Appendix 2 - Programme Making and Special Events Sector

Your views on the proposals set out in this document are sought by 31 December 1999. Comments should be sent to the address below. It would be helpful if lengthy written documents could be sent via email of on disk in Word 7:

 Contact Details:

Jacqui O’Mahoney
Radiocommunications Agency,
Wyndham House,
189 Marsh Wall,
London E14 9SX

Email: jacqui.omahoney@ra.gsi.gov.uk

Fax: 020 7211 0899

The Programme Making and Special Events sector covers the specialist use of radio in a wide variety of activities including making programmes for broadcasting, making films, advertisements and videos, staging presentations and entertainment, sporting or other public events.

The Agency’s main spectrum management objectives for the sector are to:

ensure that the spectrum available for the sector is sufficient and of the appropriate quality to cater for users’ requirements, in order to maintain the UK’s competitive advantage and resultant contribution to GDP;

manage the spectrum in a way which maximises the opportunities for sharing and is flexible enough to respond to changing demands; and

encourage the development and use of more spectrally efficient equipment.

Spectrum for programme making is available to the sector in numerous bands ranging from 47 MHz to 48 GHz. Historically, broadcasting spectrum (i.e. Bands I, III, IV and V) has been heavily used wherever possible. Outside of the broadcasting bands, channels are contained in numerous relatively small blocks distributed across the spectrum. Virtually all is shared with other services on a secondary basis and much of it has other restrictions attached to its use. These restrictions reduce the value of the spectrum e.g.

most of Band III is for low power use only;
there are geographical restrictions in some bands (such as 2500 MHz, 3500 MHz and 10 GHz); and
use in Television Bands IV and V must be carefully planned to avoid interference to domestic reception.

Use of some bands will either be lost or further restricted over the next few years. New allocations will partly relieve some of the pressures caused by the loss of spectrum. But the clear message is that, if current operations are to be catered for, better use must be made of the spectrum available.

The bands which will be lost or less usable are:

Mobile Satellite Services coming into the 2400-2600 MHz band will affect five of the fifteen vision link channels in the band by 2005. A further six will be affected if, as proposed, the band is used after that date for UMTS terrestrial extension bands.
The introduction of digital television is likely to make it more difficult to use Bands IV and V for programme making
The number of channels at 69 MHz will be reduced from five to three in 2000 and none will be available after 2003.
The potential expansion of satellite television in 11.7-12.5 GHz would, at best, restrict the usefulness of this band to low power cameras.

The new allocations are:

3400-3420 MHz will be available for digital video links.
1785-1800 MHz, which is harmonised throughout CEPT, will be available for digital radio microphones.
1517-1525 MHz will be available for short term digital audio links.

There are developments in the sector that may increase the demand for spectrum - expansion of the number of broadcast channels with the introduction of digital television, a consequent growing demand for programme material, more sophisticated programme making and the wider use of programme making techniques throughout the entertainment and sporting fields.

The Agency has commissioned The Smith Group to study changes in demand for PMSE spectrum over the next ten years. Its report will be completed by November. The report will also examine how sensitive demand is to changes in fee levels. Its conclusions will have an important impact on the Agency’s consideration of changes needed to current fee levels.

The current fee structure (which was introduced in April 1997 with new licensing arrangements) reflects some key aspects of administrative pricing: the fee level for an assignment is determined by the frequency band, bandwidth, quality of assignment, coverage area and duration of use. One objective was to encourage users to look critically at their spectrum requirements, in particular broadcasters who had previously had to pay an omnibus fee rather than one based on individual assignments. The table at Annex A shows the fee structure.

The Smith Group and NERA have prepared a report for the Agency on the feasibility of introducing economic value-based pricing into a number of licensing sectors including PMSE. They found that such pricing could be used in this sector to provide users with incentives to be prudent in their spectrum use and possibly to adopt more spectrally efficient equipment.

They suggested that in setting fees it would be appropriate to apply the mobile radio spectrum tariff unit (STU) to assignments made below 1 GHz and the fixed link STU to assignments made above 1 GHz. In general this would mean setting fees by reference to the bandwidth occupied and the geographical area sterilised for use by others. The STUs are respectively £1.65 and £1.10 per MHz per square kilometre per annum.

They recognised that in this sector there were numerous factors that could affect the value of spectrum and hence modify the simple application of STUs in setting fees. These included the availability of the relevant bands to other services, the intensity of demand and the duration and exclusivity of assignments.

They also recognised that in the sector there were a number of complicating factors to the defining of value-based prices. There is a large range of licence products, spectrum may be used infrequently and for short periods and spectrum is heavily shared. Because of these and other administrative complications to the implementation of a revised pricing structure they suggested that the Agency consult further following publication of its study of the demand for PMSE spectrum, which is due for completion by November.

The Smith Group/NERA report gives a number of indicators of value-based prices. These are based on a straightforward application of STUs prior to any adjustment necessitated by such complicating factors as the report cites:

Fixed site radio microphone – the fee for a single channel of 200 kHz would be £1 and for a multichannel block £41, compared with current fees of £20 and £80 respectively.
General use radio microphones – the fee for a regional newsgathering channel of 200 kHz would be £8,397, compared with £240 at present.
Audio links – the fee for a 12.5 kHz regional newsgathering channel would be £524, compared with £180 at present.
Video links – the fee for a 20 MHz regional newsgathering channel would be around £559,812 compared with the current £2,400.

Occasional use and Season Ticket assignments

The report does not give examples of short term fees but suggests that, as a general principle they should be set at a level that would allow the full economic value of a channel to be recovered from all the assignments made during a year. One way in which this might work in the 450-470 MHz band, for example, is as follows. There are 3.6 MHz available for programme making in the band. Assuming channels might be used anywhere within the UK (though there are, in fact, some restrictions on use) this spectrum would be valued at £1.4 million. There are annually about 20,000 short term assignments in the band (both Occasional use and Season Ticket). On the basis suggested by Smith/NERA, each would cost £70, which compares with the current fee of £6. (The income from newsgathering channels would need to be deducted from the total to be collected but would make little difference to the cost of a short term assignment.) A similar calculation for short term vision link channels in the 2390-2690 MHz band would produce a fee of about £7,000, compared with the current £80.

Fees based on the straightforward application of STUs are obviously significantly different from those charged at present – and in some cases higher by a factor of ten or more. The Agency will need to consider carefully whether the application of STUs needs to be modified to reflect more closely spectrum values. There are two main aspects to this. One is the potential value of the spectrum to other services, bearing in mind the great variety of bands currently available. The other is the level of fees necessary to achieve the Agency’s main spectrum management objectives for the sector.

We describe above the restrictions that apply to much of the spectrum for programme making. When the allocations were made it was considered that, in contrast with other services, programme making could operate within the restrictions. This was deemed to be possible because programme making largely involves either low power equipment (e.g. radio microphones) or transient operations (e.g. at outside broadcast locations). In addition, management of the spectrum had been (and still is) in the hands of accountable organisations employing sophisticated planning tools, which allows use of spectrum which might otherwise lie dormant. The problems vary between bands and the potential value of each to other users will need to be assessed individually.

The programme making sector is peculiar in that the majority of assignments are for very short duration – usually only a matter of days. In setting fees for the sector it may not be appropriate to strictly apply STUs that are based on annual use. Much programme making is also geographically confined, either to specific outdoor locations (such as football grounds) or inside buildings (such as theatres or studios). This raises questions about the area that might be sterilised by individual assignments and consequently about the application of STUs. These will be important considerations in pricing the variety of assignments that are needed to meet programme makers’ requirements.

Another factor is the relative lack of security that programme makers have. Programme making is not recognised as a distinct radio service within the UK and is not one of the ITU service definitions listed in Article 1 of the Radio Regulations. This means that there are no internationally agreed allocations that would afford programme makers long term security. Some important bands are to be lost over the next two-ten years. This necessarily reduces their value because it entails users re-planning their requirements, either moving to other bands or to other modes of operation.

Independently of changes to fee levels, there are a number of possible changes to the fee structure that could help meet the Agency’s spectrum management objectives:

Refine fee bands so that each one reflected common usage or particular characteristics. This would allow more refinement in managing supply and demand through spectrum pricing.

Modify differentials between bands to reflect the intensity of their usage and encourage movement to less intensively used bands.

Reduce the basic fee unit in the microwave bands from 5 MHz to 1 MHz. This would allow more refined charging: the 5 MHz unit is inappropriate to digital video links, which may have bandwidths as low as 7 MHz.

Relate fees in the microwave bands to applications as a way of encouraging movement into the appropriate bands - e.g. point-to-point links from 2390-2690 MHz to higher bands and the remaining part of the band after the year 2005 being used for mobile applications only.

Modify Request channel assignments. At present such assignments allow unlimited use of a channel for short term operations, but only at one location at a time. A limit of, say, 60 occasions on which a request assignment might be used would help ensure that users looked more critically at their requirements. To give users more flexibility an assignment might be used concurrently at different locations (each simultaneous use counting against the total of 60). All uses require prior authorisation from JFMG and once given each authorisation would count against the total. This would apply where the user wished to cancel his request after authorisation had been given.

Introduce surcharge for airborne assignments. Transmissions from aircraft sterilise a much wider area than ground-based assignments. To reflect this the fee for airborne assignments might be double that for the corresponding ground-based assignments.

Dispense with multichannel assignments for radio microphones. These assignments involve administrative restraints, where, for example, users wish to straddle television channels. To simplify and clarify procedures assignments might be made only of single radio microphone channels.

Increase charges for events where demand for spectrum is particularly intensive. Exceptionally large events, involving many users with large requirements, are difficult to manage - both administratively and in spectrum management terms. The charging mechanism might be used as a rationing tool. Higher fees would also reflect the relatively higher cost of administering such events. There are, however, practical problems in defining such events in the Fee Regulations and it may be necessary to identify specific events. The Formula One Motor Racing Grand Prix is a prime candidate. The Agency would welcome views on whether pricing could make the event more easily manageable.

 

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Appendix 3