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 originated | 28 October 2009
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| Deposited in Parliament |
5 November 2009 |
| Department | Business, Innovation and Skills
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| 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)
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| To be discussed in Council
| To be determined |
| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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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
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