Ofcom, the communications regulator for the United Kingdom, has set out proposals for how it will release the spectrum that will be freed up as a result of the switch to digital television. It says the aim is not to raise revenue for the government but to enable innovative services that will deliver significant benefits to citizens and consumers.
Ofcom says its objective is to maximise the total value to society that using the digital dividend may generate over time. “It is not our objective to raise revenue for the Exchequer, nor is this a consideration that we can take into account, given our statutory duties.”
The 128 MHz of cleared spectrum will become available by late 2012 at the latest as a result of the switch to digital television and clearing frequencies currently used for radar and radio astronomy.
This spectrum forms two blocks, from 550-630 MHz and 806-854 MHz, and a further 16MHz of interleaved spectrum from 790-806 MHz. It is likely to be made available in lots of 5 MHz and 8 MHz across the United Kingdom, with a cap of 50 MHz for any one bidder.
Potential applications include mobile television, mobile broadband, and standard and high-definition television services.
Ofcom plans to auction the spectrum, starting as soon as summer 2009, using what is termed a combinatorial clock auction format. This involves a two stage process, with an open auction moving to sealed bids.
Awarded licences will have an indefinite duration, with an initial term until 2026, and will be tradable. The main restrictions will be designed to avoid technical interference. Ofcom does not propose to impose ‘use it or lose it conditions’ or any roll-out obligations or access requirements.
The European Commission is meanwhile proposing to set out a regulatory road map on the digital dividend, which could become binding on the United Kingdom.
As an advocate of a free market, Ofcom is in favour of a non-mandatory approach that will effectively allow member states to opt out.
The technology neutral auction will play a critical role in determining the extent to which the cleared spectrum will be used to deliver more television channels, high-definition or mobile services, or to provide fixed or mobile wireless broadband services. Ultimately, it seems the market will decide.
The excitement of the 3G mobile auctions raised over £22 billion for the United Kingdom government in 2000 at the height of the technology boom. Recent auctions have been more modest. Qualcomm recently picked up 1452-1492 MHz of L-band spectrum suitable for mobile television services for £8.2 million.
In its customary manner, having set out its detailed proposals, Ofcom is inviting consultations on the plans. The consultation will close on 14 August 2008. Full details are available on the Ofcom web site.