The Ofcom Digital Dividend Review (DDR)

Ofcom- press release

17|11|05
The Ofcom Digital Dividend Review (DDR)

Ofcom announced today the beginning of the Digital Dividend Review (DDR) - the project which will examine the options arising from the release of spectrum afforded by the digital switchover programme.

The airwaves – or radio spectrum – are a finite national asset. The five terrestrial television channels that currently broadcast in analogue (BBC1, BBC2, ITV, Channel 4 and five) use nearly half of the most valuable bands of spectrum below 1GHz.

Television uses spectrum based on a 50 year old planning model when there were very
few alternative uses of these frequencies. There have been a number of significant innovations since, such as colour television and mobile telephony; however, this important spectrum is still used according to a plan originally prepared in the late 1950s.

Digital broadcasting is roughly six times more efficient than analogue, allowing more channels to be carried across fewer airwaves. The plans for digital switchover will therefore allow for an increase in the efficiency with which the spectrum is used - including the potential for a large amount of spectrum to be released for wholly new services.

This cleared spectrum – the Digital Dividend – offers real opportunities for wireless innovation. The Digital Dividend could enable the launch of a wide range of different services. For example:

* New mobile services, with high quality video and interactive media delivered to handheld devices.
* Wireless broadband services, with high-speed data and voice services.
* Wider coverage for advanced services in remote and rural areas. This spectrum is particularly suitable for low cost, wider-area coverage.
* Advanced business and broadcasting services, such as those used to support major sporting events.
* Additional television channels including possible High Definition (HD) channels carried on Freeview.

This is not an exhaustive list, nor does it indicate prior preference. The UK has a proven reputation for innovation in wireless services and it is likely that ideas for other new services will emerge before and after switchover.

Maximising the Digital Dividend

Historically, all uses of spectrum were decided by the Government or Government Agency. This command-and-control approach allowed for minimal flexibility as technology and markets changed. Ofcom has adopted a market-led approach to spectrum to ensure that this valuable resource goes to the people and organisations who are most likely to use it to the full.

Ofcom estimates that the digital switchover programme will release up to 112 MHz of spectrum in the UHF (Ultra High Frequency) band for new uses. The UHF band is prime spectrum, because it offers a technically valuable combination of capacity (bandwidth) and range. It is much sought after for a whole range of services likely to be used by millions of people every day.

What happens to the companies using this spectrum now?

Clearing this spectrum may need changes to the Wireless Telegraphy Act and Broadcasting Act licences held by a number of different organisations with the right to transmit in these frequencies. In some cases, new licences will need to be issued.

All the companies involved should be on notice that the allocations in this spectrum will be changing. The full list of channels involved is set out in the Annex to this note.

There will also be some unused spectrum where a frequency used by a transmitter in one part of the country is effectively unoccupied outside the range of that transmitter in another part of the country. This is known as ‘interleaved spectrum’ and can be used for a variety of local or regional services. Ofcom estimates that around 208 MHz of interleaved spectrum may become available. The future use of this spectrum will also form part of the Digital Dividend Review.

At present, interleaved spectrum in the analogue television bands is used by services known as Programme-Making and Special Events (PMSE). PMSE services include outside broadcasts and televised sporting events such as football matches as well as radio microphones used in theatres and other public venues. Ofcom will consider these existing services carefully in planning for the use of this spectrum after digital switch-over.

European coordination

The airwaves do not respect national borders. Countries have to work with their neighbours and near-neighbours to ensure that transmissions in one nation do not interfere with transmissions in another.

The digital switchover programme should take place on a region-by-region basis. The regional sequence was designed so that those parts of the UK closest to other European nations (the Republic of Ireland in the case of Northern Ireland, and France, Belgium and the Netherlands in the case of Southern and Eastern England) would switch over last, whilst those who are furthest from possible interference – in Scotland – would switch over first. This sequence will allow the greatest amount of time for coordination with other countries where that is needed.

In May 2006, the International Telecommunication Union (ITU) will host an international conference –the Regional Radio Conference (RRC) – to plan the future use of spectrum across Europe, and agree arrangements to share frequencies where signals cross national boundaries.

Ofcom’s work plan

Over the next year Ofcom will assess how the cleared spectrum should best be made available for use. Ofcom will analyse the most efficient use of these frequencies and how best they should be packaged for potential users. It will also begin work on auction design, with a view to ensuring that the spectrum is acquired by users who are likely to make best use of it.

This means Ofcom will:

* consider the potential uses for the available spectrum;
* set out the technical limits on spectrum use to prevent potential interference;
* draw up packages of frequencies that give flexibility to the market;
* design an efficient auction/allocation process.

This preparatory work will involve considerable technical, economic and market analysis. Ofcom would also like to hear as many views as possible from people and organisations with an interest in the use of this spectrum. It will hold a series of briefing seminars throughout 2006, with the first due to take place in January or February. Ofcom will also work closely with the main Government departments with an interest in the use of spectrum – the DTI, DCMS and the Treasury.

The proposed timetable is:

* Digital Dividend Review (DDR) begins - November 2005
* Programme team and consultants in place - end 2005
* Stakeholder meetings begin - Jan-Feb 2006
* Outcome of RRC - June 2006
* Digital Dividend Review completed - Q3 2006
* Ofcom publishes final proposals - Q4 2006
* Digital switchover programme begins - 2008
* Digital switchover programme completed - 2012

Ofcom Chief Executive Stephen Carter said: “The benefits of digital switchover, in terms of efficient use of spectrum and subsequent innovation, are becoming clearer.”

He added: “This Review is intended to maximise the Digital Dividend.”

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