Switch-off will occur in stages between 2008 and 2012, releasing
a huge amount of very valuable spectrum useful to broadcasters,
mobile phone companies and users of wireless sound and data
services.
Ofcom has outlined its proposals for how the large pieces of
spectrum to be released by analogue switch-off will be used. Almost
all of it will be auctioned on the open market in a similar way to
3G spectrum in 2000.
Then the public purse gained from dot-com fever as telcos
participated in a frenzied auction that drove the total paid to
£22.5 billion. That sum is not thought likely to be raised again:
Ofcom says that the spectrum in hand will create £5 billion to £10
billion of economic value over 20 years, so prices paid will be a
fraction of that.
A portion, though, may be held back for services which do not
yet exist. "Ofcom is consulting on whether to hold back a small
amount of spectrum until after digital switchover to ensure that
potential new developments in technology in the future – such as
new low-power wireless uses – have access to UHF (ultra high
frequency) spectrum," said an Ofcom statement.
As more and more services become wireless, spectrum is likely
only to become more valuable. Ofcom has said that it will auction
the spectrum and that it will sanction an after-market in traded
spectrum. "Licences would be tradeable and liberalised to allow
users the flexibility to decide what technology to use, what
services to offer, and to change their use of the spectrum over
time," said Ofcom.
Ofcom says that it will not allocate spectrum by deciding what
is the most appropriate use. "To do so would distort incentives,"
said Ofcom, "and assumes that the regulator can make better
decisions than the market, when in reality there is significant
uncertainty and information is limited."
Ofcom said it would make some exceptions, reserving some
spectrum for specific uses. One of these is local television, and
it said it wants to divide a part of spectrum into 40 geographical
segments to allow for separate broadcasts to 40 regions of the
UK.
Consultation on Ofcom's spectrum proposals is now open.
