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19|06|07

Bringing broadcasters in line with other spectrum users after digital switchover

Ofcom today announced new measures to provide clear incentives for the efficient use of the radio spectrum used by terrestrial television and radio broadcasters.

To be introduced in 2014, digital terrestrial radio and television broadcasters will be required to pay an annual fee – known as Administered Incentive Pricing (AIP) – that reflects the amount of spectrum they use.

The application of AIP is one way to encourage spectrum users to make efficient use of their frequencies, or to release the spectrum to others who can make better use of it. The introduction of AIP for spectrum used for terrestrial broadcasting will bring television and radio in line with other spectrum users. For example, the Ministry of Defence, mobile phone operators, and the emergency services all pay AIP or an equivalent charge.

Specifically, AIP will be levied on:

• digital terrestrial television broadcasting (multiplex operators: BBC, ITV & Channel 4, SDN and National Grid Wireless);
• digital national radio broadcasting (national multiplex operators: Digital One, the BBC and the winner of the new national DAB multiplex, to be announced next month); and
• digital local radio broadcasting (10 current multiplex operators, plus any new future local DAB multiplex operators).

In addition, the BBC will be required to pay for the spectrum it uses for analogue radio on the same basis as commercial broadcasters from 2008. Commercial broadcasters already pay a charge equivalent to AIP.

Valuable spectrum

Spectrum is a valuable and finite resource; its use contributes approximately 3 per cent to the UK GDP. The most valuable spectrum is below 1 GHz, where the frequencies combine the characteristics of coverage and capacity that make it particularly suitable for a wide range of applications. Terrestrial television and radio broadcasting currently uses around 40 per cent of the spectrum below 1 GHz.

Spectrum fees and broadcasting output

Ofcom will publish a further consultation later this year on details of the fees to be applied to the BBC’s analogue radio spectrum. Ofcom will also consult on the details of the fees to be applied to digital terrestrial television and radio broadcasting from 2014 nearer the time of introduction.

Ofcom does not expect the charges to be large in comparison to the broadcasters’ other costs. These proposals will also be considered within the broader context of securing high quality public service broadcasting for the digital age.

Ed Richards, Chief Executive of Ofcom, said: “Radio spectrum is a vital national asset. It underpins all modern communications and demand is increasing all the time. As innovation develops and more commercial or public uses are identified, it is essential that we encourage all spectrum users to make the most efficient possible use of this scarce resource.”

Ends.

NOTES FOR EDITORS AND CSEs

In his Independent Review of Radio Spectrum Management, published in 2002, Professor Martin Cave recommended that AIP be applied to spectrum used for terrestrial broadcasting. In its response to the Review the Government endorsed this recommendation.

Today’s statement follows an Ofcom consultation, published in July 2006, on proposals to introduce AIP for spectrum used for terrestrial broadcasting.

Ofcom will publish a consultation on proposals to introduce AIP for spectrum used by the civil aviation and maritime sectors later this year.

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