Digital dividend is a once in a lifetime opportunity for Europe’s economy, says Reding

1 Oct 2008

If Ireland leads by example in the debate for digital dividend and wireless spectrum in Europe, fast decision-making could enable the country to transform swiftly into the Celtic Tiger of wireless Europe.

Speaking at a ComReg (the Commission for Communications Regulation) conference on digital dividend, and addressing the correct way to go about ensuring that Europe capitalises on opportunities wireless spectrum could bring socially and economically, Reding said that with the US set to switch off analogue in February, and with Ireland and the UK to do the same simultaneously next year, there is little time to waste.

“Let us look at the potential gains. From an industrial perspective, wireless is already a big deal in Europe’s economy. ComReg’s recent Spectrum Management Strategy Statement 2008-2010 points this out very clearly. For Ireland, spectrum-related services accounted for nearly 2pc of GDP in 2006, mostly from mobile services (€1.4bn) but also broadcasting (€ 0.3bn). This is just the start.

“The social and economic impact of the dividend could be huge. Study after study points towards economic benefits of billions of euros a year. I don’t need to remind you that this is something we need as we coast towards a significant slowdown of growth in the EU.

Remember also that the mobile telecoms industry is a big money-spinner for Europe. We in Europe set the global standard with GSM. We have the world’s leading mobile telecoms manufacturers generating billions of euros and millions of jobs. Europe is also leading the world in mobile use. Wireless services are rising 10pc per year, and by 2010 will have surpassed fixed networks to achieve 55pc of worldwide telecoms revenues.”

According to Reding, the lines are blurring with equalisation between fixed and wireless services on the increase. “This provides us with a remarkable competition conclusion: as wireless broadband speeds start to match wired broadband, we will have a second infrastructure capable of competing with the traditional telco incumbent.

“Imagine if we could move from today’s situation in Europe, where only about 20pc of the market has a real alternative infrastructure, to a future where 80pc or more of Europeans have a choice. This would mean more competition, permit lighter regulation and would spur the fixed-network operators to move to next-generation access so as to differentiate themselves from the threat of the mobile competitors.”

She said the time to act to exploit the opportunity of digital dividend is now, and the gains are not just economic. “There are also many applications that will be crucial for public services. I give you an example: public safety services (such as fire or ambulance or flood prevention) are very often using fragmented bandwidths and old analogue technologies. They rarely have the bandwidth they need to set up mobile broadband services for teams facing natural disasters or terrorist threats.

Reding observed that Ireland is well-placed to exploit the digital dividend opportunity because, as an island, it faces fewer problems of interference.

As well as boosting broadband opportunities, the advantages of wireless spectrum to the future of broadcasting are obvious: “Broadcasting must get an important share of the digital dividend so that it can develop new services, in particular high-definition TV and also interactive services and mobile TV. But it is also clear that we need to reserve a large share of the dividend for other public-interest services, and for stimulating economic growth.

“This is certainly not the time to delay. Outside Europe, things are moving ahead. The success of the recent auctions in the US of the 700MHz bands shows the demand for spectrum. In Japan, 60MHz of UHF spectrum have already been earmarked for re-allocation, and an additional 70MHz of VHF spectrum are under discussion. These bold steps will give the countries that take them a competitive edge in launching innovative services. Europe cannot afford to stay on the sidelines.”

In Europe, Reding said the first cautious steps are being taken now. Several member states have already announced plans for the first fruits of the digital dividend. In the UK, 112MHz is being earmarked for open auctions. Sweden had earmarked 152MHz for opening up, but stepped back to re-allocate only 72MHz in the first wave. France has advanced plans similar to those in Sweden.

In Ireland, the Broadcasting Commission has assigned four national digital multiplexes, meaning that a significant spectrum bonus for other uses such as mobile TV or wireless broadband access is still open.

Overall, existing plans in member states (where there are movements) indicate the allocation of 20pc to 25pc of the UHF spectrum as an initial digital dividend. Altogether, this adds up to over 100MHz of prime spectrum for new wireless services: more than the original spectrum allocation for GSM.

To ensure rapid progress in markets about to pursue digital dividend, Reding proposed a ‘fair play’ 50:50 rule with half the dividend for the broadcasters and half the dividend for the new users, unlike the US where 75pc of the available wireless spectrum has already been snatched by broadcasters.

“Europe wants first-mover advantages. There are hundreds of wideband mobile handset models already available commercially outside Europe, compared to just a handful in the EU. This is why I call on all member states to move quickly. To realise the digital dividend, the switch-off of analogue television should take place sooner rather than later, ideally by 2010. I call in particular on Ireland to complete its transition to digital TV at the very latest by 2012.”

Reding said what is needed is a deal brokered in the European Council between all member states that would determine which frequency ranges should be set aside for the digital dividend, and what the conditions should be for selecting and using these bands. The European Parliament, she added, should be fully involved in this deal.

“Only an ambitious strategy will give us a ‘Wireless Europe’ with new services, an impetus to growth and jobs and the real possibility to achieve broadband for all Europeans at the end of this decade.

“I would like to encourage Ireland to lead by example in this debate on Europe’s digital dividend. Fast decisions on the digital dividend could enable Ireland to transform swiftly into the Celtic Tiger of the wireless Europe,” Reding concluded.

By John Kennedy

Pictured: European Commissioner for Information Society and Media, Viviane Reding

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years