Choice, competition, innovation: Delivering the benefits of the Digital Dividend

Ofcom has announced how the radio spectrum that will be freed-up through digital television switchover will be awarded for new uses for the benefit of citizens and consumers in the UK.

Spectrum is a finite resource that is the essential ingredient for all wireless communications. Demand for spectrum is growing continually with changes in technology and consumer trends. Spectrum is used throughout the economy and society, from the emergency services and defence, to radio and television broadcasting, and mobile phones and wireless internet, and underpins 3 per cent of the UK’s GDP.
The digital dividend spectrum is in the sought-after UHF band currently used by the terrestrial television broadcasters. Transmissions in this band cover large geographical areas with relatively few transmitters, and penetrate buildings well. This makes the digital dividend the highest quality spectrum likely to be released in the UK in the next 10 or 20 years

The digital dividend is suitable for a wide range of uses including:

– ultra-fast wireless broadband services;

– mobile television;

– more digital terrestrial television channels in either standard or high-definition;

– local television;

– wireless microphones; and

– low-power applications developed from wi-fi.

Ofcom’s objective is to ensure that the digital dividend is used to deliver the maximum benefit for citizens and consumers in the UK.

Following consultation and an extensive programme of research, Ofcom has concluded that the most effective way to maximise the value to society is to take a market-led approach, giving users the freedom to decide how spectrum is used and clear incentives to use it efficiently.

This approach, say Ofcom, will create the maximum flexibility for different services. It will also allow the use of the spectrum to change over time, as demand develops, technology evolves and new services become available.

The regulator adds that this approach of awarding spectrum to those who will make the most of it and value it most will deliver significant benefits to society, including:
innovative technologies and services that will be launched using the digital dividend;
more competition in wireless services which could lead to greater choice and lower prices; and a significant contribution to the UK, as the overall benefit from the use of the digital dividend is estimated to be £5bn to £10bn of added benefit to the economy over 20 years.

To maximise these benefits, Ofcom plans to auction most of the digital dividend in 2009, offering licences that allow users to decide the technology and service, and that can be traded after award.