Federal Government Digital Set Top Box Scheme – The real story

Reading the Daily Telegraph’s story on the Federal Government’s Houshold Assistance Scheme (HAS) for Digital TV you’d be excused for immediately thinking we were in for another Pink Batt Insulation scheme.  In fact, I thought the same thing myself when the scheme expansion was first rumoured.

This week, I read an excellent peice by Campbell Simpson at Good Gear Guide which took a bit more time to explain the in’s and out’s of the Scheme.

But, I was left still concerned and wondering.  And throughout the week I’ve seen and read so much, I wanted to take a bit more time to consider the issues around this scheme.

Most importantly, to get the detail on the issue, I spoke this week with the Minister for Broadband, Communications and the Digital Economy Stephen Conroy – We’ll play that interview during my show on 2UE tomorrow (Saturday May 14) at 3pm.

What is behind this ‘up to $350 cost per household’ – Well as so well explained by Campbell Simpson, that fee can include the upgrade of the Antenna, so not just the box and the install.

But is $350 too much?  Yes.  My opinion – it should be $250 – $50 for a box, and $200 average for installation.  Remember, we’re getting installation, tuning, demonstration and ongoing support for the installation, plus the possibility of a new Antenna.

However, as Minister Conroy explained to me “$350 is an average figure across a Satellite installation as well as just a traditional installation”.  And perhaps most importantly “That’s not the price of a Set Top Box

So it is important not to be drawn by the hype around the big number which makes the whole thing look like a waste.

Key for me is that we shouldn’t play the need for new antenna’s – there are some massive blackspots across our major capital cities, and the old antenna’s just don’t cut it.

I spoke to the Minister about people in fringe areas where there are blackspots – he clarified “in Metropolitan Australia, the Metropolitan TV stations are going to be in some cases putting in an ‘infill’ antenna” which will overcome some of the blackspots – but there is no decision on that. “Alternatively, if you are in a blackspot that they are not going to service with a new mast, you will get access to the Satellite service that provides all 16 channels

So, what of Ruslan Kogan’s comments that we should be getting a better deal, more bang for our buck?  Frankly, this just shows how little many technology people know about the abilities of some members of our community to make the switch.  To get the installation done, and to learn how to use it.  Remember, this ‘change’ is being FORCED on people – you don’t opt in, your old TV simply won’t work after 2013!

I can imagine some installers spending 30 mins with people, others several hours.  That’s the law of averages applying across this scheme.

Plus, the cost includes the ability for users to call a 1800 number if there is a problem with the box, after which someone will come out and fix or replace the box.  There is a lot more to this than just a box.

Minister Conroy himself challenges the likes of Harvey Norman to tender for the work if they feel they can do it cheaper, but to date they have not chosen to do so in regional Victoria.

The real issue is not the cost per household, or the cost of the set top box.  The real issue is rorts.

Sure, the scheme has been in use in Regional Victoria, but with respect, thats a small market and scams and rorts don’t bare much fruit in small markets.

The policy details that it is the Department of Broadband, Communications and the Digital Economy’s responsability to keep the fund running to account and and minimise and eliminate fraudulent activity.

So, what of the comparison to the government’s failed home insulation scheme?  In that scheme, “installers” knocked on peoples doors offering them FREE INSTALLATION – random, cold calling of people across Australia.  Resulted in installs not happening but being paid for, and in some cases homes being paid for who already had insulation.

How will this be different.  Number 1 – there is no cold calling.

Centrelink firstly write to everybody who is eligible, then those people contact Centerlink and say ‘Hey we’d like it’ and if they don’t want it or need it they don’t get it” Minister Conroy Explains.

Then a time for installation is arranged, and the department has what it feels is a thorough process for the approval of installers.

If you need any cabling, if you need a new antenna, or your antenna needs adjusting” they do all that explains the Minister

After the installation Centerlink follow up with a call to check it all went well, and of course there is the follow up support line for all users.

This is a pretty comprehensive process, none of which existed for the Pink Batt scheme.

That’s not to say its flawless.  Imagine when this gets to Sydney.  There are 4-5 million people in the wider metro area, and while I have no research to back it up, I’m confident there is still a very long way to go with the switch over.  So, with hundreds of thousands of potential ‘applicants’ for the Household assistance scheme, there will most certainly be a large labour force created of installers who will join the scheme.  We won’t have hundreds of ‘installers’ popping up who people can call.  More likely we’ll see a handful of companies, but a massive number of contractors working for those companies, and with that many people on the ground, who’s doing the checks against the installer paperwork to confirm that when someone happened to ‘need’ a new antenna, they really did need it! Or if it’s based on time spent, who’s double checking that?  Sounds like that’s the role of Centrelink in this scheme.

Senator Conroy and his team need to make sure this scheme stays within its $308million allocation.  The Pink Batt scheme did not, in fact the clean up of that scheme is costing more than this Digital TV Scheme altogether!

But, if it does stay within budget, it also needs to serve as many people as possible.  Imagine 3 months before switch off, talk-back radio will be flooded with callers who haven’t been able to make a booking because the scheme has ended, reached its budget.  The Government won’t want that, however, nor will they want the thing to go over budget becuase then the story will be about the ‘overpriced installations’ that drove it over budget.

You see this is lose-lose for the Government in a purely political sense, and I’m not entirely sure why they’ve done it.

What’s the answer though? Well one of the key things about the ‘audience’ for this scheme, is that they are battlers, on maxium pension, and frankly, they are probably big TV watchers!  But none of the FreeView ads do anything to educate them – they think all these new channels are some sort of ‘new’ thing like Foxtel was.  I don’t think there is a realisation yet that the good old trusty TV just won’t work any more!

I put that to the Minister this week, his reply “The good news Trevor is we’ve just completed (the switch off of Analogue in) 455,000 homes (in Regional Victoria), and at this stage almost no-body ended up with a blank screen” – In the 600,000 homes switched off already the Minister claims “we’ve had almost no cases where people have not known there is a switch off coming

So for me, the key facts:

  • The scheme covers
    • Set Top Box
    • Installation
    • Any new cabling or Antenna required
    • 12 Month follow up support
  • You cannot be cold called, you are basically invited into the scheme
  • Centrelink is providing follow up calls on all installations

I’d be interested to see what Harvey Norman and Ruslan Kogan would quote to provide the above service to a random selection of let’s say 20 households, with no prior knowledge of the state of the home, the cabling or the Antenna – Ruslan? Gerry?







  1. Mark

    May 13, 2011 at 6:36 am

    As a qualified tech that has done this type of work in the past, youu00a0can probably compare the labour costs to a Foxtel Satellite install.u00a0 The tech basically gets around $50 to 60 per install as a contractor, but all equipment including the coax,connectors etc are supplied by the contracting company.u00a0 The time allocated is around 1 hour to do the antenna & set top box install. u00a0The quality of the set top box tuner sensitivity will depend on how many antennas need repair or replacement, so it would be in the interest of the companies that get the contracts to use good quality boxes.u00a0 I expect as in the past that the large companies that get these contracts will make at least 50% profit after all costs at the expense of the poor technician that is desperate for the work in a declining TV repair industry. u00a0As a guide, the average home requires 10M quality RG6/ Q cable, coax connectors, a wall plate, & miscellaneous hardware $10 to $15, Quality TV Antennas wholesale start from $30 to 40.u00a0 So cost to do an average home with a new antenna would be around $115 which includes the contractors labour. The retail cost from large antenna companies to do an antenna replacement alone is around $300 to 350, set top box excluded.u00a0 If the contracts went to qualified technicians that run their own businesses, then these people would be able to provide not only a better technical service to the customer but will also get more money in the pocket & give the customer better service.u00a0nu00a0u00a0

    • Anonymous

      May 13, 2011 at 6:40 am

      Excellent insight Mark. My only comment would be that if you give it to single qualified techs, the overhead in government is higher to manage it, and the potential for rorts is higher, just look at how the shonky installers brought the Pink Batt scheme down and the the credible qualified installers went with them….n

  2. Rob Rigby

    May 13, 2011 at 9:00 am

    Trevor, I agree that at first that $350 figure looks too high. I can install a STB in minutes but the point is that they are not getting installed at my house. If experience with my mother and mother-in-law counts for anything I found that they just don’t get it and no level of saying “see? It’s simple” will make them. Many still have video recorders and that needs to be taken into account when you install as they want to record their favourite shows. Simple? Just tell them to tune to AV1. But they say I want to watch channel ten etc. The after install service and dealing with simple questions over and over for 12 months can easily blow out that $350. I wouldn’t have the patience to do this on a grand scale. Count me out. Those guys will deserve a medal.u00a0

  3. Brian Kentwell

    May 15, 2011 at 12:50 pm

    I am an owner/operatoru00a0and this will be a nightmare if you take it on as an installer.nI hear thru the industry that the UEC brand boxes used for the VAST service are already breaking down and are not very user friendly anyway.nI have replaced 300+ stb’s in 8 years, all but 1 being under12 mths old.I believe the pensioner can make another claim if the box has to be changed.The $350 figure I hear is really over the top if the signal is ok and only installationu00a0u00a0nof the receiver is required.nThis figure is well under par though, if a full installation is required and God forbid, an amplifier or mast is needed.Eachu00a0propertyu00a0can be so different.nThere is also a requirement of calling backu00a0in 12 months time.I don’t know how the government can put a blanket cost on this, but they have to start somwhere I guess.Try 1 or 2 days when the client forgets something or presses the wrong button and loses everything, that’s if they understand it in the first place.What I don’t understand is that these people have had videos for years and can’t work an stb?.Time is money, and I’m thinking of bringing in a $30 charge for return calls due to operator error, it has become that bad for me selling boxes.(60% re-calls)nTo be honest, these hard done by pensioners who think everybody owes them a living and who’s pension the tax-payer is already providing,bought their original tv’s because they wanted to watch TV so why ARE they being given boxes anyway to access the new signal? TV is a luxury not a neccessity.Where will it end? How about the TV in the bedroom another hand-out? If there is a problemu00a0inside12 monthsu00a0do the pensioners ring the govt, or the company who supplied the labour and is this cost to the company or the installer?nAlso there will be large companies who have the contractsu00a0to supply boxes ripping off installers and there will be a sudden appearence of so-called digital expert installers popping out of the woodwork as there is already.Then there’s the pensioners themselves or the companies that will say they need new antennas etc when it’s not needed.The actualu00a0costs have so many variables and as isu00a0it, plenty of room for rorting but will cost heaps to police it all.nThe best way I see to simplfy things, is to supply the box only, if and when the householder applies for it,u00a0with the threat of fines for false claims (as with bogus insurance claims) and the householderu00a0pays to rectify any signal issues with an installer of their choice. What would they do if their reception went bad now, they’d ring an aerial company and pay for it themselves!!nYou could even have the installers/antenna firmsu00a0apply for the boxesu00a0as needed, and claim install and admin costsu00a0as with anyu00a0job performed already,u00a0where an account is issued.nResidents applying for the Optus Aurora satellite service, have to have an installer out there first to confirm there is no off-air signal for terrestrial television,u00a0beforeu00a0the activation ofu00a0the smart card.nI’m sure an installer/company won’t jeopardise their good name or risk fines for bogus claims.nREDUCE COSTS AND MINIMISE RORTING BY CUTTING OUT THE MIDDLE MAN, EASY, PROBLEM SOLVED.nu00a0nnnu00a0nu00a0u00a0

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