Handing out the digital spectrum dividend

OvumThe digital dividend spectrum is a prime resource previously used by analog broadcasting, and is particularly suitable for delivery of high-bandwidth services and indoor coverage.
Because of the new services it makes possible, it can have a positive impact on social and economic development. UK regulator Ofcom estimated that the allocation of the digital dividend would provide between €7.5 billion ($10.5 billion) and €15 billion over 20 years for the UK economy alone, with the European Commission (EC) estimating that a coordinated approach would increase the potential impact of the digital dividend by an additional €20–50 billion between now and 2015.
This spectrum is suitable for a wide range of uses: wireless broadband, mobile TV, more digital terrestrial television and low-power applications such as Wi-Fi. For wireless operators in particular, it offers a good combination of range and data capacity, and is capable of penetrating buildings and covering large geographical areas with relatively few transmitters.
However, expectations should be tempered by realism about the take-up of any new services launched on the spectrum.
Regulators certainly have their eyes on this spectrum, mostly with a view to its potential for driving wireless broadband. Among other things, wireless broadband is regarded by some regulators as the most promising means of providing broadband services to rural areas and overcoming the ‘digital divide’.
Thus the digital dividend provides a new opportunity to realize the EC’s goal of “broadband access for all” in Europe. While a worthy policy goal, this might prevent the broader rollout of new services on a national basis.
The target date set by the EC for analog switch-off in EU member countries is 2012. Although some leading countries such as Finland, Sweden, Switzerland and the Netherlands have already finished their switchover, most countries are still making plans.
More speed is both necessary and desirable to fully realize the benefits.
France, Sweden, Finland, Switzerland and the UK have all dedicated spectrum in the 790–862MHz band (known as the 800MHz band) for wireless services, but most other European countries have not yet decided which band to use.
Harmonization is crucial
In order for devices to work effectively across the European Union, a coordinated approach to spectrum allocation among the member countries is crucial. Other national regulators should therefore now follow suit and allocate this band for wireless services too.
A harmonized approach to spectrum allocation was part of the EC’s 2007 reform package, but since it may not be passed in 2009, national regulators should adopt the policy on their own initiatives in the meantime.
Doing so will speed up the development of handsets and other equipment that will use this band. It will also strengthen the development of the single European telecoms market, which is the paramount goal of the EC telecoms framework reform. A consultation published by the EC last week has rightly advocated making this a priority.
Outside Europe, most countries have not set up a concrete plan for how to use and allocate the digital dividend spectrum, although we expect the spectrum to be freed up and allocated during the next two or three years.
The US is leading the way in freeing up and allocating digital dividend spectrum. The regulator, the FCC, completed the auction of spectrum in the 700MHz band in March 2008 and distributed the spectrum to a variety of providers mainly via a technology-neutral approach. The final switchover to digital TV occurred on 12 June 2009.
Meanwhile, the winning operators are trialing services on the released spectrum now and are likely to launch commercial services next year. This puts the US way ahead of most European and Asian countries, and it therefore provides a good example for other countries to follow as they develop their own plans.