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Monday, August 28, 2006

Beeb – “Give me the Digital Dividend”

I always thought that the aim of the switchover from analogue to digital TV in the UK would bring new spectrum onto the market which would be auctioned off by the UK government leading to either innovative new services or a reduction in price of existing services.

In todays Sunday Times was a lengthy article about what could happen to the new spectrum, the BBC’s position was clear:
“We believe that public-service broadcasters should have access to the spectrum they need to get their services to audiences. Charging them for that spectrum simply takes money out of services and programmes.”
There it is: 20 years of UK spectrum policy is thrown out of the window because some public sector monopoly insists that they should have as much spectrum as they think they deserve. Fortunately, the UK regulator OFCOM is currently performing a review of what should happen to the spectrum which is due to finish in Q3 2006 and they will publish the results in Q4.

However, I do not believe the BBC will accept the results and seeing they have managed to exempt themselves from regulation from OFCOM, the inevitable result will be furious lobbying to politicians and the undermining of OFCOM.

My personal position can be summarized as follows:
• There is no case for High Definition TV being a mandatory public service requirement served via digital terrestial television (DTT). It can be adequately served to interested members of the UK population via. services from Sky (satellite) or ntl (cable) distribution platforms whether as license-fee paid for BBC or more overtly commercial stations;
• OFCOM should auction the digital dividend spectrum to all and sundry without any technological constraints on the use of spectrum; and
• Public Service broadcasters such as the BBC or Channel4 should be allowed to bid for the spectrum as any private sector company, whether existing or start-up. If the BBC won and needed to increase its' tax (oops sorry – the license fee) then so be it.

In order to be perfectly clear, I think that both the following extreme scenarios are perfectly OK:
• Intel bid for and won the entire available spectrum for WIMAX deployment. Intel then built a network and licensed a couple of companies (eg BT) to provide service; and
• Qualcomm bid for and won the entire available spectrum to provide MobileTV service via its’ MediaFlo technology and not the European DVB-H standard. Qualcomm then built a network and signed up one customer, Sky, to provide service via the mobile operators and various MVNOs.

My underlying concern is that rational economic arguments are going to be ignored as the BBC will start playing emotional cards in order to get the spectrum without going to auction ie "free". If the BBC succeeds, it will only mean that more costs are hidden from the British public about the true cost of the BBC, which is exactly the BBC's strategy.