Documents considered by the Committee on 25 November 2009, including the following recommendations for debate: Security of gas supply Mutual legal assistance in criminal matters between the EU and Japan - European Scrutiny Committee Contents


3  REAPING THE BENEFITS OF THE DIGITAL DIVIDEND IN EUROPE

(31082)
15289/09
COM(09) 586

SEC (09) 1436
SEC (09) 1437
Commission Communication: Transforming the digital dividend into social
benefits and economic growth


Commission Staff Working Documents


Legal base
Document originated28 October 2009
Deposited in Parliament 5 November 2009
DepartmentBusiness, Innovation and Skills
Basis of consideration EM of 18 November 2009
Previous Committee Report None; but see (29169) 15365/07 HC 16-vii (2007-08), chapter 11 (9 January 2008)
To be discussed in Council To be determined
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested

Background

3.1 The switchover from analogue to digital terrestrial TV — with the latter needing five or six times less frequency — will free up large amounts of valuable Ultra High Frequency radio spectrum across Europe. Estimates of the value of this so-called "digital dividend" range between £5.4 billion and £14.4 billion over 20 years, because of the opportunity thereby provided to meet the fast growing demand for new and existing broadcasting and communication services.

3.2 Nearly two years ago, the Committee considered an earlier Commission Communication 15365/07 on this topic — Reaping the full benefits of the digital dividend in Europe: A common approach to the use of spectrum released by the digital switchover. The Commission estimated that the total value of electronic communication services in Europe was £180 billion — the equivalent of 2.2% of annual European GDP. It pointed to the role of spectrum as a "growth enabler", and argued that more effective management of spectrum would boost innovation and competitiveness in ICT (Information and Communication Technologies) and help provide more affordable services to European citizens. Particularly, the Communication noted that, as a result of the "digital dividend", consumers could benefit from faster wireless broadband communications, additional terrestrial broadcasting services and mobile multimedia services, such as mobile TV. The Commission argued that for this "digital dividend" to be maximised, liberated spectrum should be harmonised on the basis of 3 sub-bands within the 470-872 MHz UHF band which would be suitable for specific services:

—  unidirectional high power networks for the continuation of existing TV services and new broadcasting needs;

—  unidirectional medium to low power networks for mobile multimedia services and new converged services, including mobile TV; and

—  bi-directional low power networks for fixed and mobile broadband services.

3.3 This was all set out in greater detail in our Report on this Communication , where the then Minister for Competitiveness at the then Department for Business, Enterprise and Regulatory Reform (Stephen Timms) said that this "mandatory" approach was not favoured by either himself or some other Member States. He explained that many countries that had significant analogue terrestrial TV would find that they needed most of the UHF spectrum to support multi-channel Digital TV; by contrast the UK could free up approx 30% of the UHF spectrum for new uses principally because it had fewer coordination issues. He further noted that switchover was at very different stages across the Member States; in some, such as Sweden, the process was complete, whereas others had only yet provisionally allocated spectrum: "mandated coordination could thus prove costly and very disruptive." Though recognising that there might be advantages to a coordinated approach to the digital dividend across Europe, he considered that there was a danger that mandated harmonisation, through attempting to pick winners and the potential for delay it would introduce to the decision making process, would distort the development of the market. A number of Member States were opposed to the Commission's proposals or had yet to make their position clear, and certain of them would "face real challenges in both rolling out digital terrestrial television services and freeing up spectrum for other uses." He noted that spectrum allocation was a matter for Member States and that, in the UK, Ofcom would award the spectrum freed up nationally by the switchover through a market-led auction on a technology and service neutral basis.

Our assessment

3.4 As the Committee had noted in considering related Commission proposals — most recently, its proposals for revising the present regulatory framework, which it recommended for debate in the then European Standing Committee — this was not an isolated instance of the Commission seeking to mandate a particular approach within a framework that was, instead, supposedly centred on working with Member States and the relevant industries on a market-led basis. In this instance, the then Minister put it very clearly: "There is no clear gain, and much potentially at risk, from setting aside certain spectrum bands for specific services. There are also tensions in these proposals with the Commission's stated aim of greater market mechanisms in spectrum management which we support."

3.5 The Committee accordingly endorsed the Minister's proposed approach regarding the Conclusions that the Council was eventually to adopt on this Communication, viz., welcoming the opportunity for debate and for coordination between Member States but not calling for any mandatory measures.

3.6 We also cleared the document, which we considered relevant to the debate in the then European Standing Committee on the Commission's proposals for revising the electronic communications and network services regulatory framework.[2] That debate took place on 18 March 2008.[3]

The Commission Communication

3.7 The Communication is accompanied by an impact assessment and an executive summary of this latter. In sum, the Commission recommends that Europe takes a co-ordinated approach when dealing with national "Digital Dividends" to maximise the social and economic benefits to all Member States. It suggests an action plan which includes Member States completing their digital switchover by 1st January 2012, proposes a harmonisation of the 790-862 MHz band ("the 800 MHz band") and includes technical measures to promote spectrum efficiency. It favours the use of specific technical standards for both transmission and for consumer receiver products. It also looks forward to further "improvements" in the use of the "digital dividend" which are currently being researched.

3.8 In his Explanatory Memorandum of 18 November 2009, the Minister for Digital Britain in the Department for Business, Innovation and Skills (Stephen Timms) explains that, in the UK, the communications regulator, Ofcom, has consulted on proposals as to what the UK would do with this spectrum once digital switchover is complete in 2012. These proposals, he says, included auctioning two bands of spectrum released nationwide, as well as the spectrum that will be available in each region for low power services that do not interfere with the digital television transmissions He further explains that the proposals were amended earlier this year "as the UK chose to align with a growing movement in Europe to clear the upper part of the television bands (the 800 MHz band) which would most likely be used to provide wireless mobile services."

3.9 The Minister goes on to outline the Commission's approach as follows:

    "The Commission is keen to see a co-ordinated European approach to what is done with the Digital Dividend and when, especially since it views this as an opportunity to boost all the European economies. For that reason the document proposes:
  • "A cross-Europe switch-off of analogue television date of 1st January 2012. The document does [not] propose that member States should necessarily switch to digital, merely that analogue has to be switched off.
  • "Adopting harmonised technical conditions of use for the upper band (790-862 MHz, the 800 MHz band) but without mandating that a Member State has to make the band available for non-broadcasting use .
  • "Adoption of a common EU position on key aspects of the digital dividend for the forthcoming World Radio Conference in 2011.
  • "The Commission could propose to the European Parliament and Council that Member States cease to use the 800 MHz band for high-power broadcasting services and implements the technical harmonised conditions proposed.
  • "To apply minimum levels of spectrum efficiency measures .
  • "Further work on initiatives to improve the use of the digital dividend spectrum, such as requiring that all consumer TV reception products put on sale from a date to be defined include MPEG4 compression technology."

The Government's view

3.10 The Minister sets out the Government's policy on spectrum clearly:

    "… to be service and technology neutral and to allow the markets to decide the best use of spectrum, wherever possible not mandating the use of specific technologies as often such decisions can be later shown to be sub-optimal."

3.11 He explains that the UK has had in place since 2005 plans for digital switchover which see completion by 31 December 2012. This, he says, is consistent with the Council Conclusions of December 2005 on the Commission's 2005 Communication on this subject.; it would not be practicable to bring this completion date forward to 1 January 2012, not least because that would require renegotiation of the bilateral agreements with neighboring states which are based on switchover in the UK regions bordering those countries during 2012. He therefore supports the Presidency's proposed response from the Council arguing for a broad "2012" date to be used, which is "still encouraging other Member States to commit to a programme of switchover if they haven't already done so."

3.12 The Minister further explains that:

—  while the majority of Member States currently plan to complete switchover by 1 January 2012, the UK is one of nine countries in Europe who are committed to 2012 dates with a further two without specified dates and one with a date in 2015;

—  under the international agreements made in 2006 in Geneva, analogue transmissions are protected up to 2015;

—  digital switchover spectrum could be used in the UK to support provision of services for the London 2012 Olympic Games and so could not be made available for new commercial services until after that date.

3.13 The Minster then says that:

    "Mandatory harmonization of the cleared 800 MHz band, which the Commission says it could propose, is considered unnecessary. There is a clear movement across Europe, driven by industry, to making that band available for mobile broadband technologies. As such it is not clear what value would be gained from any Commission mandate."

3.14 With regard to technical measures of spectrum efficiency, the Minister says that while they are unlikely to have any negative impacts, Ofcom already has a duty to ensure optimal use of the spectrum:

    "There is a risk that the proposed measures would contradict Ofcom's own measures and it is possible that spectrum efficiency does not have to be achieved solely through regulation but could be achieved through market mechanisms."

3.15 With regard to the further improvements that could be made in the use of the Digital Dividend identified by the Commission, the Minister says:

—  Mandating that digital TV receivers sold after a certain date are capable of a compression standard at least as efficient as the H264/MPEG-4 AVC standard

    "This is considered by the UK to be unnecessary as the market is already moving in that direction and there would be an increased risk of regulatory failure from taking the wrong action";

—  Setting standards for the ability of digital TV receivers to resist interference

    "UK feels here that the challenges should not be underestimated and the Commission should engage with early discussions with the European Telecommunications Standards Institute (ETSI) and the Digital Video Broadcasting project (DVB) and involve organisations other than broadcasters to ensure non-broadcast television interference is referenced";

—  Adopting a common position on the use of the "white spaces" as part of a possible extension of the digital dividend.

3.16 The Minister then explains that Ofcom has "already consulted widely on the UK's digital switchover plans and on aligning the 800 MHz band clearance with the rest of Europe", and says that the Government is also currently consulting on a Direction to Ofcom to implement a number of spectrum modernisation measures outlined in the Digital Britain Report published in June — "a key proposal being the earliest possible clearance of the 800 MHz band and release to the market (Consultation on a Direction to Ofcom to Implement the Wireless Radio Spectrum Modernisation Programme, available at http://www.berr.gov.uk/consultations/page53062.html). That consultation closes on 8th January 2010 and the government response will be produced within 3 months thereafter."

3.17 The Minister also refers to impact assessments produced for the UK consultations on the digital switchover, on aligning the 800 MHz band with the growing movement in Europe and says that one is included in the current consultation.[4]

3.18 Finally, the Minister says that there are no additional financial implications with the Commission proposals that have not already been addressed in the current consultation and the Ofcom consultations on clearing the 800 MHz band , which he says are available at http://www.ofcom.org.uk/radiocomms/ddr/.

3.19 Looking ahead, the Minister says that the Commission's proposals are "likely to be formally presented to the Council later this year."

Conclusion

3.20 Given the general background outlined at the beginning of this chapter and the Commission's continued hankering after a more mandatory approach than appears to be justified, we shall retain the Communication under scrutiny.

3.21 Though the Minister seems uncertain about the immediate timetable, it seems that the Council will be invited to adopt formal Conclusions on the Communication in the not too distant future. They will then form the basis upon which the Commission will take this work forward. We should accordingly be grateful if he would write to us before the relevant Council meeting, outlining the Conclusions that he expects to be adopted and explaining how they address his justifiable concern.



2   See headnote: (29169) 15365/07 HC 16-vii (2007-08), chapter 11 (9 January 2008) Back

3   See Gen Co Deb, European Committee, 18 March 2008, cols. 3-13. Back

4   http://www.ofcom.org.uk/consult/condocs/ddr/ddrmain.pdf (Annex 5).

http://www.ofcom.org.uk/consult/condocs/800mhz/800mhz.pdf (Annex 5).

http://www.berr.gov.uk/files/file53061.pdf (Annex F). Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2009
Prepared 4 December 2009