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Digital dividend: clearing the 800 MHz band

Executive Summary

Executive summary

1.1 The UK has been the leader within Europe in planning for the release of a digital dividend. We now face an important decision. This is whether to align more of the spectrum being released in the UK as part of our digital dividend with the spectrum being released in an increasing number of other European countries.

1.2 The background to this issue is that the UK was the first country within Europe to identify a digital dividend. In 2003, before Ofcom came into existence, the Government decided to release a digital dividend of 112 MHz when digital switchover (DSO) was complete. The plan then developed envisaged this dividend should comprise two distinct bands of spectrum:

  • a smaller, upper band of 48 MHz at 806-854 MHz (channels 63-68); and
  • a larger, lower band of 64 MHz between 550 MHz and 630 MHz (channels 31-35, 37 and 39-40).

1.3 The details of this plan have played an important role in developments since 2003, notably in some of the technical planning for DSO and in underpinning international agreements reached with other countries at a major conference in Geneva in 2006.

1.4 Since 2003, we have acted to increase the size of the UKs digital dividend. We have done this by securing the clearance of channel 36 (of aeronautical radar) and channel 38 (of radioastronomy). This means that, when DSO is complete toward the end of 2012, the UKs digital dividend should amount to some 128 MHz of high-quality spectrum.

1.5 We have also set out a clear strategy for the way in which we will release this spectrum, through our Digital Dividend Review (DDR). Our goal throughout has been to maximise the total value to society that using this spectrum is likely to generate over time. We concluded that, in general, the best way to achieve this is by taking a market-led approach, creating freedom and flexibility for users to make decisions about spectrum use.

1.6 This approach means the release of the digital dividend will create huge opportunities for more innovation and competition in the wireless communications sector, including the deployment of new generations of mobile broadband technology and the expansion of digital terrestrial television (DTT) and mobile TV.

1.7 It is now increasingly clear many other European countries will also create a digital dividend, following the UKs lead. We warmly welcome this. However, the way in which they do this has important implications for us. In particular, we expect a critical mass of other European countries to release a larger, upper band of spectrum than we have previously planned. This will comprise 72 MHz at 790-862 MHz channels 61-69, also known as the 800 MHz band. Some countries may also release a lower band as part of their digital dividend, but plans for this are much less clear.

1.8 So far, Finland, Sweden, France and Switzerland have decided to release the whole 800 MHz band as their digital dividend. From discussions we have held, we believe that a number of other European countries are likely to follow suit over the coming months. The reason that these countries are planning to release more spectrum in the upper band is that, for various reasons, this spectrum is likely to be particularly suitable for new generations of mobile broadband services, though other uses are also technically possible.

1.9 This consultation document considers the costs and benefits for the UK of aligning the upper band of our digital dividend with the spectrum that we expect to be released in these other European countries. It concludes, in short, that we can expect very substantial net benefits to UK citizens and consumers if we make this change. We estimate these net benefits, conservatively, at 2-3 billion in net present value (NPV). A major reason why these benefits are so large is that, if we make the same spectrum available as other countries, better mobile broadband services can be provided to consumers at lower cost.

1.10 However, making this change does have important implications. This is because we have previously planned to use channels 61 and 62 for DTT and channel 69 for programme-making and special events (PMSE), mainly wireless microphones, after DSO.

1.11 To release the whole 800 MHz band, we need to clear channels 61, 62 and 69 of DTT and PMSE. But we need to do this in a way that does not adversely affect the important services that would have been provided using this spectrum. This means finding other spectrum that is a suitable replacement for channels 61, 62 and 69. It also means making sure we plan the change from using one set of frequencies to another very carefully so that we avoid any significant adverse effect on the users of DTT (including viewers) and PMSE.

1.12 This is a complex and challenging task, but we believe it can be done. This consultation document proposes how. The key elements include:

  • replacing channels 61, 62 and 69 with other channels (principally channels 38-40 from the lower band) for DTT and PMSE;
  • timing the changes to avoid any disruption to DSO. This is likely to mean making these changes to the use of spectrum after DSO in most cases; and
  • ensuring existing authorised and planned authorised users of channels 61, 62 and 69 do not bear extra costs that must reasonably be incurred to clear the spectrum.

1.13 We believe the costs of clearing channels 61, 62 and 69 will be modest compared to the benefits. Our estimate is that these costs lie in the range of about 90-200m. These costs could be met by new licensees in the 800 MHz band and/or the Government.

1.14 Figure 1 illustrates the effect of our proposals on the configuration of the UKs digital dividend. The main effect is that the upper band would now constitute channels 61-69, with DTT moving from channels 61 and 62 to channels 39 and 40 and PMSE from channel 69 to channel 38.

Figure 1. Changing the configuration of the UKs digital dividend

a diagram showing the proposed changes to the spectrum

 

1.15 We believe that clearing the 800 MHz band is strongly in the interest of citizens and consumers given the large, long-term benefits they should receive. There will, however, be implications for some. We think the main impact will be a need for some DTT viewers to carry out an extra retune of their set-top box (or integrated digital television) to ensure their electronic programme guide (EPG) continues to operate correctly.

1.16 Retuning is a process that takes just a few minutes. Typically, it requires use of the menu function on DTT set-top boxes and integrated digital televisions. Periodic retuning is desirable in any event (e.g. to ensure new channels are properly identified in the EPG). But it will be very important to ensure practical help is available to assist any viewers who find retuning difficult. This consultation document contains proposals for how this should be done.

1.17 It also discusses the need for the UK and neighbouring countries, including France and Ireland, to agree some changes to the existing international agreements relating to the use of the spectrum in UHF Bands IV and V (470-862 MHz). We have already been asked to make such changes by other countries that also wish to clear the 800 MHz band.

1.18 These international agreements are important because they define the technical parameters of the UKs rights to use spectrum. These technical parameters are, by convention, based on optimising the use of spectrum for a particular type of use, though other uses are also allowed subject to meeting limits on interference.

1.19 At the moment, these international agreements are designed to optimise use of UHF Bands IV and V for broadcasting. We expect the outcome of our negotiations to be agreements that are based on optimising the use of the spectrum below 790 MHz for broadcasting and above 790 MHz for mobile services. These agreements should, however, continue to allow use of either part of the spectrum for other services, subject to meeting limits on interference.

1.20 We support this approach, which is consistent with the principle of service and technology neutrality.

1.21 Finally, this consultation document contains an outline of the next steps in the award of the digital dividend itself. We now expect the main award of cleared spectrum to take place in 2010. This reflects the time required to conclude the international negotiations mentioned above and other technical discussions already under way in the European Conference of Postal and Telecommunications Administrations (CEPT).

1.22 We note and are grateful for the Governments support for our proposals, as set out in Digital Britain: The Interim Report.

Next steps

1.23 We welcome all views from stakeholders on the issues that this consultation document raises. Responses are due by 20 April 2009. We recognise that these issues are complex, and we will hold briefing sessions during the consultation period for stakeholders who would find this helpful.

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