As Ihug solidifies its plans to move into digital television, TVNZ is moving further away from both interactive TV and the Internet service provider space with the termination of its ZakNet trial.
"In terms of delivering interactivity to television, that's all turned off and nothing will be done until the charter for TVNZ is defined by the minister," says new media spokesman Doug Stevens.
TVNZ had been working with ZakNet, a Kuwaiti-based satellite communication specialist.
ZakNet pulled out of Australia and New Zealand in late 1999 effectively ending the trial. The company will concentrate instead on the Middle East region.
The ZakNet product, called ZakSat, consisted of a small satellite dish that connected a LAN (local area network) to the Internet at speeds approaching 8Mbit/s downstream rates.
Users would still need a low-volume ISP connection to send upstream data.
TVNZ hoped to take advantage of this asymmetrical model to deliver interactive TV and possibly even ISP services to customers.
Cabinet declined to approve TVNZ's $200 million digital TV proposal because "it is necessary for the government to establish a wider public policy framework within which to consider the expansion of digital television services.
It believes that there needs to be broader public policy debate about how these new services might be introduced."
"We're to concentrate on our core analogue business for now," says Stevens.
The Minister for Broadcasting, Marian Hobbs, will undertake an extensive review of TVNZ and broadcasting in general, according to her press secretary, Trevor Henry.
"Her immediate priorities are a task force on funding and the charter for TVNZ and the question of quotas, that sort of thing."
Henry expects legislation will be introduced to the house early next year.
Meanwhile Ihug Digital TV (IDTV) is now operating in Auckland and being readied for rollout to other centres but lacks any content beyond standard satellite channels and less-than-fresh movies.
Force Corporation not only has access to new movies by virtue of its Village cinema interests, it has ventured into movie production, with a share in the successful What becomes of the BrokenHearted?, and owns a third of South Pacific Pictures, producers of Shortland Street.
TVNZ will still play a key role in an IDTV network. The broadcaster's transmission arm, BCL, last year signed up Ihug as the first customer for its new digital microwave backbone.
IDTV has already licensed spectrum and established high points in other centres, but will use BCL's network to trunk its TV service around the country.