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Ofcom may rethink spectrum sale

1 October 08 13:14 GMT

UK regulator Ofcom may rethink its plans for the so-called digital dividend in order to bring it more in line with Europe.

The digital dividend is spectrum freed up by the swap from analogue to digital TV, which will allow for a range of new services to be introduced.

The radio waves are being fiercely fought over by broadcasters and mobile operators.

Following criticism Ofcom said that it might rethink the sell-off.


"Several respondents to Ofcom's consultation on the detailed design of the Digital Dividend's cleared award have suggested that we should make the same spectrum available across Europe particularly for mobile broadband services," read a statement from the regulator.

"We are currently considering this alongside a range of other responses which raise other complex and important issues. In our consideration we will focus on what is in the best interests of citizens and consumers," the statement continued.

It plans to confirm its next steps "later this year".

The GSM Association, the tradesbody for mobile operators, said such a rethink is crucial.

"Europe faces the challenge of harmonising spectrum. The UK went its own way and got left a little to the side," said Tom Phillips, the chief government and regulatory affairs officer for the GSM Association.

"It needs Ofcom to rethink the bands they are releasing to bring the UK in line with Europe or risk losing the things we achieved by harmonising GSM (Global System for Mobile)," he added.

Following Ofcom?

The issue rests on how the different parts of the spectrum are parcelled out, especially for the bands used to deliver mobile broadband.

"Spectrum doesn't know national borders which means there could be interference and lack of interoperability. There could be a situation where a handset that works in France doesn't work in Germany," said Matthew Howett, an analyst with research firm Ovum.

"Handset manufacturers need certainty about which bands are used for which services," he said.

Mr Howett thinks others may end up following Ofcom's lead.

"There probably is room for negotiation but it is hard to see Ofcom changing its plans too much," he said.

"Ofcom is well known for leading on these issues and the European Commission is no closer to achieving a position so it likely to have less of a say and leave it up to national regulators," he said.

The European telecoms minister Viviane Reding has thrown her hat into the mobile broadband ring, stating that if it was the choice between the "thousandth TV channel or mobile broadband" she would back mobile broadband.

Sexy spectrum

The European Commission is considering whether fast net broadband should be made universally available for all citizens.

"If they approve a universal service directive for fast broadband then mobile would be very important to achieve that," said Matthew Howett, an analyst with research firm Ovum.

Mr Phillips agrees.

"There are 100 million people in Europe who won't get fixed line broadband. Mobile is the only way they will get high speed access," he said.

Deploying fibre - which is capable of delivering high-speed broadband - will not be economically viable everywhere.

"Rural areas will need mobile broadband," said Mr Howett.

Digital broadcasting is roughly six times more efficient than analogue, meaning that about 30% of the traditional TV airwaves will be up for grabs and it is particularly sought-after because of its capacity and range.

See what is carried on our airwaves

The fact that it can penetrate deep into buildings and allow signals to travel over greater distances - cutting down on the need for base stations - has led it to be labelled as "sexy spectrum".

In Australia, telco Telstra has built a high-speed mobile broadband network that covers 99% of the population.

Its network, which runs to two million square kilometres and penetrates up to 100km offshore and down mines, offers speeds which will run to 21Mbps (megabits per second) by the end of the year.

For chief executive Sol Trujillo, using spectrum to increase mobile broadband services will be crucial to public services such as education and health.

"I believe that the issue of freeing up spectrum goes far beyond applications such as talking to each other, sending email and accessing YouTube to every sector of the economy," he said.

Crucial services

The struggling Australian telco found itself transformed when it bet on mobile broadband.

Data usage is up 44% and 500,000 have signed up for the service.

But it is also transforming the delivery of medical and educational services.

In the state of Victoria, high-speed mobile broadband is being used to speed up and cut the costs of breast examinations.

"Mobile trucks go around the communities. Results are sent via the network and analysed there and then. A process which used to take four to five days now takes four to five minutes," said Mr Trujillo.

For children in remote parts of Australia, high speed mobile broadband is opening up a whole new world.

"Many have never been to the Great Barrier Reef but now they can be taken on a field trip there via broadband," said Mr Trujillo.

In the UK, Ofcom is well aware of the benefits of using spectrum to offer public services.

In May, it published a report outlining how wireless broadband could be used to monitor a range of medical conditions, as well as provide a crucial link between hospitals and the scene of accidents and ease traffic congestion with sensors built into cars.

The spectrum sell-off will be the biggest since 3G was auctioned and is likely to significantly boost government coffers.

In the US, the Federal Communications Commission sold off its equivalent digital dividend spectrum for $19.5bn (£11bn) earlier this year.

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