Prospectus of mobile TV: Another bubble or killer application?

Telematics and Informatics 23 (2006) 253–270 www.elsevier.com/locate/tele

Prospectus of mobile TV: Another bubble or killer application? Dong Hee Shin

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School of Information Sciences and Technology, Penn State University, Tulpehocken Road, P.O. Box 7009, Reading, PA 19610-6009, USA Received 27 June 2005; received in revised form 3 August 2005; accepted 24 August 2005

Abstract This paper investigates the prospectus of digital multimedia broadcasting from the technical, economic and regulatory issues and whether the market is evolving equitable, open, and competitive environment. Applying concepts of open access policy to the emerging technology of DMB, this paper attempts to gain a better understanding of how DMB will evolve and stabilize in next generation network environments. Three research questions guide this study: (1) How does DMB trigger a change in policy, market and industry structure? (2) What are the driving forces of the rapid DMB development in Korea? (3) Does DMB haul new generation network environment by disrupting the current network environment? As these questions involve socio-technical issues, this study uses a socio-technical perspective to investigate the complex relations between social and technical aspects of DMB by highlighting the co-evolving nature, diversity, and interface, which constitute the next generation network environment. The implication of next generation networks involves the dynamics of industry, regulation, and technology. Finally, this paper provides the DMB prospectus in reference to the next generation network environment. Ó 2005 Elsevier Ltd. All rights reserved. Keywords: Digital multimedia broadcasting; South Korea; Socio-technical framework; Next generation network

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Tel.: +1 610 396 6135; fax: +1 610 396 6024. E-mail address: [email protected]

0736-5853/$ - see front matter Ó 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.tele.2005.08.001

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1. Introduction Digital multimedia broadcasting (DMB) service allows cell phone and personal digital assistant users to watch terrestrial digital television on their portable communications devices. DMB is an emerging mobile application in next generation networks featuring a convergence, W-CDMA, wireless broadband, a layered policy, 4G wireless, and a middleware technology. Driven by a convergence of interests between consumer demand, operator ambitions, leading-edge network and device capabilities, and government policy, the DMB market in Korea has just emerged for the first time in the world as a global test-bed. The Korean DMB market is expected to surpass $800 million in annual revenues by the end of the decade (Asia-Pacific Telecommunity, 2004). DMB is changing the notion of broadcasting and telecommunications. The speedy trend of convergence has resulted in a new stream of personalized and mobile TV broadcasting services. Its mobility that can provide high-quality audio and video contents has been the most significant competitive advantage. In addition, DMBÕs flexibility of terminals (i.e., mobile phones, PDA, or portable TV) adds a significant edge. DMB is expected to evolve into a universal service under a ubiquitous computing environment and have an immense influence over other industries engaged in terminal and part production or contents development. Considering all of these projected impacts, DMB has a catalytic power opening new technological generation, so called, Next Generation Network (NGN) environment. DMB involves NGN features—convergence, a layer approach, advanced wireless, telecom mobility equipment, and a middleware. Despite optimistic projects, uncertainty still remains about where DMB will evolve and how it will impact on the new socio-technical milieu. This uncertainty inherently is embedded in any other emerging technologies. Surged by the hype prospectus of DMB, however, concerns of DMB are neglected or underestimated. This study attempts to identify prospectus, limitation and uncertainty embedded in DMB. By identifying uncertainty and possible destructive powers, this study finds a strategic option of DMB among appropriate regulation, industry dynamics, and market receptiveness. To this end, a socio-technical approach is used to investigate the complex and underlying issues of DMB. In fact, a socio-technical perspective can provide a stronger framework than any other approaches because of its integrative and holistic nature (MacKenzie and Wajcman, 1999). This study uses theoretical tools drawn from social constructionism to drive a wedge between the technical and social understanding of DMB. This relationship, between technology and society, between technical thing and the discourse that surrounds it, is an essential insight into the way technologies like DMB has been designed, deployed, and discussed. By using the socio-technical perspective, this study makes a contribution to theoretical advancement. Although a socio-technical perspective has been primarily used in designing organizational systems considering social and technical factors (Orlikowski, 2002; Markus and Robey, 1988; Sawyer, 2001), it has been rarely used in emerging technologies at macro levels considering various relations (industry, regulation, and society). By applying a socio-technical perspective to DMB, this study forecasts DMB prospectus and limitations in reference to the expected features of the next generation networks. The socio-technical perspective will provide an insightful implication of how to better adopt and manage the innovation of DMB.

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This paper is organized as follows: first, it introduces DMB by surveying its current development. Section 2 reviews a socio-technical approach. Section 3 surveys the current challenges and promises of DMB in Korea. Section 5 discusses open access in reference to next generation network environments. Conclusion section summarizes the DMBÕs strategic option in regulation, industry, and service. 2. Definition and current trends of DMB The DMB system has been designed to complement mobile networks with broadcast and multicast capabilities for spectrum-efficient delivery of multimedia services on mobile devices in both outdoor and indoor environments, without introducing constraints on the user terminal or the consumer itself (Kueh et al., 2004). Key technology includes a multicast, a single broadcast can send programming to thousands of receivers which can play back the content individualized to the location. This is one of the competitive advantages of multimedia broadcasting over traditional video broadcasting or terrestrial multimedia broadcasting (T-DMB). A subsidiary of EuropeÕs Digital Audio Broadcasting (DAB), DMB offers high-quality music, data services, and various video outputs, as well as superior mobile receiving capabilities. Both T-DMB and S-DMB are roughly equal in terms of their mobile reception of multimedia broadcasts. The difference between them is that T-DMB works on networks built only through terrestrial broadcast stations, while S-DMB utilizes networks built with satellites and Gap Fillers, which provide in-building coverage (TU Media Report, 2005). DMBÕs mobility, bi-directional capability and its convergence of broadcasting and communication services separates the service from existing multimedia formats. In fact, DMBÕs mobility is guaranteed and reception is excellent even while moving at high speeds, driving at 60 miles per hour. Because end users have control over when and where they view their desired programming, DMB is characterized as a personalized service. The development of a handset-compatible DMB terminal and the use of the CDMA network as a return channel will drive demand for this service, which costs considerably less to deliver than it does to deliver VOD over 3G networks. The number of subscribers to DMB reached 20,000, less than half a month after the worldÕs first commercial mobile broadcasting via cell phone started in May 2005. TU media, a unit of KoreaÕs foremost mobile operator SK Telecom, now runs seven satellite DMB video channels, news, sports, soap operas, games, movies, and the firmÕs own station, plus 20 audio channels. The company aims to make take-out TV more attractive by increasing the number of video channels to 14 by adding popular over-the-air programs to its line-up. 3. Current research on emerging technologies As the emergence of DMB creates many changes, DMB is seen as an emerging technology creating a destructive power and introducing next generation networks. Schumpeter (1942) coined the term ‘‘creative destruction’’ together with ‘‘disruptive technologies’’. These terms are often used in characterizing new digital economy. After Schumpeter, many researchers follow up investigating the impact of emerging or new technologies on economy and society. Most of those researchers focus on the disruptive nature of emerging technologies and investigate the relations between emerging technologies and

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legacy ones. In fact, developing a model to predict the adoption of innovation is not easy because there are so many complicatedly related variables. Typically, communication researchers use the diffusion model in their investigations of the adoption of new technologies. For example, Lin (2002) proposes an integrated model for the investigation of media technology adoption. LinÕs model includes six components: system, technology, social, audience, use, and adoption factors. The weakness of LinÕs model is that the components are themselves interwoven, make the model hard to apply to complex technological phenomena. For example, the difference between system and technology is not clear; so is the difference between audience and use. A more integrated perspective is used by several researchers investigating the interaction between emerging technologies and regulation. Cherry and Bauer (2004) use Complex System Theory to gain a better understanding of the requirements for sustainable telecommunications policies. They view the telecommunications sector as co-evolving and complex adaptive systems. They argue that regulatory policy should be flexible enough to adapt to complex adaptive systems. Their argument is worthwhile to note in convergent services. Complex System Theory implies the direction of DMB, the market situation of DMB, and policy. Although Cherry and Bauer make an excellent observation and recommendation, they neglect to see the service and industry side of optimization. The discussion of complex system theory by Cherry and Bauer is limited in the policy formulation process. BauerÕs other research (2004) shows a valuable framework. Similar to the Complex System Theory, Bauer (2004) uses valuable framework in predicting the future mobile environment. His proposition is that technology, industry, market, and policy are a coevolving ensemble. Similarly, Han (2003) develops the technology, policy, and culture model for the analysis of the adoption process of broadband technologies in Korea. Han concludes that the KoreanÕs rapid diffusion of the broadband access is the result of combining the governmentÕs culturally sensitive ICT policy that promotes both the supply and the demand of the broadband with the unique cultural traits. However, HanÕs model of technology, policy, and culture is not much different from the socio-technical system theory. HanÕs model rather sees three factors in a discrete way neglecting the interaction among the three factors. Another such example of discrete factors is that Shim (2005) surveys the factors influencing KoreaÕs DMB development. The factors include consumer behavior, a hurry-up culture, education focus, pervasive infrastructure, aggressive IT planning, free incoming calls, subsidies, convenience, and population density. The factors seem to be simply an array of socio-cultural factors lacking theoretical frameworks. Bijker (1995), MacKenzie and Wajcman (1999), and Pinch and Bijker (1987) are sociotechnical researchers who successfully illustrate the social construction of technologies. There are other relevant studies under the broad thought of social constructionism such as actor-network theory, structuration theory, social shaping of technology, and institutional approach. One common factor out of the social constructivism is that these approaches are integrated perspective focusing at the interaction among the factors themselves. The socio-technical approach would be a good lens for the emerging dynamics of DMB. Since DMB is a new technology, there is not much scholarly literature on its development, uses, and policies using theoretical frameworks, although there are many reports on DMB from consulting firms.

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4. Socio-technical approach to DMB Sawyer et al. (2003) contend that a socio-technical perspective is a good framework for investigating the complex interrelationships of technical and social processes as the framework takes serious consideration of technological and social details of IT. A socio-technical system approach has been widely used in designing work systems and posits that it is comprised of a technical system and a social system. These subsystems are seen as interdependent and should therefore be jointly designed in such a way that the overall system is optimal (de Sitter et al., 1997). Socio-technical theory has made a number of contributions to our understanding of interaction of the social and technical artifact. In particular, socio-technical system theory has been employed as a successful method of organizational redesign (Pasmore et al., 1982). The objective of socio-technical system theory is to develop an optimal organizational design that enables the three STS components of the organizational system to work well together. These components are the social subsystem, technical subsystem, and the environment (Pasmore, 1988). With these components, socio-technical perspective largely has been used to investigate the integration of technology, processes, people and organizational structure. Since Bijker (1995)Õs landmark work on theorizing social construction of technologies, a socio-technical system approach rarely has been used in understanding emerging technologies at macro levels such as impacts of emerging technology on society as a whole. Bijker uses bicycles as his case for describing social construction process of bicycles in retrospective ways. Bicycles are a single artifact and are less complicated and relatively well-defined than ICT. Bijker never applies his theory to ICT, and other social constructivist researchers rarely do. In addition, because Bijker traced the social construction process of bicycles which were already developed artifacts. BijkerÕs approach has limitation in applying to emerging technologies. As one of few researchers, Sawyer et al. (2003) investigate emerging broadband and mobile opportunities with the socio-technical perspective. By emphasizing the complex relations between social and technical aspects of a technology, SawyerÕs study shows how a socio-technical approach can be used in predicting emerging technologies to provide useful insight into the emerging technologies. Socio-technical system theory with DMB enables this study to investigate technical subsystem (infrastructure, equipment, application, and service), social subsystem (market, customers, and industry), and the environment (regulation, policy, and society). With the three entities, this study focuses on relations among the three entities in order to capture the dynamics of technological change and in order to link the social interaction and technological choices. In the end, by looking at DMB as a socio-technical ensemble, this paper seeks a firm understanding of the interaction among DMB technology, its market, industry, and regulation regarding DMB. 5. DMB as a socio-technical artifact This paper is intended to contribute to the study of new technology as a socio-technical artifact, and to the ongoing political and legal debates surrounding its continued move towards ever-increasing ubiquity in culture, politics, commerce, and society. With sociotechnical approach, this study investigates DMB technical subsystem, social subsystem, and the environment. Each factor is explained in reference to other factors, i.e., technical system is explained considering social system and vice versa. In doing so, this study avoids

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typical fallacies: approaching technology as technology itself and technology as a blackbox. From next section, DMB is described in each subsystem in the order of technology, market, industry, and policy. Then, the relation among the each subsystem is explained from a socio-technical ensemble perspective. 6. Technology issues In order to understand the link between technological and social issues, an understanding of the technological change process is essential (Sawyer et al., 2003). One of the questions that arise of DMB is whether it creates a new technology environment, namely, a next generation network environment. European Commission research report (2003) characterizes convergence at the technology level with four essential criteria to describe an idealized infrastructure for next generation networks. At the technology level, there are four concepts: (1) open systems; (2) layered architectures; (3) digital signal processing; and, (4) platform independence (i.e., true connectivity and interoperability). ‘‘Open systems’’, or those with publicly defined protocols, offer scale and scope advantages to the marketplace. Closed or proprietary systems, while securing private advantage, may unnecessarily limit the market. The enabling technology of convergence is a layered architecture which supports connectivity and interoperability. This is the electronic and logical glue which binds the various parts and pieces of the information infrastructure. The philosophy of layered architecture models is that implementation of each layer can occur relatively independent of the other layers. In other words, developers need not worry about the whole vertical stack of layers but can focus resources on just the subset of layers most interesting to their product or service. As a matter of technology, this opens up many new possibilities. Until recently, policy constrained the marketplace from developing much of the promise technology offers. For example, while DMB systems could connect to and interoperate with wireless infrastructure to provide broadcasting content transport, this has not been fully permitted by law in Korea, at least up until recently. 7. Infrastructure The DMBÕs infrastructure has to enable S-DMB to transmit information of voice, image, and data from the base station to the satellite. After the transmission, the information signal is transferred to the frequency of L-band (1–2 GHz) or S-band (2–4 GHz), and sent to the mobile handsets. It is differentiated from land-line DMB service which uses satellite as the medium. Infrastructure has been implemented to support the DMBÕs mobility. SKT and JapanÕs MBCO1 jointly launched the worldÕs first satellite for DMB from Kennedy Space Center in Florida in March 2004. Korea and Japan showed their will to take a leadership role in the DMB. For the bandwidth and frequency, SK Telecom has applied to the ITU for satellite orbit registration. Korea Telecom also applied to the ITU for the registration to prepare for its future satellite DMB demands. ITU-R distributed 2535–2655 MHz of 120 MHz in the areas of Korea, Japan, and China for broadcasting and moving satellite. According to ITU Resolution 528, upper spectrum of 25 MHz (2630–2655 MHz) was set for S-DMB bandwidth. 1

Tokyo-based Mobile broadcasting is majority owned by Toshiba Corp of Japan.

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Up to now, it is not sure whether this infrastructure would be open or available to use by third parties and competitors. However, it is more likely that the infrastructure would not be a full open system for the time being, because the consortium of the infrastructure is a competition-based participation and because the consortium is building infrastructure in more proprietary ways than open standards. 7.1. Equipment The S-DMBÕs equipment supports the ubiquitous coverage and mobility. Such equipment includes Gap Fillers, downlink carriers, and satellite signals retransmitters. The Gap Fillers are umbrella cells with typical diameter of 700 up to 1000 km. The Fillers give the advantage to integrate a larger scattered audience and significantly reduce the retail service fee. The system infrastructure will typically aim at an average availability greater than 95% over the umbrella cell to address the 3G handset mass market. This requires that indoor satellite coverage must be ensured. It is anticipated that 8000 or more S-DMB Gap Fillers ultimately will be installed at a cost of approximately $340 million (US$). With these Gap Fillers, S-DMB is able to cover the entire Korean peninsula, while T-DMB can cover the size of the Seoul metropolitan area. The S-DMB layer provides a WCDMA downlink carrier per umbrella cell able to offer a useful capacity of minimum 768 kbit/s per umbrella cell. Even 144 kbit/s capacity allows for the distribution of more than 450 Mbytes of data per day taking into account a carousel factor of 3. This accounts for 10 h of 100 kbit/s video content which is sufficient to achieve a good video quality for the screen size of handsets. 7.2. Service The key service of the S-DMB system is to provide anytime and anywhere service consumption to the end-users. Local storage combined with push service technology optimizes the bandwidth usage over the whole day duration and maximizes the satellite broadcast content delivery capacity: local storage can be filled at any time of day and regularly updated with predictive cache management techniques providing mobile operators with an increased content delivery capacity. In each handset, only those contents with a potential interest for the user are processed at the physical level and stored to be available upon the userÕs request. Streaming services are delivered using the 3GPP MBMS streaming by preempting the capacity allocated to push and store services. Currently, Korean cellular companies began offering VOD using their CDMA 2000 1x networks. The difficulty with using existing networks and technology to deliver mobile VOD, however, is that they do not scale. As more users sign up, service quality depreciates and service prices rise. The introduction of EVDV and Wideband CDMA (W-CDMA) promise to improve the situation, but neither of which will completely eradicate these troublesome issues. 7.3. Competing standard From a socio-technical perspective, a standard setting is a crucial technological change mechanism (Sawyer et al., 2003). The Korean DMB is not the only mobile

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broadcasting technology in the world. EuropeÕs ‘‘DVB-H’’ and the US QualcommÕs ‘‘FLO’’ are fiercely competing for acceptance as an international standard. The motivation of the providers is to set their own technology as the internationally accepted standard. IT industries have witnessed the First Mover Advantages in the IT field, and industries want to maximize the benefits of network externality. The Korean government and industry are striving to make DMB technology de-facto standard. The chances are high that Korean DMB will be the winner of the standard war due to its acceptance as the European standard. The 13th technical committee of the World Digital Audio Broadcasting Forum, an international non-governmental organization that implements digital broadcasting services, decided on the Korean DMB as a European standard in December, 2004. 7.4. DMB as killer applications The long-awaited killer application by telecom carriers and the emergence of DMB is a perfect match. Telecom carriers regard DMB as killer applications and aggressively develop it. Thus, technical feasibility of DMB has been prepared well to support multimedia multicasting: transmitting information of voice, image, and data from the base station to the satellite is more than feasible. However, the socio-technical perspective (socio-technical ensemble) argues that killer applications cannot be explained purely on the basis of inherent technological feasibility. Other issues such as the change and continuity of DMB offer useful questions: Will DMB be entirely new? Or will DMB creatively combine elements of existing technologies? These questions relate to whether DMB is opening a next generation network environment. The technology development of DMB meets some of the features of the next generation networks, such as layered architectures and digital signal processing. DMB development shows layered architecture (i.e., mobile infrastructure, equipment, service, and standards). Also, DMB is designed to utilize highly digital signal processing technologies. However, the fundamental question in the DMB is whether DMB development shows a sign of horizontal industry structure and open market environment? It is questionable, however, whether DMB evolved toward open systems and platform independence. DMB has been developed within a walled garden: license-based and consortium-based. Not all industry can provide DMB, which poses a high entry barrier to market. In addition, the DMB consortium has been formed comprising content, transport, and processing providers. Yet the consortium itself appears to show vertically integrated structure against other consortia or trusts. As to platform independence, infrastructure has been built in a proprietary and limited way and not in a neutral way (i.e., networks provide any application or services). DMB is specifically being designed to provide ‘‘mobile TV’’ and whether the DMB terminals can provide other mobile services (mobile commerce) is not so optimistic. These limitations relate to industry conflicts between and among telecom and broadcasting industries. 8. Dynamics of industry players On the industrial supply side, DMB has three products and service groups—content, transport, and processing. The essence of convergence in next generation networks is that

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the marketplace can supply products and services in any of the groups independent of the other two. In other words, content developers only worry about content, not how it will be stored, processed, transported, compressed, retrieved, or linked and embedded. Those in the transport business should have to worry only about transmitting bits and should not have to be concerned with the underlying logic, applications functionality or data types which are encoded in any bit stream. And finally, processing (compression, error detection/correction, etc.) should be possible regardless of the transport mode or data type. While this generalized description of a convergence marketplace is techno-centric, it has enormous implications for the structure and conduct of previously distinct industry segments. The convergence era market will be structured in a horizontally layered structure: the separation of infrastructure and services will be accelerated with the advancement of middleware technologies. Industry will be more and more arraigned with a layered structure and less and less will rely on infrastructure. Third parties can more easily provide applications and develop innovative services. For example, companies primarily involved in the transport business see that their product bandwidth will fall prey to commodity pricing as the implications of connectivity and interoperability are easy to do. In other words, if a content provider can move from one platform to another platform, why should not this content provider simply go with the cheapest price for hauling bits from one platform to the other one? On the other hand, content and processing products and services are likely to be priced on value-added concepts. Related to content, the fundamental question in the DMB has been the retransmission of over-the-air content over the DMB. Three national broadcasters have opposed to share their content with the DMB providers worrying that they might lose their control on content. Content providers in DMB include three broadcasting carriers and a group of application and content providers. The key issue in the content layer is a retransmission of broadcasting content over DMB. The three broadcasting carriers intend to maximize their power leveraging the content retransmission issue. Their argument of opposing their content to be used in DMB is that broadcasting content cannot be commercialized in the name of public interests. However, the real motivation is that they do not want to lose their position in the market where they had been protected under public broadcasting systems. On the other hand, the DMB providers (telecom industry) have been aggressively looking for a way to retransmit over the air broadcasting content. Mobile telecom industries have been suffering from freezing revenue in the saturated wireless market. Mobile industries now turn their strategic attention to a new cash cow, DMB. The thorny issue around content retransmission reveals the implication of layer approach in DMB. The broadcasting carriers still have a vertical model of communication, that is, broadcasting infrastructure offers broadcasting content whereas telecom infrastructure is provisioned to provide telecom content, and Internet infrastructure offers Internet content. 9. Market and users The current DMB market in Korea is questionable mainly because its developmental momentum came from an industry eager to come up with new services. The needs did not come from the market or user side. Most prospective needs in Korea have been based on the technical feasibility. Such projected needs are published by industry and

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Table 1 Prospective DMB impact (Source: ETRI) and expected DMB subscribers (Source: TU Media Research Report) 2005

2006

2007

2008

2009

2010

Prospective DMB impact Economics growth (m) Employment increase (%)

5924 6.8

11 995 13.7

20 496 23.1

20 496 31.1

27 886 40.9

43 660 48.0

Expected DMB subscribers Terrestrial-DMB (m) Satellite-DMB (m)

60 66

156 139

299 266

481 433

677 575

851 659

government agencies that have a strong self-prophesy on the high penetration of DMB. According to the forecasts from KT, SKT and TTA, S-DMB service will attract 420,000 subscribers this year and reach 6.13 million by 2010. Revenues of Satellite DMB service would be $43 million in 2004 and $813 million by 2010. One of the factors that contribute to the bleak outlook of the S-DMB is the T-DMB as a substituting technology. Compared to S-DMB, T-DMB service will have a lower fee. TDMB service may have a high subscription rate, surpassing S-DMB. Revenues for TDMB services could hit $8 million in 2005 and reach $90 million by 2010. However, even though T-DMB will have more subscribers, its revenues would be smaller S-DMB revenues, due to T-DMBÕs limited profit-making model. According to the ETRI report, TDMB services could begin with 600,000 subscribers in 2005 and reach 8.51 million by 2010. These figures indicate that the number of T-DMB subscribers would be smaller in the initial stages than the number of S-DMB subscribers. However, the forecast goes on to show that by 2010, T-DMB would have 30% more subscribers than S-DMB services. The ETRI estimates the effect of DMB on the national economy to reach 14.7 trillion won by 2010 (see Table 1). In short, compared to T-DMB, S-DMBÕs competitive advantage of national coverage does not offset high subscription fees. Invalidated user needs also add uncertainty to the market. According to Ducey (1996), consumers in the convergence marketplace tend to be looking for value in at least three major demand areas: choice, convenience, and control. DuceyÕs past observation is true to DMB. According to the most recent user survey by ETRI, mobility and interactivity are the two most desired motives using DMB. Several market surveys have identified that mobile usersÕ main interest lies in multimedia content related to handset personalization, news, sports and music. Mobile multimedia services will deliver short format content, since customers typically use their mobile in short intervals. The real practical question is, despite the user survey, how far can users go or what extent do users want mobility and interactivity? Do users want to see broadcasting content over the small screen compared to the TV screen? DMB is still facing the above challenges. 10. Regulatory challenges surrounding DMB in Korea The DMB in Korea has faced regulatory setbacks in its early development. Because of the absence of a clear concept of convergence in relevant policy and regulation and the convergence service, DMB in Korea has faced overlapping regulation in one case and non-regulation in other cases. The Korean broadcasting regulators play an important role

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for the regulation of the DMB such as license, spectrum, content, and other behavioral regulations. Contrary to the trend toward the convergence of telecommunications and broadcasting, the regulators firmly maintain the regulation of the cross-ownership of the telecommunications service providers and broadcast carriers for the sake of public interest. As a result, telecommunications service providers, as well as large business conglomerates, are prohibited from the entrance to the broadcasting market. The current regulatory framework for Korean broadcasting and telecommunications services markets is categorized along with transmission media and divided into basic telecommunications, value-added telecommunications and special telecommunications services categories and terrestrial, cable, satellite broadcasting services in broadcasting services sectors respectively. Yet, such vertical division of service markets is no longer appropriate to properly regulate the converging market and services and has the risk of over-regulation against service providers. In January 2005, the Korean government announced a new Broadcasting Law, containing the definition of DMB, which laid the foundation for the implementation of T-DMB and S-DMB. Since then, the Ministry of Information and Communication (MIC) and the Korea Broadcasting Commission (KBC) have each been attempting to take the initiative on DMB, which has created a challenging political environment. Amongst such confusion, the current classification of satellite DMB service has not been decided yet. S-DMB is so far regarded as neither telecommunications nor broadcasting. Under the scheme, S-DMB service requires both of the amendments of current laws and establishment of new laws to appropriate laws, because it has difficulties regarding the number of channels that can fit on the whole telecom spectrum due to frequency limitations. The current Broadcasting Law has provisioned maximum share limitations in S-DMB and has limited participation in terrestrial DMB service in order to keep the telecommunication operators from the broadcasting industry. Along with such regulatory provisions, the current regulatory structure in Korea seems to limit the wide possibility of convergences. The regulatory principles of broadcasting are stricter than those of telecommunication, and telecommunications and the IT industry have regulatory traditions different from those of broadcasting. If convergence services are regulated by the broadcasting regulatory framework, the convergence market will face strict entrance barriers and content regulation. Until recently, the government role represented by the KBC has been limited to preserving the public interest through universal service, preserving the diversity of communicators, and regulating public news reporting (Kim, 2003). The undermining question is about ontological and semantic distinction: Does DMB belong to the telecommunication industry or is it a functional extension of broadcasting? The current practice of the KBC is to define DMB as an extension of traditional broadcasting, based on the emerging mediumÕs functionality. This places it within the framework of traditional broadcasting and, according to this framework, the KBC requires DMB carriers to observe key broadcasting principles and public interests such as universal service. It is necessary to consider ‘‘diversity issues’’ in broadcasting services, which inherently observe principles of free speech. Along with the KBC, the incumbent broadcast carriers stand in firm opposition to retransmit their content over DMB in the name of broadcasting facilities as public resources (bottleneck) and given the magnitude of its impact on the public. The current battle between the broadcasting and telecommunications sector will be continued, and this battle will significantly undermine the development of convergence services.

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11. Driving forces of the DMB development: disjoint among the socio-technical system components The socio-technical perspective shows different aspects of DMB and their dynamic interactions—technology, service, market, regulation, and users. The overall development of DMB shows that its technologies are relatively well developed, whereas other aspects of markets, users, and regulations are not developed as much as technologies. This implies that DMB has been developed in a tendency towards technology-push to market rather than market-pull. It seems that the demand from market and users are not strong enough to pull the new emerging technology of DMB. One example of the technology push model is that the Korean government (Ministry of Information and Communication) set aside funding of $100 million for the development of next generation digital broadcast technology (named the SmaTV project) that includes interactive technology, non-linear editing technology, and T-commerce technologies. Such funding will be expensed from the subsidy of the DMB phone. For human resources development, MIC is setting up ‘‘Digital Broadcast Research Centers’’ in universities to educate and produce experts in the field. The Korean government has high hopes that investment in the DMB will give further impetus to the countryÕs economic growth. The government predicts that multimedia broadcasts will create 160,000 jobs over the next 10 years, with $13 billion in product sales and added services (Table 1). This developmental process leaves much to consider in terms of the socio-technical perspective. The market and user side especially have been neglected in the development of DMB (Fig. 1). The main reason for DMB development by telecom companies has been the new revenue source for the telecom companies. Thus, the needs of the prospective market and users tend to be predicted in a too positive way. It is unclear whether DMB will create employment or impact economic development as many agencies predict. In fact, there seems to more barriers than positive factors. Another relation in the socio-technical framework can be one between regulation and industry. Current regulation on DMB has not been established yet. Instead a solid framework, provisional case by case approach is used. Regulation does not reflect the turbulent

Policy

-Policy making process does not reflect diverse stakeholders -Dissent views among market players

Absence of consistent policy

DMB

Technology

Tends towards more technology-push less on market-pull

Market

Fig. 1. Disjoint of DMB in socio-technical framework.

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change of technology and industry interactions. This might cause a waste of resources and over-regulation to technology. Divergent views among different layers of players also deter the development of DMB. As agreed upon among different players, contents will be the key factor in the success of DMB. Content from major broadcasting companies (drama) will be retransmitted to DMB. Telecom carriers attempt to cast such content subscription-based (pay per view), whereas content providers, major broadcasting companies, are strongly opposed to the subscription-based provision by telecom carriers. The broadcasting companies argue that broadcasting content should not be commercialized in the name of public interests. Telecom carriers counter-argue that subscription-based content is the only way to operate DMB in a sustainable business model. The view of broadcasting companies remains in the vertical silo perspective. This discrepant view implies the significant disjunction in the socio-technical perspective. The most troubling issue is retransmission of over-the-air broadcasting programs over S-DMB. KBC has been unable to issue a business license needed for the satellite DMB in the face of strong protest from some of its member broadcasters. The protestersÕ argument is that retransmission would tarnish the public interest of broadcasting. The nationÕs main broadcasters refuse to air their programs through the DMB services. The positions of the three major terrestrial broadcasting carriers are different. KBS is betting everything on the terrestrial DMB, whereas MBS has the position of 5 (satellite DMB), 5 (terrestrial DMB) and SBS 7:3. Except for KBS, initially, these broadcasting stations planned to bring the satellite DMB and terrestrial DMB together, but now they take it as an established fact that it is difficult to do that. They estimated that the competitiveness of the satellite DMB contents would drop if the Ôretransmission of terrestrial TV programs via the SDMB service is permitted. The retransmission issue is a problem that should be settled through negotiations among the providers. In all, the development of DMB implies that now it needs more socio-technical arrangement rather than technical change. The development of DMB has been internally driven change (more or less technology-driven) but from now it will likely be driven by external factors (market, user, and regulation). Up to now, DMB has been driven by more system implementation and less driven by user and market need. Driven by system implementation like system reliability and technical feasibility, the DMB development has been relatively fast. However, it does not look at socio issues such as usability and technology maturity. Those tasks will take more time than the technical issues. The DMB development has been technologically driven; DMB has not been seen as a socio-technical artifact. The acceptance and the deployment of a new developed standard is mainly dependent on whether there is, at least, a satisfactory business case for it. A business case is successful if it can offer new useful services to society and/or it will respond to a specific need. If the DMB is driven by a few leading companies, there can be another failure of DMB, just like their previous failure of IMT-2000, ISDN, and the dot.com bubble. Even if DMB is technologically feasible as the industries maintain, that does not mean DMB is successful for the market and users. Technology-driven perspectives always leave problems to be solved. Such problems will not surface until the technologies are used in real markets and by real users. In this sense, Korea can learn lessons from their own experience on broadband diffusion. As Han (2003) indicates, the KoreanÕs rapid diffusion of the broadband access is the result of combining the governmentÕs culturally sensitive broadband policy with the unique cultural traits. Such an approach has promoted both the supply and

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the demand of the broadband, which Han (2003) terms as ‘‘fertilized soil’’. In the case of DMB, this fertilized soil has not been arranged yet. Considering the disjoint identified here and conflicts among the players, this study predicts that DMB will not likely be adopted in the market as early as 2010. The time we can call DMB a socio-technical artifact will not come as easily as Korean industry hopes. 12. DMB and next generation network environment Related to the socio-technical issue, another question that this study raised was the implication of NGNs. The development of DMB implies that it is pointing in the direction of NGNs but it is not ready yet to evolve in a full-fledged potential towards NGNs (Table 2). The European Commission research team (2003) summarized the features of NGNs. The first feature of NGNs is that services are defined independently from the underlying technology. That is, separation between the transport layer and the service layer become accelerated. DMB shows that the services largely depend on the underlying technology, for example, the proposed middleware services of personal identification, authentification, and authorization have to be differently arranged according to the infrastructure. Underlying infrastructure like satellite is provided by TU Media exclusively, and there is a possibility for TU to exert its monopolistic power even if the DMB satellite will be shared as a bottleneck resource. The second feature of the NGN is the integrated core network. So far, the DMB networks (underlying technologies) are not consolidated; terrestrial DMB is provided by terrestrial DMB infrastructure and S-DMB is provided by the S-DMB infrastructure. Ideally, the infrastructure of NGN should be consolidated integrating telecommunications, broadcasting, and Internet. Upon the core integrated network, multiple services can be provided. The core integrated network will be neutral which renders that the infrastructure supports any services from any providers indiscriminately. If this neutral network is realized, it is possible that mobile virtual network operators (MVNO) will provide the DMB services. The MVNO providers will attract mobile network operators (SKT, KT) who want to build their brand and footprint in the market. The MVNO model will also be interesting to content providers who would acquire a direct channel to the consumers. Table 2 Next generation of networks and DMB Next generation network

Digital multimedia broadcasting

Separation between transport layer and the service layer

Services depend on the underlying satellite technology

Moving to a multi-service core network

Separate and heterogeneous networks

Open and standardized interfaces between each layer

Third parties cannot develop services independent of the network

Standardization Distribution of network intelligence

Different standard competing Intelligence and functionality unevenly lie in network infrastructure and user equipment Intelligence does not exist in various layers and different operators

Openness to third-party services

Consortium dominates services

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All the network issues and billing can be outsourced, giving the brand ownership of the device most consumers see as invaluable. And as the mobile phone becomes the gateway to content and service, the brand has huge visibility–for little or no cost. Virgin Mobile in US and UK shows the profit potential. This model can be promising to small content providers (small size productions and independent films) because they can develop their own channels that actually drive revenues, as well as build the brands. The third feature of the NGN is the open and standardized interfaces between each layer in order to allow third parties to develop and create services independent of the network. The DMB service will be provided by a consortium which is composed of each layer provider (network, equipment, and content). Interfaces between each layer within single consortium may be standardized. Yet the interfaces between different consortia remain questionable. Different standards, different mobile operators, and different control may hinder interfaces between different services from different consortium. The absence of standard and standardized interface discourages third parties from developing and creating services independent of the network. The essential role of standardization, the openness of networks and services, require the use of standardized and interoperable solutions and interfaces. One of the main motives for TU Media to develop DMB was the First Mover Advantage, that is, to preoccupy technology standard and achieve the position of Significant Market Player. Their strategic assumption is that early investment offers operators the opportunity to position themselves strategically and gain a market advantage for the future. Under the assumption that DMB is evolving towards a next generation network, the TU MediaÕs plan will be less likely to happen in the near future. Because DMB development will speed up network openness and content and services development, standards will not present barriers for the development as in the case of the Internet. The fourth feature of the NGN is that network intelligence becomes redistributed from infrastructure to services. In traditional networks, intelligence resides in infrastructure where it controls services and provides standards, types, and policies of the services. Terminals of services were simply dummy terminals. As more and more diverse services are introduced, the service provisions need to be controlled by end-users. In next generation network architectures, such as third Generation Mobile Systems, it is frequently stated that services will no longer be standardized but its service capabilities will be available as tool kits that will be standardized. This is a revolutionary step towards openness in telecommunication system architectures, segregating market segments from each other. But there is a danger here: the lack of business case for 3G networks and services. Although there are other aspects of openness such as architectural and engineering (see Khorasani and Sacks, 2003), the present paper only highlights the industrial and regulatory aspects of openness. The other areas of openness can be discussed in future research. In all, the NGN environment is characterized as a layered structure. Competitions occur in each layer. Each layer is a platform. Competition can happen in layers such as content, application, service, and infrastructure. Policy roles are to ensure competitions in each layer and ensure the interaction and interface among the layers. 13. Potential future research issues This paper raises a number of future research issues regarding emerging technologies and next generation networks.

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In terms of policy, a series of legislative changes should be introduced to define the convergent services more clearly. Such changes are related to a layer policy model (Cerf, 2004), which has many attractions and can be fit to regulation of convergence. Both the telecommunications and broadcasting industries used to consist of a collection of separate and vertically integrated sectors providing different services. In the future converged network, a growing variety of services will be provided on top of the basic connection. If regulation is to be applied in the future, it should work along the lines of natural technological and economic trends, and not at regulatory purposes to them. A layered model will increase competition. Service and application providers can come to the market without having much to do with infrastructure provisions. However, the challenges of imposing a layer model should not be underestimated. As Odlyzko (2003) suggests, several problems may arise with layered model-technical, economic pricing issues. The layered modelÕs goal of open access (or equal access) becomes more and more difficult when more and more various users are involved. Technical complexities will make it more difficult for the layer model to land. Along with technical issues, Odlyzko (2003) suggests price discrimination. Differential pricing, in which customers pay varying prices for what may essentially be the same goods or services, are at the heart of regulation. A layer model would create strong economic incentives for price discrimination, and against charging per byte or per packet. Future research will address the pricing model. In addition, this study encourages researchers to investigate the developmental trajectory of DMB, focusing on its linkage between the social and technological issues; how social and technological factors are interacted, how certain technologies are chosen with what social forces, or vice versa, and what consequences are driven out of the interaction of the two. For all of the future research, Korea provides a good resource. Korea can be the best test-bed for ICT projects and future case studies on diffusion and adoption of emerging technologies. As we see, Korea has the well-established infrastructure and has a dynamics surrounding ICT development; rapid diffusion and high service penetration rate. It is worthwhile for researchers to see Korea as the best test-bed and real case study. Korea is moving towards an even more advanced next generation mobile service. Broadband penetration, 3G wireless leadership, and DMB are the future trends in other countries. Indeed, Korea provides big opportunities for ICT researchers to investigate: What are the driving forces making Korea one of the best ICT countries in the world? What socio-cultural factors, along with policy factors, have contributed most to the development of ICT? What socio-cultural factors are and are not applicable to other countries? Lastly, as a theoretical advancement of socio-technical system theory, only a little research has investigated interaction among the components of the theory. Much research using the socio-technical system theory investigates its components in a discrete way and thus somewhat have neglected the integrated perspective looking at the interactions by components themselves. Future research will be clearer about interaction of the social and the technological factors. For a better understanding of the clear interaction, future research is worthwhile to investigate technological change. Typical social science research using socio-technical approach tends to see the technological change as black-box. Instead, future research can explain technological change, that is, how technological change occurs and how a new technology is evolved. With these suggestions, future research will extend the integrated perspective of socio-technical system perspective looking at other emerging technologies.

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14. Conclusion This study, drawn from extensive industry research and interviews with DMB insiders and regulators, provided the background on the development of DMB, including technology innovation, standards development, operatorsÕ strategies, consumer demand factors, and regulatory influences. It assessed the technical feasibility, profiled market and user, and surveyed the DMB regulatory environment including profiles of key regulatory agencies and summarization of current issues. It briefly profiled key industry players including service providers, industry consortia, content providers and handset vendors. Finally, and most importantly, it summarized the interaction of these factors in order to see the dynamics of DMB development. Socio-technical analysis implies that the emergence of DMB will likely continue to be a socially and technologically complex development. Socially, DMB will involve many organizations, structures, and legal entities, industries, and user groups. Technologically, DMB will accelerate cognate technologies of infrastructure, applications, and services evolving toward a next generation network environment. Socio-technically (socio-technical ensemble), the advancement of DMB technologies will debilitate current regulatory structure, destruct current markets and gradually introduce a new structure of market, industry, and regulation, that is, a layered model of next generation network. Socio-technical analysis also shows that DMB as a self-fulfilling prophesy has been aspired by the Korean government and industry alike. High attention has been paid to DMB because of its possible impact on the current technology environment and potential catalytic power to the next generation networks. Unlike the over-hyped forecasts, however, the reality and prospectus are not optimistic enough to expect full success of DMB. The absence of strategic integration among policy, technology, and industry, the prospectus of DMB somewhat over-evaluated with hype and thus the other perspectives of potential disruptive and uncertainty are largely sidelined. Many hyped expectations and optimistic projections—such as when to succeed, what impact, and how much economic development— are all depend on the dynamics of the socio-technical system components. One thing is clear if we can see DMB as a socio-technical artifact, or if we can see DMB within the domain of the co-evolving environments of technology, market, regulation and industry, we can predict a more precise DMB trajectory as a product of complex evolving system. Acknowledgements This research is funded in part by the Pennsylvania State University Research and Development Grant under Grant No. PSU 0308065. The author thanks Ministry of Information and Communication and ETRI of Korea for providing valuable data. References Asia-Pacific Telecommunity, 8th APT Standardization Program (ASTAP) Forum August 4–6, 2004, Hyderabad, India, Expert Group Progress Report to ASTAP-8. Bauer, J., 2004. Harnessing the swarm. Communications & Strategies 54 (2nd quarter), 19. Bijker, W.E., 1995. Of Bicycles, Bakelites and Bulbs. Towards a Theory of Sociotechnical Change. The MIT Press, Cambridge, MA. Cerf, V., 2004. A Layered Network Model. MCI Policy Recommendation.

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