fewer off-air fed inputs on channels that are adjacent to an output channel at the same site.
There were generally similar numbers of existing combiners requiring changes to digital channels (though for the minimum moves planning approach at three high power sites no combiner changes are required and at a fourth high power site no change is required to the current UHF combiner).
To further explore and quantify the cost impact of these differences a detailed costing model has been developed.
Flowchart diagrams that summarise the high level logic that has been implemented in the cost model are given at Annex 4.
A simple view of the costing algorithm is that the total cost for each channel plan is determined by summing, for each channel at each site:
the cost of retuning or replacing each transmitter affected by a change;
the cost of retuning or replacing each combiner affected by a change;
the cost of changes to input feed arrangements (where applicable);
the cost of replacing the antenna if that is required;
if applicable, the cost of extra transmitters, combiners and other equipment that may be required to provide a simulcast.
In practice the algorithm is more complex than this simple explanation might imply. For transmitter, combiner and antenna retune/replacements in addition to the basic equipment and installation costs the costing algorithm includes allowance for a pre-work scoping visit to each site, off-site preparatory work such as ordering equipment and arranging delivery, freight, staff mobilisation/ demobilisation, daily allowances to deploy staff to the site, commissioning and electromagnetic energy(EME) reports, equipment removal and other site clean-up work.
Further, an overall project management overhead of 5% and a contingency allowance (to cover contingencies such as delays due to poor weather or unexpected events) of 5% have been added. For simplicity these items were applied to the summation of all the foregoing items. The same percentage values will be applied for both planning approaches.
The major factors affecting cost (and time-to-implement) are:
Transmitter retuning or replacement
Combiner retuning or replacement
Antenna replacements
Changes to off-air feed arrangements
Requirements for additional transmitters and combiners during any simulcast period.
Of particular importance are the costs related to changes at high power sites. Therefore the costs of transmitter and combiner changes/replacement are recorded in the costing algorithm as multi-level functions that depend on the power rating of the equipment with higher power services having significantly higher costs than lower powered equipment.
Note:
Labour and mobilisation/demobilisation costs will be a large contributor to the total cost, but these are built into each of the “equipment related” elements of the costing model.
2.2Assumptions
Sites considered
The basis for cost comparisons is the Queensland regional and metropolitan licence area sites included in the indicative channel plans provided in Engineering Report TPS 2011/01. That report included channels at 75 sites that have one or more broadcaster operated services and 27 sites that are either digital conversions of existing analog retransmission services or new gap filler services that have been proposed by regional Queensland or Brisbane broadcasters.
Methods of implementing the restack
One of the key assumptions underpinning this work is the need to minimise disruption to the viewing public. An aspect of this, which was strongly supported by broadcasters during preliminary industry consultations, was that all services at a site should be restacked during a single night-time outage. This is because it is undesirable for viewers to have to rescan/retune receivers more than once.
In a companion report[1] data are presented that indicate that, irrespective of transmitter power level, it may be difficult to rely on being able to retune more than one transmitter (and an associated combiner) during a single overnight outage.
To address the concern about multiple overnight outages, two alternative implementation methods were considered:
a ‘replacement method’[2] where existing transmitters are replaced with new “parallel installed” transmitters and an associated combiner that are pre-tuned to final channels and cut-over on one night;
a ‘temporary retune unit method’(or TRU method) that is based on use of a set of transmitters and an associated combiner (that might be mounted in a portable container, truck or a transportable equipment rack) that are pre-tuned to the final channels but can be easily moved to a transmitter site and temporarily cut-over to the antenna system while the currently installed transmitters and combiner are retuned in situ to their final channels. After the retuning is completed the antenna would be reconnected to the now retuned existing transmitters and combiner and the portable temporary equipment can then be disconnected and moved to the next site requiring retuning.
The replacement method will result in high cost estimates and might be difficult to implement at sites that have limited available floor/rack space (though this is of less concern after analog equipment is removed). This method might however have advantages if a simulcast is being considered at the site in question.
The TRU method should result in lower overall costs since it mostly involves transmitter retuning rather than replacement, which will more than offset the capital costs of a number of temporary retune units). Under the TRU method the minimum moves planning approach has higher per-site cost and time requirements for retuning of combiners (and to a much lesser extent transmitters) because, in the general case, in addition to retuning of existing on site transmitters and their associated combiner, the channels of the TRU also need to be retuned before it can be put into service at the next restack site.
While a finalised sequencing plan for restacking digital services will require detailed consideration and refinement, it is visualised that under the TRU method one (or two) temporary retune unit(s) for retuning high power sites, and a number (perhaps five[3]) of temporary portable retune racks (possibly mounted in a vehicle) would be required for lower powered sites. An initial high level estimate of the capital costs of the TRUs is provided in Annex 8.
Combiners
At sites that have no digital channel changes it is assumed that existing combiners can be used without new costs being incurred. There has been discussion about the need or otherwise to remove or terminate current analog channel ports. However in either case that cost should be associated with the switch-off of analog services, it should not be seen as, or costed as, part of a digital-digital restack process.
This costing comparison has assumed that costs of establishing service(s) using the unassigned channel should be associated with the establishment of the services on the unassigned channel and should not be considered as a “restack” cost.
High power UHF sites (with ERP of 20 kW or more) are assumed to be equipped with waveguide combiners.
It is assumed that high power waveguide combiner units cannot be retuned or redeployed without factory retuning. Further, for the purpose of initial modelling it is assumed that waveguide combiners that are freed up as a result of replacement cannot be deployed at other sites in Queensland.
Other, non-high power UHF sites, including Gold Coast (Mt Tamborine) are assumed to have coaxial combiners.
All VHF combiners are assumed to be non-waveguide combiners.
At most sites it is assumed that there will be a single combiner (per band). However two VHF combiners were assumed at Brisbane due to main/standby considerations. Two UHF combiners were also assumed at Gold Coast (Mt Tamborine), Sunshine Coast (Bald Knob) and Darling Downs due to services feeding different antennas (due to the need to provide different patterns). At each of the Gold Coast and Sunshine Coast the combiners would be 3 channels and 5 channels. At Darling Downs the combiners would be 2 channels and 3 channels.