1. March 2008 Spectrum policy and digital dividend Michel Azibert, deputy CEO, TDF PPE-DE hearing, Brussels, 5 March 2008

2. March 2008 2 TDF : an independent wireless infrastructure operator A natural enabler of spectrum optimization -A « specialist » of wireless terrestrial services -A neutral player across audiovisual and telecom markets -A B2B wholesaler -Independent from content providers -Sharing frequencies through shared networks

3. March 2008 3 A better usage of spectrum: pragmatic objectives What “good usage of spectrum” means to us: –Maximize the number of services –In case of scarcity of resource, rank them by social utility –Services available at the right moment –Services available at the right place –Minimize interferences –Enable international harmonisation –Enable innovation and competition  We will illustrate this “pragmatic” approach in the case of the UHF digital dividend release.

4. March 2008 4 Service neutrality vs. international harmonisation International harmonisation rather than service neutrality (as a general rule) Service harmonisation is today’s international norm (ITU) It is justified by technical reasons: efficiently sharing scarce spectrum –between very different types of users –between countries  Service neutrality, as proposed by the review, is not the right method for efficiently solving the issue of spectrum sharing between audiovisual and telecom services (digital dividend). “Zoning” between audiovisual and telecom is better.  Service neutrality creates issues with interference management across frontiers for long range propagation services (high power in lower bands). Our view: service neutrality should be the exception, not the rule.  In the orange territory, the use of UHF spectrum for broadcasting needs coordination with the neighbouring countries

5. March 2008 5 Technical neutrality vs. common European standards Common European standards (when appropriate) rather than technical neutrality Harmonisation of the licensing conditions only is a light version of harmonisation –It is necessary for some pan-European services –For domestic services, it will not forge a common market in an already fragmented European economy Technological harmonisation of standards at the European level is often justified by industrial policy objectives: –It can bring economies of scale –It can create the necessary critical mass for launching new services Examples of technological harmonisation by the European Commission –GSM (1997) –UMTS (1998) –GSM in aircrafts (2007) –DVB-H (2007) Example of a missed opportunity for harmonisation –Fixed wireless broadband in Europe

6. March 2008 6 Digital dividend (1): not a pretext to “do nothing” until we get it Step 1: build throughout Europe, before 2012 and without using (in most countries) the digital dividend, a “quadruple play” digital offer –Fixed telecom/internet broadband (DSL + wireless = 100% coverage) –Mobile telecom/internet broadband (>90% coverage) –Fixed digital television (>95% coverage) –Mobile digital television (cities with >10,000 inhabitants + highways) Necessary actions –UMTS Refarming of GSM spectrum (900 MHz) for mobile broadband in rural areas –Wimax rollout for fixed broadband in rural areas and nomadic/mobile in cities. –Harmonisation of 450 MHz for fixed and mobile broadband in rural areas –Speed up DTT roll-out in “terrestrial TV” countries or “late to start” countries –Make happen an efficient mobile TV spectrum planning (possible use of “interstitial” audiovisual spectrum during simulcast)

7. March 2008 7 Digital dividend (2): get it as soon as possible Step 2: prepare the switch-off ahead of time and make the digital dividend available immediately after switch-off. Prerequisite: quick launch and fast extension of free to air terrestrial services An absolute necessity: combine switch-off and release of digital dividend by frequency migration (no unused spectrum post switch-off, please!) A migration to the final frequency plan (“improved” Geneva 2006 plan) must be planned as soon as possible and synchronised with the switch-off ↑ Suggestions for planning the digital switch-off in France (TDF’s response to public consultation of CSA)

8. March 2008 8 Digital dividend (3): serve both audiovisual and telecom needs Step 3: address in 2012 the needs of audiovisual and telecom services for very high bandwidth services HDTV for everybody: in “terrestrial TV” countries, HDTV will be a basic need in 2012 –Growing demand for HD services among customers driven by HD TV sets penetration –A standard for all platforms Very high-speed mobile broadband in rural areas: we believe that a sub-band of 7 channels (56 MHz) in the upper UHF band can be harmonised to serve the telecom needs –7 channels make room for a shared network of 2x20 MHz duplex using the best IMT norms –It leaves room for HDTV in “terrestrial TV” countries –It is coherent with the ITU decision at WRC 07 to allow mobile services, together with broadcasting services, on up to 9 channels in the upper UHF band Example: what is feasible in France –Up to 12 DTT nationwide networks –2 mobile TV networks (> 70% population) –56 MHz for a very high bandwidth mobile network HDTV + mobile TVmobile 470 MHz806 MHz862 MHz Example of a split telecom/audiovisual 50% of TV sets will be full HD in 2011* * means 80% of TV sets used for primary reception

9. March 2008 9 Digital dividend (4): shared and open networks work better Step 4: provide the best economic model in non-dense areas Competition based on diversity of services vs. competition based on diversity of infrastructure in rural areas It is generally not profitable to roll out and operate even one fibre network for telecom or broadcasting It is generally not profitable to roll out and operate several wireless networks Profitability decreases dramatically when using “higher” spectrum that requires denser networks for the same type of service  Part of the solution lies in the roll out of shared networks. In particular, shared networks are the way forward to develop very high speed wireless internet in rural or non-dense areas (bandwidth close to fibre bandwidth in cities)

10. March 2008 10 A summary of our views 1.A full service neutrality cannot replace international harmonisation of frequencies. There is a need to split spectrum between technically and economically very different types of networks and services (e.g. broadcasting and telecom) 2.Technical neutrality should not prevent from creating common markets through the harmonisation of standards 3.The promise of a digital dividend must not be a reason to wait. Europe can roll-out today a quadruple play offer, made of fixed and mobile telecom/internet and television services 4.The digital dividend should be available as soon as possible. For this, digital terrestrial TV must be rolled out faster and the switch-off process must take care of the immediate migration towards Geneva 06 frequencies 5.The digital dividend should serve both the audiovisual and telecom needs. An harmonisation of a 7-channel sub-band for very high-speed mobile internet could be a balanced solution 6.Shared networks are a key economic feature for the development of new services in rural areas. They are a way to use spectrum more efficiently