1. Digital Dividend in the UK Graham Louth, Director of Spectrum Markets Joint Acting Head of Spectrum Policy 9 June 2009 Baltic Sea Summit on Digital Dividend

2. 1 The UKs original Digital Dividend plan 368 MHz of spectrum in UHF Bands IV and V (470-862 MHz) is currently used by analogue terrestrial television in the UK This could be carried in 40 MHz by digital terrestrial television (DTT) But the UK Government decided in 2003 to reserve 256 MHz for six DTT multiplexes, expanding the coverage and capacity of DTT after digital switchover The UKs core digital dividend is the remaining 112 MHz, available for new uses following switchover With the release of 16 MHz currently used by aeronautic radar and radioastronomy, the UKs digital dividend comes to 128 MHz 212223242526272829303132 333435363738394041424344 454647484950515253545556 575859606162636465666768 69 DTT Cleared PMSE

3. 2 What is it worth? Value to the economy very uncertain but estimated to be 6-11 billion (net present value over 20 years) –Excludes public value – also potentially significant Spectrum below 1 GHz so rarely becomes available – existing framework dates from 1961

4. 3 When is it available? Digital switchover started in 2008, finishes in 2012 No need to wait for spectrum to be cleared before new rights can be awarded, though some extra constraints on use of spectrum likely until switchover complete So new uses might start in some regions before 2012, subject to constraints Key Switchover completed by 2010 Switchover completed by 2012

5. 4 What are the potential uses? Mobile broadband More DTT (standard or high definition) Mobile television Wireless microphones and other applications for programme-making and special events (PMSE) Other low-power applications, like hubs to distribute content around the home or using ultra-wideband technologies Fixed broadband wireless applications Public protection and disaster relief Cognitive radio Community radio Digital radio Communication with medical professionals and educational institutions New services for people with disabilities Amateur and/or university use International and cross-border uses (e.g. an international public-protection channel) A nationwide broadband wireless network Digital public-service teletext to match the analogue service User-created networks (e.g. employing mesh technology) Home networks, including automation and control Business networks Community and campus networks Municipal Wi-Fi Internet-connection sharing by multiple households Industrial monitoring and automation Agricultural monitoring and automation Rural broadband provision Ubiquitous wireless networks Sensor-based networks Remote patient monitoring and healthcare

6. 5 Original plans for award Cleared spectrum –Service and technology neutral, tradable licences –Packaged in a way that enables the widest possible range of uses –Awarded by auction Interleaved spectrum –One or two 8 MHz packages suitable for local television in 25+ geographic locations –Awarded by auction –Single package of remaining interleaved and other spectrum allocated to PMSE –Award via beauty contest to a band manager required to meet reasonable demand –Other use allowed so long as PMSE obligations met –Unlicensed cognitive access –Must protect licensed users (including DTT and PMSE) from harmful interference

7. 6 Alignment with Europe – the 800MHz band

8. 7 Europe is now focusing on the larger 800 MHz band Sweden and Finland have already announced the 800 MHz band as their digital dividends France and Switzerland followed suit toward the end of 2008 Other European countries are likely to follow A potential market of almost 500 million consumers, enabling economies of scale in equipment manufacture Preliminary estimate of the incremental value of using digital dividend spectrum for wireless broadband across the EU thought to be EUR 50 – 190 billion Having played the pivotal role in Europe in making the case for a digital dividend, the UK now needs to decide whether to realign its own with those of other European countries 616263646566676869

9. Plans for 800MHz band across Europe Source: Presentation on RSPG Draft Opinion on Digital Dividend by Chair of RSPG, May 2009

10. 9 Alignment with Europe – Key impacts for UK Key positive impacts Key negative impacts Increased availability of spectrum suitable for mobile broadband use –More capacity –More potential for competition Increased harmonisation benefits from alignment with the European band plan –Lower equipment costs –Fewer restrictions on spectrum use –Easier international roaming Reduced availability of spectrum suited to broadcasting uses Reduced usability of geographic interleaved spectrum Cost and impact on viewers of moving existing DTT broadcasting Cost of moving PMSE (wireless microphone) users from channel 69 Delay to the availability of cleared spectrum

11. Significance of 800MHz band for mobile broadband 800MHz band has particularly valuable characteristics for Next Generation Mobile broadband –Lower cost of providing coverage in rural areas –Easier provision of coverage inside buildings in urban and suburban areas –Expected to become available across a large part of Europe Widespread availability of 800MHz across Europe has prompted significant shift in plans for future NGM broadband service delivery –Potential to deliver near universal mobile broadband coverage (similar coverage to todays 2G GSM networks) –A potential replacement for existing technologies rather than just a supplement to them Value of 800MHz band for mobile broadband has consequently increased significantly –Commercial value –Social value 10

12. 11 Quantification of key impacts £1bn £3bn £3.2bn Direct costs Less DTT £0.8bn Less DTT Delay Other Incremental benefit £2.4bn Low case High case Economic value = consumer + producer value £bn (20 year NPV) Extra mobile Harmonisation Delay Less DTT £2bn £3.2bn Direct costs £0.2bn Extra mobile Harmonisation Less DTT Incremental benefit £3.0bn

13. 12 Alignment with Europe – Our new plans 69 62 DTT Cleared spectrum PMSE 3050 CLEARED 6141 DTT 3050 CLEARED 6140 3839 DTT Existing band plan Proposed band plan

14. What might this all mean for UK consumers and citizens? 6 national DTT multiplexes delivering: –40+ standard-definition TV channels –4 high-definition (HD) TV channels (DVB-T2, MPEG4) Local digital TV services in ~25+ areas –e.g. licences already granted for Manchester and Cardiff 3 national coverage Next Generation Mobile (NGM) broadband networks –e.g. delivering near-universal mobile broadband services comparable to todays fixed broadband services Continued access to spectrum for Programme Making and Special Events –e.g. wireless microphones and the like Cognitive access to white spaces for ad-hoc networks –e.g. In-home multimedia distribution systems? 56MHz of other cleared spectrum suitable for a range of possible uses including: –more national, regional or local digital TV, whether SD or HD; –mobile TV; –perhaps fixed wireless broadband to cover rural and other not-spot areas; –perhaps mobile broadband for niche applications, such as the emergency services (Police, Fire and Ambulance services) 13

15. www.ofcom.org.uk/radiocomms/ddr/