Lawmakers Wary of European Commission Move on Digital Dividend Spectrum

There are several reasons to addresss the digital dividend at the European level, said Philippe Lefebvre, EC principal administrator for radio spectrum policy. There’s no better way known for alleviating spectrum bottlenecks, he said. The EU Lisbon Strategy -- to make Europe the most knowledge-based economy by 2010 -- relies on a wireless economy that would be hampered by spectrum scarcity, he said. More than 90 percent of potential users are mass-market services relying on access to a functional internal market, he said. And setting priorities for spectrum is a political issue with EU-wide implications, LeFebvre said.

The November EC proposal calls for creation of “clusters” in which new services with similar interference profiles can co-exist, LeFebvre said. It suggested special conditions to allow more harmonized use of different types of networks or zones for identical services, he said. The EC isn’t jettisoning technology neutrality, but it does want to organize the dividend to allow gradual convergence of conditions of use and technical standards without “hard” harmonization, he said.

The proposal isn’t a “straitjacket” that will stop member countries from setting priorities in clusters, said LeFebvre. It doesn’t aim to pick winners at the EU level or to foist a top-down “market approach” on national governments, he said.

Major questions on the digital dividend are unanswered, said UK MEP Fiona Hall. There’s no consensus on how to define it, what to do about public interest services that could be lost to a more market-based approach, and how to handle interference, she said. But those issues aren’t insurmountable, she said. Hall partly backs the EC proposal for countries to cooperate on spectrum use, but fears they may be forced into binding harmonization, she said. That would be a “great shame,” she said, because such regulation could end use of frequencies while disputes are hammered out. The EU has to move forward pragmatically, she said.

UK MEP Giles Chichester suspects that digital dividend management is mostly about convenience to public authorities and raising revenue and worries that the EC proposal could delay switchover in some countries, he said. Moreover, it’s unclear who really benefits from the dividend, Chichester said. It should be seen first as a boon to consumers, who will have more viewing options and interactive TV, he said. The best way to spark innovation is to let end-users express their views in a dynamic market, he said. The EC approach seems “too proscriptive” on uses for freed-up spectrum, he said.

Chichester sees the proposal for EU-level coordination with “a certain skepticism,” preferring to see the Commission act only if it can show its plan offers significant value, he said. Too much of the proposal relies on generalized concepts such as economies of scale, he said: “The devil is probably in the details.”

Spectrum reform’s main goal is flexibility but not at all costs, said French MEP Catherine Trautmann, vice-chairman of the Industry Committee. One difficulty with the proposal is a “lack of trust” for the EC, often suspected of having a hidden agenda, she said. The point isn’t that the EC should have no powers in the matter but that “everyone has to play fair,” she said.

Without a common plan for the dividend, what is the alternative to patchwork services and products? lawmakers were asked. Whether general or individual spectrum use authorization is needed is a key element of the debate, said Trautmann. Hall and Chichester said a patchwork system can coexist with some EU-level coordination. The spectrum is being freed for new ideas, Chichester said, so why not see what develops?

A study of networks relevant for clustering is ongoing in the European Conference of Postal and Telecommunications Administrations, LeFebvre said. There will be an impact assessment on legal, regulatory, socioeconomic and technical issues, followed by opportunities for public feedback. The Council of Ministers and parliament are expected to reach agreement in June, and the EC plans to unveil its first detailed proposal for regulation of the digital dividend by the end of 2008, he said. -- Dugie Standeford

Digital Dividend Notebook…

Digital terrestrial TV will be the dominant delivery mechanism in many European countries, former European Broadcasting Union Technical Director Phil Laven said Tuesday at the Policy Tracker digital dividend conference in Brussels. However, European Commission focus on service neutrality for spectrum freed by switchover risks causing interference with DTV frequencies, and interference kills the “elegant concept of service neutrality,” said Laven, who co- chairs the DVB Project. Broadcasters question why the EC has proposed three separate bands -- for radio/TV, mobile TV and other services such as high-speed mobile data access -- segregation that blatantly contradicts service neutrality, he said. Lately the EC attitude on interference has grown more pragmatic, however, he said. The key question isn’t how much spectrum will be available to allocate but what it will be used for, said Heiko Zysk, deputy media policy and governmental affairs director for broadcaster ProSiebenSat.1 Group. Contrary to popular belief, broadcasters won’t get all digital dividend spectrum and anyone who wants to open new services in the bands should feel free to do so, he said. Broadcasters do get a “little bit angry or nervous” when politicians start talking about market mechanisms for spectrum allocation, Zysk said. Anyone keen on such a tack must balance cultural and public duties with broadcasters’ status as regular private businesses, he said. Broadcasters expect the right to claim a fair stake in the digital dividend in return for their efforts and investment in the switchover. They want UHF spectrum used by existing fixed broadcast services to remain subject to individual national management, and for the EC to recognize the need to avoid harmful interference between spectrum bands and services. The EC should recognize that the spectrum situation differs by country, acknowledge “legitimate national specificities” such as social and market needs, and lose its Brussels-based “turnkey” approach, Zysk said. European consumer group BEUC wants consumers to have access to high quality programs on diverse platforms, said Legal Officer Emilie Barrau. Spectrum must be affordable to all players, making the question one of whether it should go to those who offer services of public interest or those who can afford to pay the most. BEUC doesn’t rule out spectrum auctions but fears “speculative bubbles” whose high prices are passed on to end- users, she said. In the end, the question is who pays for switchover, Barrau said.