Europe - digital dividend

Reding calls for half of freed spectrum for telecoms

Half of the radio spectrum freed by the switchover from analogue to digital should be allocated to mobile and telephone operators by 2010 to provide broadband internet to rural areas, Information Society Commissioner Viviane Reding suggested to EU telecommunications ministers gathered in Luxembourg yesterday.

While the ministers gavePdf external their support to the Commission's proposal to make the use of spectrum more flexible "with the exception of services of general interest," Reding went further, making clear for the first time how the spare radio frequencies (the so-called "digital dividend") should be used.

"Let me make a very bold proposal," she told reporters yesterday (12 June) in the final press conference of the Council. "Let us agree to make a very efficient and consumer-friendly use of Europe's digital dividend. Let us agree to allocate, by 2010, 50% of this to new mobile and wireless services," she proposed.

Commissioner Reding's suggestion would have an impact on two key sectors that could change the European telecommunications landscape in the coming years: radio spectrum and next generation networks (NGNs).

Concerning radio frequencies, the proposal would please telecoms operators but would maybe find TV broadcasters less enthusiastic. So far the latter have had a quasi-monopoly on radio spectrum, excluding only public emergency services and military uses. But as new digital technology replaces the traditional analogue towards meeting a European deadline of 2012 (the so-called "digital switchover"), the same services can be provided with less spectrum.

Broadcasters will therefore free up some frequencies, but they are keen to get them back for the purpose of offering more advanced services based on increased interactivity. However, by offering half of the freed spectrum to telecoms operators, Reding is creating space for a new powerful actor in the radio spectrum environment.

The justification for this is the need for Europe to catch up in broadband internet penetration, so far lower than other advanced countries in the world, and on average in just 20% of households in the EU. Reding is making clear that wireless services are well placed to close this digital gap.

This position was not to be taken for granted. Indeed, the debate in Europe is now being increasingly channelled towards the subject of NGN deployment. The new networks, based on optical fibres, are considered by many to be the most reliable technology to allow the spread of super-fast internet across the EU, necessary for a range of new services which are already a reality in other parts of the world. These include regular interaction and exchange of roles between users and content producers, video-conferences, eHealth applications, eLearning developments and so on.

The problem is that deploying the new networks requires huge investments and a regulatory framework able to guarantee certainty in the long term, which at the moment does not exist. Reding has just announced that the Commission will launch a public consultation on NGNs after the summer, which will end up in legal proposals by next autumn.

Even with these elements in place, a non-negligable risk remains: the widening of the digital gap. Due to the high costs of deploying NGNs, it is considered very unlikely that operators will invest in rural and less populated areas, where financial returns are far from being certain.

In a future in which the internet will be essential to everybody for basic activities, such making a phone call or paying taxes, the digital gap will become even more of a civil rights issue. "We have to work to close the digital divide otherwise we risk political problems," explained a Council diplomatic source.

The Commission's proposal goes in this direction and suggests wireless services to cover rural areas instead (but also alongside) of finding complex regulatory solutions to favour NGN deployment in less populated regions such as geographical segmentation, which has just begun in the UK and is under consideration by other countries, in particular Spain