Sunday, November 27, 2005

Ofcom/ Digital Dividend Review
Ofcom to sell off analogue spectrum after switchover
Owen Gibson, media correspondent
Friday November 18, 2005
The Guardian

Media regulator Ofcom yesterday announced plans to auction the analogue spectrum after the terrestrial channels switch to digital television, a move eagerly awaited by technology, telecoms and broadcasting companies.

But Ofcom said yesterday to maximise revenue it would not be prescriptive about what the spectrum could be used for, opening up the possibility of bids from mobile operators, broadband providers, new local television services and other wireless services. Existing broadcasting platforms such as Freeview are likely to bid for the spectrum to allow channels to launch next-generation high definition services.

The regulator said it would abandon the existing planning regime, which allocates a specific use for each part of the spectrum and guided the auction for 3G licences in April 2000. Instead, it will be up to the bidders to propose how the so-called "digital dividend" should be used.

Stephen Carter, Ofcom chief executive, said: "The benefits of digital switchover, in terms of efficient use of spectrum and subsequent innovation, are becoming clearer. This review is intended to maximise the digital dividend."

The cleared spectrum, which will become available on a region-by-region basis as analogue television is switched off between 2008 and 2012, is seen as valuable because it occupies the versatile UHF band, offering a combination of high capacity and long range.

Analysts said bidders will not pay anywhere near the £22.5bn raised from mobile operators for the 3G networks that allowed them to launch high bandwidth services such as mobile TV and music downloads. Any money raised will flow back to the Treasury, prompting some critics to question why the government is ordering the BBC to pay for analogue switch off through the licence fee.

Liberal Democrat culture, media and sport spokesman Don Foster said: "Ofcom's welcome initiative will test current government estimates that the Treasury will gain half a billion pounds a year from switchover. If this figure is correct, serious questions must be asked as to why the BBC, not government, should pay for the government's policy of switchover."

Ofcom's market-led approach could be bad news for the BBC, which will have to rely on the Department of Culture, Media and Sport to intervene and make a valid case for handing some of the spectrum to the corporation to enable it to launch high definition channels on Freeview.

"We make no bones about the fact that the market is best placed to decide the best use for spectrum rather than the regulator," said an Ofcom spokesman. However, he said the regulator would listen carefully to the case for intervention if it was demonstrably in the wider public interest.

It plans to consult the major stakeholders in the coming months and publish its final proposals in the last quarter of 2006, just over a year before the first analogue transmitter is due to be switched off in the Scottish borders.

Another factor will be the Regional Radio Conference due to take place in May 2006 with other European regulators to ascertain how spectrum that crosses national borders should be divided. Parts of the south and south-east, which are most likely to interfere with signals from France, Belgium and Holland, will be among the last to convert to digital in 2012.

Using the 'digital dividend'

New mobile services, with fast video and interactive applications

Widespread wireless broadband offering voice calls and fast internet

Outside broadcast services

High-definition Freeview channels

Extra interactive services and television channels

Local television

Extending high-speed wireless services to rural areas

New ideas yet to emerge

Source here

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