Ofcom To Provide Solomon Judgement On HD Frequency Spectrum

One of the challenges facing Stephen Carter’s replacement as head of the UK communications regulator Ofcom, is how the frequency spectrum released by the move to digital terrestrial TV will be allocated. Not only is the decision crucial for Ofcom, who must reconcile both the requirement to allow the market to operate while taking into account the British citizen, but it also figures in the BBC’s strategy around the impending licence settlement and the organisations’ worldwide ambitions.

Although the World Cup has not been the High Definition eruption many in the electronics retailing sector had hoped for, there is now a realisation in the industry; that the move to adoption of flat screen TV displays has started in the homes of Great Britain.

How will displays receive the content to create the impetus for a large scale take up? The likely options are; Cable under what is expected to be a Virgin branded offering; Sky who are pushing HD to protect and grow their revenue; the BBC who are committed to both an alternative to Sky on Satellite and providing their content on all viable platforms and broadband, which looks increasingly viable by virtue of higher transfer rates to the home, along with improved digital compression technologies.

The issue for Ofcom is, should the frequency spectrum vacated by analogue TV go to the highest bidder (which on past experience looks likely to be mobile communications of some sort), or should it propel TV into the HD age with the potential benefit for the UK’s important media industries?

France, slower off the blocks in moving to a Digital Terrestrial TV service, with its’ amusingly acronym-ed TNT, has a solution that builds in HD capabilities, and for sure the UK will not wish to be seen falling behind mainland Europe.

And where does the BBC anguish become an issue? Well, if the only methods of receiving HD are by commercial operators Sky and Cable, how does the BBC reconcile the cost to all viewers when only a subset can receive it? The BBC is terrified of losing arguments that could justify a decrease of its universal fee, or marginalisation of its place as a leader in the deployment of advanced distribution and production technology. They’re actively lobbying to make sure that new frequency plans allow for both mobile TV and HD terrestrial.

Given all this, it looks like Stephen Carter could be showing admirable timing skills in vacating the OFCOM hot seat.

CEO Carter To Leave Ofcom: UPDATED

Carter To Leave OfcomThis just in, Steven Carter, Chief Executive Officer of UK communication uber-regulator Ofcom will be standing down with effect from 15 October 2006.

Luke Gibbs of OfcomWatch covered Carter possible departure this back in January this year.

At the time of writing this article, Ofcom hasn’t given an official explanation of why Carter is leaving, just that he is.

As to the process of him leaving, the official Ofcom line is a little bewildering, “He will continue to lead on all operational and financial matters until that date (15 October 2006), but from 1 August 2006 will not be party to Ofcom’s economic, competition and policy decisions.”

What’s special about 1 Aug 2006? Given Carter’s contract prevents him from securing future employment whilst at Ofcom, is this perhaps someway for him to hasten taking up another role with another organisation? Carter’s contract also contains “appropriate gardening leave restrictions” up to a maximum of 12 months at the discretion of the Chairman.

Carter To Leave OfcomThe next role for Carter has been the matter of some conjecture, nay gossip. Given Ofcom is seen by a lot of the world as a leader in communications regulation, there are many possible roles. Amoung those mentioned so far have been BSkyB, and with James Murdoch rumoured to be shifting upstairs the position may be open. Hey … how about the FCC?

From 1 August, David Currie will act as Executive Chairman and will chair the Policy Executive, until a permanent replacement can be found.

Prior to joining Ofcom in 2003, Carter was at UK cable company NTL during its time of financial troubles.

More details on the story when we have them.

OfcomWatch
Ofcom

Ofcom GSM Guard Bands License Awards Explained

Ofcom Awards Licenses For The GSM Guard BandsThe frequencies 1781.7-1785MHz paired with 1876.7-1880MHz known as the GSM Guard bands have been made available to 12 licensees under the Wireless Telegraphy Act. They are national UK licenses, though the operators of the licenses will have to cooperate amongst themselves so that interference between themselves doesn’t occur. Ofcom expect the licensees to form an industry body that will self-regulate. Operators will also be required to register all radio equipment in the “Sitefinder” database (currently populated by the GSM and 3G operators).

Even though the licenses are only low power (sub 200mW compared to 10’s of Watts for traditional GSM systems), they are suitable for services such as in-building GSM, local area GSM (such as in a theme-park) or other constrained areas. There are 15 GSM channels available, each one being able to carry 8 voice calls i.e. 120 voice calls in total. Having a reasonable number of channels will allow multiple operators to co-exist in an area and also allow single operators to cover larger areas (in such a way that multiple GSM basestations won’t interfere with each other).

Though it is expected the main use will be low power GSM, Ofcom have not specified what the licenses should be used for and as such, can be utilised for any service, such as localised wireless broadband, as long as the GSM spectral masks are adhered to (which will ensure interference doesn’t occur with the existing GSM operators).

Ofcom Awards Licenses For The GSM Guard BandsWinning Licensees
The 12 companies winning licenses and the prices they paid were: – (note all bids in GB pounds £)

British Telecommunications PLC 275,112
Cable & Wireless UK ( England) 51,002
COLT Mobile Telecommunications Ltd 1,513,218
Cyberpress Ltd 151,999
FMS Solutions Ltd 113,000
Mapesbury Communications Ltd 76,660
O2 ( UK) Ltd 209,888
Opal Telecom Ltd 155,555
PLDT ( UK) Ltd 88,889
Shyam Telecom UK Ltd 101,011
Spring Mobil AB 50,110
Teleware PLC 1,001,880

Ofcom published the complete matrix of bids as the award was for between 7 and 12 licenses. It was a close thing at 8 licenses as a few bidders put in high entries for low numbers of licenses and dropped the amount as the license numbers increased.

Ofcom arranged the auction in a sealed bid process in a “what you bid is what you pay” arrangement, which lead to the lowest price paid as £50,110 by Spring Mobil and the highest £1,513,218 by COLT (30x as much). Some have argued that the highest bidders paid over the odds, but they are putting a good spin on it saying that it’s in-line with their mobile strategy. The total amount of the licence fees paid was £3.8million, not bad for Ofcom’s first spectrum auction.

Of course, compared to the license fees paid for 3G spectrum (around £6bn per license) it’s peanuts.

A license, but what to do with it?
Having a license is all very well, but now licensees must be wondering what they’ve got themselves into. Just because they can run a GSM service doesn’t mean anyone will use it, in fact it may well be difficult to get people onto your network.

It’s extremely unlikely the existing mobile operators are going to want to have anything to do with these new upstarts, they’ve invested millions (err, billions) to get to where they are today. The last thing they want is new entrants poaching customers or moving users off their networks when they move into, say, an office environment. They especially don’t want their customers doing it with equipment (i.e. handsets) that they’ve heavily subsidised.

Unfortunately, what this means is that the new players are going to have to issue new SIMs (Subscriber Identity Modules) and they won’t work on existing GSM networks, or users will manually have to select the new network when they’re in range. This makes it all very difficult, and users won’t bother if it’s hard.

Ofcom Awards Licenses For The GSM Guard BandsNew entrants could enter into roaming agreements with the current operators, but unless Ofcom mandates this (which is unlikely) there’s likely to be strong opposition. Since some of the license winners already have GSM networks, they can offer localised services knowing there’s no interference problems with existing infrastructure.

Deals with foreign GSM operators?
One way ahead is for a licensee to make an agreement with a foreign operator and the localised network just becomes an extension of their foreign network, but then when users roam on to the network they’ll be subject to roaming charges which, as both Ofcom and the EU Government know too well, can mean very high charges for the end-user. If roaming charges do decline then this may well be a way forward.

There’s also a big potential opportunity for the Channel Islands GSM networks here, as they abide by UK numbering plans, so though they are considered “foreign”, their numbers look like UK numbers, including mobile ranges. They could offer roaming agreements and even offer SIMs which would still look like UK numbers.

So the future’s bright, but it will be an interesting few years to see if any of the new entrants can really pull anything off.

Unlocking the Digital Dividend – Policy Tracker Event

Unlocking the Digital Dividend - Policy Tracker eventIf you thought the switchover to digital television was going to be a challenge, spare a thought for the regulators, policy makers and engineers who are already tasked with trying to figure out the best way of re-allocating the spectrum freed up by switching off the analogue broadcasting signal.

There are a multitude of possible new uses for the spectrum released by switchover, including re-allocating (or re-gifting) it back to the very broadcasters who previously used it in order for them to deliver HD and other services.

Mobile providers are also launching a campaign to ensure an allocation for mobile TV over DVB-H, or extending 3G and rolling out mobile broadband services. Some countries may even look to allocate the spectrum to defence and/or emergency service uses. Or it could well be a mix of all of the above – although the resource is finite – hence the issue.

It was this re-allocation process that provided the focus for an event run today by Policy Tracker. Unfortunately, I was only able to attend the first couple of sessions – but the roster of speakers for the day looked very strong indeed. I hope that Policy Tracker will look to do more events, if they are of this calibre.

Unlocking the Digital Dividend - Policy Tracker eventThe first two sessions focused mainly on the problems associated with harmonisation. It is essential that adjoining states will have to work together to allocate spectrum, if there are not to be interference issues. The ITU’s Regional Radiocommunication Conference (RRC-06) which will be held in Geneva between May 15 and June 16, aims to provide the necessary regulatory framework for national regulators such as Ofcom as they look to re-allocate. This framework will not limit or determine the re-allocation but ensure licence holders meet certain requirements to ensure harmonious use – enforced by national regulators.

It was interesting to note that London’s geographical location – and possible interference in parts of France and Holland – will mean that any allocation for DVB-H services will effectively have to wait until 2012. Ofcom have already stated this – but pressure will surely start to mount when other European cities (where there are no associated interference issues) will start rolling out DVB-H mobile TV starting in 2007.

Interesting comments from Roberto Ercole of the GSM Association, who said that mobile providers were currently unsure about how the reallocation process would work. He said that the industry faced three key issues – regulatory uncertainty, not knowing whether mobile TV would come under the same regulations as broadcasting, and the possible fragmentation of markets due to allocations differing across regions.

Unlocking the Digital Dividend - Policy Tracker eventOf course regulatory uncertainty is same for all those looking to unlock the digital dividend (although some argue that the broadcasters are well positioned because they already sit on the spectrum). Whatever happens its going to be a complex and highly political interplay between policy makers, regulators and transnational organisations such as the ITU.

There is a very difficult balance to strike, ensuring that there is enough incentive for potential users to keep investing and developing technologies whilst also ensuring that the released spectrum will be used in the most productive and efficient manner.

A particularly pertinent question from one delegate – that didn’t get an answer – what is that citizen/consumers will get from the re-allocation? Afterall it is citizen/consumers who are effectively having to pay to release the spectrum. Ofcom’s initial proposals on the issue suggest that this is a question that they will look to answer – so we’ll wait and see.

Consumer Voice: UK Proposed Super-Consumer BodyLuke Gibbs is a co-founder of OfcomWatch

Ofcom: Is the Internet Killing the TV Star?

Ofcom: Is the Internet Killing the TV Star?Big glasses-toting Buggles sang about ‘Video Killing The Radio Star’ back in 1979, but new figures from Ofcom suggest that the while Internet may not exactly be killing TV, it’s certainly giving it a bit of a duffing behind the bike sheds.

The research reveals that ‘TV reach’ (defined as a minimum of 15 minutes of consecutive TV viewing in a week) declined between December 2003 and December 2005, with the biggest fall amongst young people.

Over the two years, TV reach fell by 2.9% for 16-24 year-olds and continued to decline by 2.2% over 2005, with reach falling by 1.9% among 25-34 year-olds.

Ofcom: Is the Internet Killing the TV Star?Industry pundits are collaring the Internet as the reason for this decline, along with DVDs and gaming.

ITV1 slumped the most in multi-channel homes (i.e. homes with terrestrial and other channels), falling by 3.6% during 2005, while BBC2 managed to be the only terrestrial channel to increase its reach in multi-channel homes, rising 1.6%.

BBC channels hogged the TV action in multi-channel homes, snaffling 30.8% of the audience, way ahead of ITV at 22.6% and Channel 4 at 8.6%.

Digital growth
Digital TV is now accessible to two thirds of UK households, with 6.5 million viewers potentially launching a coastguard boat every time they turn on their sets.

Ofcom: Is the Internet Killing the TV Star?Consumer broadband continues its exponential growth, exploding from zero to 10 million connections in just over seven years, with some 70,000 new connections being added per week.

Digital radio remains a boom industry, with sales of DAB radios passing two million in the third quarter of 2005, and pushed on by a busy Christmas, hitting 2.7 million by the end of the year.

Ofcom report

Ofcom VoIP Consultation Announced For UK

Ofcom VoIP Consultation Announced For UKOfcom has just announced another consultation on Voice over IP (VoIP) use in the UK as a follow up to their last, which they called New Voice Services: A consultation and interim guidance, and released on 6 September 2004.

We feel this is sufficiently important to instantly flag up, so now only cover the key points. More details will follow.

Ofcom estimate is that there’s around 500,000 VoIP users in the UK, we can only assume that this is both software (Skype, gTalk, etc) and hardware (Vonage, etc). Sounds low to us and at the time of writing, Ofcom hasn’t responded to our request for clarification.

Subjects for discussion/debate –

The obvious of 999 emergency service comes up, but the use of language is pretty interesting. Ofcom say they want to ‘increase the incentive for VoIP services to offer 999 access,’ so potentially no insistence. VoIP providers will love this, as they’ve tripped up in other countries with this.

The scope _does_ appear to cover number portability which is good for the consumer.

As yet unclear, but in our view important. Will there be a move to enforce interoperability between different providers of the service? It would be very pro-consumer, but would put the noses-out-of-joint for quite a few VoIP providers, especially Skype.

Any comments in response have to be with Ofcom by 3.May.06. They’re not going to rush themselves in making their views on the process know in a big rush, they plan to make a statement in August 2006.

Ofcom – Consultation Documents on Regulation of VoIP Services

Mayday! Mayday! UK Digital TV Boxes In Trouble Again

Mayday! Mayday! Digital TV Boxes In Trouble AgainFor the second time in a fortnight, coastguards have been scrambled after a digital TV box sent out a signal on a wavelength used by ships in distress.

Mrs Donaldson, a 67 year old pensioner in Plymouth, Devon, came back from an evening at the cinema to find investigators waiting outside her door, “holding a massive antenna.”

After picking up the ‘distress’ signal from Mrs Donaldson’s Freeview box, two lifeboats and a police launch spent a fruitless three hours searching 20 miles of coastline looking for what they believed to be a mystery vessel in trouble.

Two weeks previously, a faulty TV digital box in Portsmouth resulted in a coastguard helicopter from RAF Kinloss being scrambled for a two hour search of the harbour area before the signal was traced to a household inland.

RAF spokesman Michael Mulford confirmed that the Aeronautical Rescue Co-ordination Centre at Kinloss had detected the beacon – transmitting on the major emergency frequency – from one of five orbiting satellites.

Once the RAF had established that the source wasn’t coming from a nearby vessel or missing plane, they contacted Ofcom who were able to track the signal down to a household.

At the time, an Ofcom spokesman was reported as saying that the signal was a “real one-off”, adding that “digital boxes only receive signals.” When we spoke to Ofcom today, they claimed to have said it was ‘probably’ a one-off.

Beacons not boxes
The frequency used by the digital Freeview set-top box (officially called the Civil Distress Frequency) exactly matched the one reserved for emergency distress beacons.

These beacons are carried by ships, yachts and aircraft, and when they come into contact with water, automatically broadcast a signal that identifies the vessel and its location.

Will the digi-TV rollout be scuppered?
With Digital TV boxes being responsible for two major incidents in just two weeks, some serious issues are being raised for the proposed roll out of digital TV in the UK.

Ofcom officials told us that they think that only two boxes failing out of the ten million Freeview boxes already sold isn’t much of a problem.

But with the cost of the two wasted rescue operations exceeding what has been reported as £20,000, lifeboat crews have warned that such rogue signals could cost lives in the future.

Mayday! Mayday! Digital TV Boxes In Trouble AgainAn Ofcom spokesman explained that the faulty boxes are now being examined for malfunctioning components, adding: “Apparently any device capable of receiving a signal can also send a signal if it malfunctions. To the best of our knowledge these are the only two out of millions of Freeview users in the UK to have experienced this problem.”

Confusingly they said that they hoped to have the results of the tests in a ‘couple of weeks,’ but might not make the findings public. They refused to be drawn on who made the Distressing digi-box, or indeed if both boxes were made by the same company. They also wouldn’t reveal the price range of the offending box.

Meanwhile, it looks like they’ll be no shiny digital future for Mrs Donaldson who has said that she won’t be getting a replacement box as she would “hate to cause more bother”. Bless.

Steps To Understand Where Tory Thinking is on TMT

Yesterday piece raised the questions of where the Conservatives thinking may be on UK Telecoms, Media, and Technology (TMT) sector. Today we outline how we intend to find out more.

Steps To Understand Where Tory Thinking is on TMTSo where do we start?

Well, initially we hope to meet with and interview Hugo Swire, MP (Shadow Secretary of State for Culture, Media and Sport) and John Whittingdale, MP (Chairman – Media, Culture and Sport Select Committee). Both will be important figures in developing coherent, cohesive and workable policies for the party in this area and we hope interviewing them will provide us insight as to the likely direction of travel on some of the main issues.

There are also a number of other bodies within the party looking at issues impacting the TMT sector – such as the Conservative Technology Forum – and we hope they may also meet with us to outline their current position and work on these issues.

There are a range of immediate issues where we think the U.K. can benefit from the Conservative’s input:

  • (i) copyright policy;
  • (ii) radio spectrum management;
  • (iii) the regulation of new media;
  • (iv) digital switchover;
  • and (v) the regulatory environment, in particular, the future of Ofcom.

Do the Conservatives have something different to say on these and possibly other equally-important issues? We want to uncover areas of contention and, alternatively, areas of consensus. Ultimately we want to highlight the importance of this policy area, and ensure that it is at the forefront of the party’s offering in the future – after all, technology is the future.

Steps To Understand Where Tory Thinking is on TMTNaturally, there will always be those who say regulatory decisions made by organisations such as Ofcom are ‘independent’ and ‘evidence-based’ and therefore would be valid whoever happened to be in government. However, most people know Ofcom is ultimately a product of the government who created its remit – New Labour – and who on occasion have allowed the notion of ‘evidence-based’ regulation to underpin a culture of third party ‘experts’ who decide policy matters with a minimum of public participation or scrutiny.

Of course, any ‘evidence’ rarely, if ever, just points to one policy outcome. Regulation is always discretionary – it needs to be in order to be flexible enough to be applied coherently – but accordingly it is also always political.

It won’t have escaped anyone’s attention that senior appointments at Ofcom are made by or approved by the Secretary of State – is this what is meant by ‘non-political’? Surely very few people are really convinced by the notion of regulatory independence. Political context defines any regulatory outcome to an extent.

Steps To Understand Where Tory Thinking is on TMTWe should note at the outset that we certainly don’t already have answers as to what the Conservatives should be doing in this area. However, we do believe it would be beneficial for everyone if they engage in these issues and push them to the fore. We hope that this challenge will be of as much interest to the Conservative Party as it is to us.

We will keep you posted as to how we get on.

Luke Gibbs and Russ Taylor are founders OfcomWatch

What Are The Conservatives TMT Sector Policies?

What Are The Tories UK TMT Sector Policies?If you were to consider UK telecoms, media, and technology (TMT) policy since Parliament passed the Communications Act 2003 and brought about the formation of Ofcom much has happened. The regulatory machinery of the state has swung into action with relative efficiency, taking on such issues as BT’s marketplace position, digital switchover, and public subsidy and control of broadcasting and new media. And we are starting – just starting – to see the results of some those efforts.

But up until now, it is fair to say that the Conservative Party have basically ceded influence over the TMT policy arena to New Labour – not least because Labour has been the party of power during what has been a period of radical technological change. The Conservatives, for a number of reasons, have been somewhat ineffectual at making their voices heard in this space … leaving observers such as ourselves largely unsure of where the party stands on most issues impacting the TMT sector.

What Are The Tories UK TMT Sector Policies?This is not a good thing. These industries are massively influential from a social and economic perspective. According to Ofcom, for example, the U.K. communications marketplace has an annual turnover of £55.9 billion. That’s tens of thousands of jobs and billions of pounds at stake. Policies applicable to the TMT sector also affect how the U.K.

  • (i) sees itself,
  • (ii) communicates,
  • (iii) drives its economy,
  • (iv) learns,
  • (v) projects global influence, etc.

What can we say? The TMT sector is already staggeringly important and will become more so as economies across the globe become increasingly interlinked through electronic communications technologies. So it is common sense that there be senior level engagement with technology issues across all political parties.

This holds particularly true for the Conservative Party.

  • Firstly, they are the UK’s main opposition party.
  • Secondly they are currently engaged in a process of revamping their image and re-orientating their policy offering in order to be relevant.
  • Thirdly, technology – and the policy and regulation associated with it – is always relevant.

However, any proposed policy and regulation must be backed by new thinking. So, although we have been told what sort of music David Cameron has put onto his new iPod, we don’t yet know how he thinks this technology might be used to deliver public service broadcasting or for that matter public services, or what the rights issues might be, and how all of this might impact the commercial market.

Of course there won’t be any answers overnight – and we don’t expect the Conservatives to suddenly unveil a raft of policy positions in what is a highly complex and constantly evolving area. But without doubt there’s a genuine and important opportunity here for the party. Developing a keen and critical understanding of TMT and proposing broad policies likely to harness the benefits that stem from new technologies would provide a platform that would assist the party in being seen as critical to delivering a modern Britain.

What Are The Tories UK TMT Sector Policies?Certainly the party is already developing new ideas (or in some cases adopting the opposition’s cast-offs) in other policy areas. And by all accounts, David Cameron is doing an effective job of moving the Tories back toward the centre of British politics. The new leader appears flexible and open to new policy approaches. But nothing definite is happening in the TMT space. We think it should.

So with this in mind, we have decided that 2006 would be a good time to try and stimulate the political debate in regard to issues impacting the TMT industries by occasionally placing a specific focus on what the Conservatives might look to do for the sector. In doing this we hope to assess, encourage and develop thinking as to what the Conservatives have to offer if (and when) they return to power.

We will not be attempting to write the Conservative Party’s policies in regard to the TMT sector. Far from it – as always, we hope to provide a dialogue – a small impetus that might get a much bigger ball rolling. And any debate on would possibly include the views of those who may not be supporters of the Conservative Party – new or old. We remains open to all.

Tomorrow, in the second installment, we’ll get in to the details of what could get the ball rolling.

Luke Gibbs and Russ Taylor are founders of OfcomWatch

Stephen Carter Leaving Ofcom?

In an update to this story, Ofcom confirm Carter to leave

Stephen Carter Leaving Ofcom?A reasonably insightful interview with Ofcom’s Stephen Carter by Maggie Brown in Monday’s Guardian. There is a suggestion that Carter is looking to move on – which would mean that the implementation of many of the key recommendations/agreements from the various strategic reviews he has overseen will fall to someone else (most likely – Ofcom’s COO – Ed Richards).

Brown suggests that Carter will be judged by the decisions he has taken in regard to ITV – particularly the decision to scale back ITV regional programming obligations. In reality I think the industry – both media and telecoms – are likely to judge Carter by the regulatory settlement he got out of BT.

Stephen Carter Leaving Ofcom?However, interesting to note the use of what Carter refers to as the “‘soft power’ of influence” in regard to decisions taken on ITV. Apparently others – including the ‘independent’ Content Board’ – favoured a different approach on scale backing PSB obligations but didn’t get their way.

Other interesting points from the article –

  • 1. Production Supply Market Review – which is published tomorrow. Carter says Ofcom has not tried to rewrite the ITC’s ‘terms of trade’ agreement made in 2003. He states,

    “We will make it clear that we are not intending to redraw the terms of trade on a short-term basis or whim, given that they have had a relatively short period of time to bite. The 2003 agreement will stand.” Asked for his views about the seven-day window agreed between the BBC and Pact, the independent producers’ body, he says: “It is too electric a subject to speculate on.”

  • 2. BBC – Carter stands by Ofcom’s position that the licence fee money should be ‘contestable’. This reiterates the advice of the independent Burns’ Panel who looked at the BBC structure and funding. However, the government didn’t go with it in the Green Paper on the BBC’s future, and it is unlikely to be in the White Paper. In my opinion this is also the right thing to do- although there will be plenty of people who disagree.

It will be interesting to see where Carter moves – if he does – my money would be on BSkyB (or News Corporation). Of course there will always be a role for him at Ofcomwatch – if he fancied a hands on role in new media.

Luke Gibbs is a co-founder of OfcomWatch
Ofcom