Resellers and stakeholders in the emerging digital free-to-air TV market sector have claimed excess government control is stifling the industry's potential.
Those hampered by the legislation include digital media distributor, Lako Pacific, which has successfully marketed digital TV tuner cards but has seen potential limited by the lack of viewable content available.
Lako Pacific director, Evan Kourambas, said the government was choking free-to-air content.
"If you are just viewing what you can already get through analogue then you must be asking whether you want it [digital TV]," he said.
Government legislation currently dictates that commercial television stations (Nine, Seven and Ten) may use additional bandwidth only to broadcast high-definition TV (HDTV) or content associated with the existing channel, such as program guides. No extra content is allowed. Digital Broadcast Association director, Tim O'Keefe, said there needed to be more flexibility in the legislation.
"The government did introduce digital television but then put some controls on what broadcasters could do with it which did seem a bit strange - they ensured that the commercial broadcasters weren't allowed to do multi-channel broadcasts," he said.
By limiting content on both digital TV and digital radio, the emerging digital TV tuner and set-top box reseller channel has a tough story to sell to consumers despite the technology being available.
HDTV set-top boxes cost about $500. By contrast, PC TV tuner cards support standard definition (SD) and HDTV signals. The cards, which typically sell for under $300, also have personal video recorder (PVR) capabilities.
IDC analyst, Mike Sager, said he also saw government restrictions and regulation of competition as being one of the major hurdles for the reseller channel to overcome.
"There are a few too many bottlenecks," he said.
The Federal Government commissioned its own report into digital TV legislation four years ago but has so far failed to act on its recommendations to relax restrictions on the industry.
Report co-author, Stuart Simson, now chairman of Emitch, reiterated the inquiry's findings in June this year.
"Four years on from our report, and six years since the digital conversion legislation passed parliament, the market is telling us that the policy has comprehensively failed," he said.
"A few hundred thousand digital conversions in the free-to-air space is absolute testimony to this."