Consultation document. Digital Dividend in the UHF frequency band ( MHz)

Transcription

1 Consultation document Digital Dividend in the UHF frequency band ( MHz) Ministry of Economic Affairs 4 June

2 Table of Contents Summary 3 1. Introduction 6 2. Digital dividend and the current use of the UHF frequency band ( MHz) What is the digital dividend? Digital dividend in the Netherlands The current use of the UHF frequency band International developments Geneva 2006 (GE06) agreement EU context World Radio Communication Conference 2007/ Developments in the other EU member states The Dutch policy proposal Policy choice to be considered Preconditions for the policy choice to be made Results of the study Policy proposal Consequences of this policy proposal Broadcasting services Consequences for consumers Programme-supporting services and events Police and emergency services Response and questions 24 Appendix 1 Rights acquired during RRC06 26 Appendix 2 Rights licensed to Publieke Omroep 28 Appendix 3 Rights licensed to KPN/Digitenne 29 Appendix 4 Channels to be made available (Publieke Omroep and KPN/Digitenne) 30 Appendix 5 Proposed new rights for Publieke Omroep 32 Appendix 6 Proposed new rights for KPN/Digitenne 33 Appendix 7 Remaining rights to the vacant layer 34 2

3 Summary At the end of 2006, the Netherlands was the first country in Europe to end analogue terrestrial television broadcasts and switch over to fully digital terrestrial television. The frequency space that became available as a result in the UHF band ( ) was used for the expansion and further rollout of the digital television programmes offered by KPN/Digitenne, in addition to the programmes broadcast by the national and regional public service broadcasters (Publieke Omroep). The expectation is that it will no longer be required to protect the analogue rights of our neighbouring countries by 2012, which will lead to an alldigital situation in this part of Europe. At that point, the Netherlands will actually have access to all acquired digital rights in, for example, the UHF band. Depending on the choices that are made, this means that there will either be enough frequency space available for two additional layers with national coverage for digital broadcasts or more frequency space can be made available for electronic telecommunications. Like its neighbouring countries, the Netherlands has also conducted further research into how this additional digital dividend can be used as effectively as possible. This research has resulted in the policy proposal that is being put out for consultation by means of the present document. The main points of the Dutch policy proposal are as follows: The upper part of the UHF band ( MHz) 1 will be available for medium to low-power electronic communication networks. 2 As a result, high to medium-power broadcasters will not be able to use this part of the band; All high to medium-power broadcasters will have to use the channels between 470 and 790 MHz. The total amount of spectrum allocated for broadcasting purposes will not be affected. Any desired expansion of digital broadcasting services will have to be achieved in the future by using technology that is more efficient as regards use of frequency between 470 and 790 MHz and in the frequency spectrum that is still available on the VHF band. 3 Suitable remaining parts of the spectrum will be designated for other users (programme support and events). The Dutch frequency policy is aimed at flexible and efficient use of available frequencies. The present policy proposal is in line with this overall policy. The following considerations played an important role in drawing up this policy proposal: The current offering of digital terrestrial broadcasts by the public service broadcasters (known collectively as Publieke Omroep) and by KPN/Digitenne in the UHF frequency band will not be affected. However, there will be limited reassignment of channels from the upper part of the UHF band to channels that become available between 470 and 790 MHz; International developments are in line with this policy proposal: o This proposal is in line with international developments in general and with the agreements made during the World Radio Communication Conference 2007; o The proposal is in line with the conclusions set out in the Communication from the European Commission (COM(2007) 700 final) on Reaping the full benefits of the 1 Also referred to as the 800 MHz band. 2 In practice, mobile (two-way) services, including mobile broadband services MHz, also referred to as frequency band III. 3

4 digital dividend in Europe : A common approach to the use of the spectrum released by the digital switchover ; o The proposal is in line with the choices made in the countries surrounding the Netherlands (Sweden, Finland, Ireland, Germany, France and the UK), which have indicated that they wish to use the MHz sub-band for mobile services; A study commissioned by the Ministry of Economic Affairs (DGET/TM) 4 revealed that this choice is expected to generate greater economic added value (and thus increasing prosperity) for the Netherlands in the coming years; The policy proposal encourages more efficient terrestrial spectrum use; The proposal contributes to the further development of mobile broadband in less populated (rural) areas, and it helps to improve the indoor service in urban areas. The purpose of this consultation round is to invite market players and other parties to share their vision and any objections to this policy proposal or parts thereof. The responses will be taken into account in the final policy decisions. It will be necessary to decide whether the visions and arguments submitted justify modifying the policy proposal. This will be weighed against the room available to the Netherlands as regards making its own independent policy choices, and how the Netherlands is connected to international developments. In that context, it is important to obtain a good impression of any transition periods that must be reasonably taken into account in the Dutch situation to resolve potential problems. In this consultation document, market parties and other parties directly involved will be asked to respond to a number of questions that are related to this policy proposal. The parties will be asked to respond to the following questions in this consultation round: 1. Do you agree with the choice made in the policy proposal to (also) make the upper part ( MHz) of the UHF band available for electronic telecommunication networks and services? Can you explain any objections and provide qualitative and quantitative support for your arguments? 2. What is your vision on the expectation that the need for spectrum for electronic telecommunication, including mobile broadband applications, will increase in the near future? Does this expected growth in demand justify the use of additional spectrum in the 800 MHz frequency band for this purpose? 3. Do you expect that the financial crisis will have any effects on investments? Can you indicate what consequences this could have on the present policy proposal? 4. What problems do you anticipate with respect to the policy proposal, as current/possible future user of the UHF frequency band? Can you quantify these problems? And can you indicate whether and, if so, how these problems can be resolved within the context of this proposal? 5. Do you expect problems for consumers? These problems could relate, for example, to the switchover of set-top boxes or the risk of interference in the reception of both terrestrial broadcasts and cable programmes. Can you quantify these problems? How can these problems be resolved? 6. What is your vision of the increasing availability of frequency spectrum for such uses as mobile broadband in rural areas? In your opinion, are there other ways to meet this need and, if so, what are they? 4 Analysys Mason: Final report dated 24 July 2008, Economic and Social Limitations to Alternative Use of Digital Dividend Spectrum. 4

5 7. Assuming that the spectrum is released in 2012, when do you think that the different phases of this policy proposal (allocation, release of the uppermost sub-band, distribution of the spectrum released) can be performed most effectively? 8. What are the advantages and/or disadvantages of the possible later reassignment of channels after 2012, such as reassignment upon the expiry of the current licences in the UHF spectrum on 31 January 2017? 9. What might be a reasonable method of compensation in the case of a switchover to lower channels before the end of the licences of the current users in the UHF frequency band? 10. Do you see any advantages and/or disadvantages if the issue of the so-called 800 MHz band is linked to the allocation of other spectrum that becomes available? What are those advantages/disadvantages? 11. What alternatives do you see for facilitating the applications for programmesupporting services and events (wireless microphones, reporting connections and other users) if the MHz upper band is used for electronic telecommunications networks? When will these alternatives be available for use? We invite the parties to also include in their response any issues that have not been addressed in the above questions. 5

6 1. Introduction In 2002, the Netherlands made an initial attempt at digital broadcasting (mainly in the Randstad conurbation) in the frequency spectrum that was still available on the UHF band. After the switch-off of analogue television during the night of 10 to 11 December 2006, it was possible to use the formerly analogue channels for digital television broadcasts. From 2006 onwards, it was possible to create a digital television network covering the entire country. However, because analogue television is still protected in our neighbouring countries, it will not be possible to use all the available channels in the UHF frequency band before mid A decision will have to be made as regards the best use for the frequency spectrum that is expected to become available in This document sets out that decision as a policy proposal subject to consultation. This consultation document only relates to the spectrum that will be released in the UHF frequency band. This document is structured as follows. Chapter 2 specifies the concept of digital dividend and identifies the part of the digital dividend that will be released in Current usage in the UHF frequency band is discussed. Chapter 3 outlines the international context in which the Dutch policy proposal was drawn up. Chapter 4 sets out the Dutch policy proposal and discusses the options, considerations, preconditions and consequences involved. Finally, Chapter 5 will present the questions to which market and other parties can respond, along with an explanation of the procedure. 6

7 2. Digital dividend and the current use of the UHF frequency band ( MHz) 2.1. What is the digital dividend? In 1997, a European initiative was undertaken to make broadcasting digital in the frequency spectrum used by the broadcasters. The main goal of digitisation is more efficient use of the spectrum than is possible with analogue technology. With the help of digital technology, a number of television and/or radio programmes are transmitted jointly by means of a so-called multiplex. As a result, a much smaller radio spectrum is required to broadcast the original analogue television programmes. The released spectrum is referred to as the digital dividend (the frequency gain from digitalisation) Digital dividend in the Netherlands Two distinct phases can be distinguished with respect to the digital dividend in the Netherlands. Phase 1 (2006): digitalisation and expansion of the broadcasting system Until the switch-off of analogue television, the UHF band (like the VHF band and frequency band I (47 68 MHz)) was mainly used for the analogue transmission of the television programmes of the national and regional public service broadcasters. At the end of 2006, the Netherlands became the first country in Europe to end analogue terrestrial television and switch completely over to digital. The public service broadcasters (Publieke Omroep) were granted a licence to use a single multiplex covering the entire country until 31 January This multiplex allows the national and regional broadcasters to transmit their programmes digitally (see Appendix 2). The digital dividend created in 2006 has been used to roll out four multiplexes with national coverage, which are licensed to KPN/Digitenne until 31 January 2017 (see Appendix 3). As a result, a package was compiled consisting of approximately 20 television stations 5 drawn from the Dutch commercial channels and foreign public service broadcasters. In 2008, this frequency spectrum was also allocated for the transmission of mobile television using DVB-H technology. The Netherlands has therefore already allocated a significant part of the digital dividend for broadcasting purposes. The figure below (Figure A) shows the digital dividend in a diagram. The top bar represents the old situation (before the switch-off of analogue television). The middle bar shows the situation in which the spectrum needed to broadcast the programmes of the national and regional broadcasters has been reduced to a single multiplex. A large part of the digital dividend has been licensed to KPN/Digitenne, as illustrated by the bottom bar in Figure A. The remaining digital dividend is expected to become available in In reality, the remaining digital dividend is not a continuous block of spectrum as indicated here, but is spread across various channels in the UHF band (see Figure B). The bottom bar in Figure A shows the situation after reassignment of the allotments, where the upper sub-band between 790 and 862 MHz has been cleared of high to medium-power broadcasters. 5 Several digital radio stations are also included. 7

8 Public service television before Geneva 2006 Band I(MHz) Band III(MHz) Band IV Band V (MHz) Analogue VHF band UHF band Digital Digital public service television 1 multiplex Digital dividend in the UHF band This covers 7 national DVB-T multiplexes. PO KPN/Digitenne Remaining digital dividend in 2012 Licensed until 2017 Figure A The main policy motivation for this decision was to facilitate competition for cable television. In the Netherlands, there is only one cable company that provides cable television to consumers in a particular geographical area. It was therefore decided at the time that, when the frequency spectrum was released, it would be advisable to allocate it in such a way that a broader programme package could be offered to Dutch consumers via terrestrial digital television broadcasts, which would provide consumers with an alternative to (analogue) cable television. In recent years, the number of households using terrestrial distribution has grown from 128,000 6 to more than 770,000. In addition, the number of satellite users is also increasing. The number of subscribers to digital terrestrial television and the number of satellite subscribers are growing faster than the number of cable subscribers is falling, which means that there is not only substitution involved, but also supplementary use in addition to cable reception. The market data for digital television connections according to reception method shows that cable is experiencing the largest increase, but substantial growth can also be seen for both terrestrial reception and satellite reception. This data refers to a total of approximately 3 million connections as of the end of When analogue television was switched off in the Netherlands, approximately 30,000 households were using terrestrial ether reception. 8

9 Distribution of television in the Netherlands (analogue and digital), 1994 Q [Figure: Percentage aansluitingen = Percentage of connections by infrastructure type; Kabel = Cable; Satelliet = Satellite Bron = Source: Netherlands Organisation for Applied Scientific Research (TNO)] [Figure: Digitale televisieaansluitingen = Digital television connections by reception method, ; mln = million; 3,5 = 3.5, etc.; Satelliet = Satellite; Kabel = Cable Bron = Source: Netherlands Organisation for Applied Scientific Research (TNO)] The choice made by the Netherlands resulted in all available frequency spectrum in the UHF band in the Netherlands being allocated in 2006 to Publieke Omroep and KPN/Digitenne to enable them to roll out national multiplexes. Consequently, this resulted in the allocation of 9

10 channels that are spread over the UHF band (see Figure B). Other channels could not be used (at that stage) because of the protected rights in our neighbouring countries. In the meantime, a large share has been licensed to Publieke Omroep and KPN/Digitenne (the green channels). The blue channels will become available in The red channels are used for other purposes (and are not available for broadcasting purposes). The UHF band is divided into 49 channels of 8 MHz each (channels 21 69). 470 MHz 21 to to / to to to MHz Figure B Phase 2: What to do with the frequency spectrum being released in 2012 Once analogue television in our neighbouring countries no longer needs to be protected from 2012 onwards, the Netherlands will gain access to the remaining VHF and UHF spectrum (except for channels 38, 59 and 63), which cannot be used until For the Netherlands, this means additional frequency spectrum in the UHF band, which, depending on the choices made, means one of the following: frequency spectrum will available for either an additional two layers with national coverage for digital broadcasts or more frequency spectrum can be offered for electronic telecommunications. For broadcasting, there will be one good-quality multiplex with national coverage and a lesser-quality multiplex which will probably have national coverage The current use of the UHF frequency band National and regional public service broadcasters A licence was granted to Publieke Omroep (i.e. the public service broadcasters) for the use of a single multiplex with national coverage until 31 January 2017 (see Appendix 2). This multiplex uses DVB-T technology to broadcast the television (and radio) programmes transmitted by the national and regional public service broadcasters. 10

11 KPN/Digitenne facilitates other digital broadcasts KPN/Digitenne uses four multiplexes with national coverage to broadcast a package of approximately 20 television channels 7 consisting of Dutch commercial broadcasters and foreign public service broadcasters. KPN/Digitenne is now also offering mobile television based on DVB-H technology. The licence has been granted until 31 January Other users: programme support and events The UHF frequency spectrum is also used by a number of other users. The main ones are the so-called programme-support services and users for large events. This includes wireless audio connections (reporting connections and low-power intercom connections) and wireless microphones. Some of these users are permanent licence holders, some have temporary licences and, especially in the case of wireless microphones, some users do not need a licence. These low-power users of the UHF spectrum often temporarily use the vacant space between allotments or the still vacant channels. This use is not evenly spread across the Netherlands in terms of location and time; instead, there are hotspots where the use is more intensive, such as in Hilversum or during events such as pop concerts. To date, channel 63 has been kept free of DVB-T use to ensure that there is a national channel available for the specific category of wireless microphones. Radio astronomy In the Netherlands, channel 38 in the UHF band is used for radio astronomy. It has now become clear that an increasing number of neighbouring countries will be using this channel for other purposes, but they will take into account the fact that the Netherlands uses the channel for radio astronomy. 7 Several digital radio stations are also broadcast in this package using DVB-T technology. 11

12 3. International developments Frequency use has cross-border consequences (interference), so allocation and usage is based on international agreements and arrangements. This also applies to the UHF frequency band. This chapter examines the international context Geneva 2006 (GE06) agreement After the digitalisation of communication systems, work began in the 1990s on digitalisation for television in particular. With respect to terrestrial broadcasting, an agreement was first made at the European level (CEPT) about the introduction of DVB-T see the Chester agreement (CH97). It quickly became clear that the underlying frequency plan 8 (which was based on analogue technology) would have to be completely re-written to achieve more efficient use of the available frequencies. International negotiations in an ITU 9 context in 2004 (RRC04) 10 and 2006 (RRC06) resulted in the Geneva 2006 (GE06) agreement, which included a new digital frequency plan. This frequency plan contains the frequency bands III ( MHz), IV ( MHz) and V ( MHz). The assumption here is that the entire spectrum will be used for digital television (taking into account DVB technology) and digital radio (taking into account DAB technology). Historically, the UHF frequency spectrum was predominantly used for television. During the conference, most of the CEPT member states 11 had already focused on the options for more flexible use of this frequency spectrum, especially the upper part of the UHF band (Band IV/V). This is included in footnote of the ITU s Radio Regulations. An annex with a statement regarding country-specific use was also added to the GE06 agreement. By signing this statement, the countries in question including the Netherlands declared that the frequency spectrum may also be used for purposes other than broadcasting, as long as this does not result in interference exceeding the agreed technical usage standards or in any requests for higher protection standards (to prevent unacceptable interference) than those included in the agreement. There is still some leeway to adapt the agreements on interference and protection standards by means of bilateral and multilateral negotiations between countries. During the RRC06, an attempt was made to give all the countries equitable access to the frequency spectrum. For the Netherlands, this resulted in the frequency rights for seven national layers (see Appendix 1), with one layer being of lesser quality. In the case of Band IV/V, a layer is defined as a single DVB-T coverage for the entire country, which can facilitate one multiplex. With the existing DVB-T technology, a multiplex offers space to broadcast approximately five television channels and several digital radio stations. However, improved compression techniques make it possible to broadcast more television programmes 8 The so-called Stockholm 1961 (ST61) agreement, which set out the analogue frequency plan for analogue television broadcasts. 9 International Telecommunication Union, the UN organisation responsible for international agreements on frequency use. 10 Regional Radio Communication Conference 11 Conférence Européenne des administrations des Postes et des Télécommunications (European Conference of Postal and Telecommunications Administrations). 12

13 or to transmit better-quality broadcasts, such as High Definition television (HDtv). This frequency spectrum is also suitable for providing mobile television using DVB-H technology. A layer is composed of several allotments. An allotment is a geographic area in which a DVB-T broadcast can be achieved by placing one or more stations on the same frequency (a single frequency network, or SFN). However, the technology (DVB-T) limits the geographic dimensions of such an allotment, so the full national coverage of a layer can only be achieved through a combination of allotments. Elke kanaal komt overeen met een bepaald allotment (geografisch gebied). Een samenstel van kanalen/allotments vormen een landelijk dekkende laag (layer)/multiplex MHz 862 MHz [Figure above: Each channel corresponds to a certain allotment (geographic area). A combination of channels/allotments forms a layer/multiplex with national coverage.] The GE06 agreement states that countries may protect their analogue rights until 2015 at the latest. Until that date, the countries have the protected right to continue transmitting analogue television. This protection means that other countries are limited in their opportunities to use their digital frequency rights. In a European context (CEPT), it has been agreed that this protection of analogue rights will remain in force until mid-2012 at the latest. This agreement on the protection of analogue television is the reason why, despite the switchoff of analogue television in the Netherlands in 2006, we have been limited in our ability to use the UHF spectrum to date for digital applications, and why we have not yet been able to use a considerable number of the spectrum channels. As soon as we are no longer obliged to protect the analogue rights of our neighbouring countries, the Netherlands will have access to additional frequency spectrum in the UHF frequency band. This available spectrum will cover two national DVB-T layers (one good-quality layer and a layer of lesser quality). Further agreements have to be made with Germany concerning channel 69 in the lesser-quality layer, because this is a channel shared by the Netherlands and Germany EU context In 2005, the European Commission published a Communication on Accelerating the transition from analogue to digital broadcasting. 12 In this regard, the Commission stated that 12 COM(2005)

14 the released spectrum offers a unique opportunity to meet the rapidly growing demand for wireless communication services. In addition to the importance of broadcasting to develop and expand new services, the Commission stated that broadband applications can offer support for the i2010 initiative 13. The renewed Lisbon strategy emphasises the importance of ICT in creating growth and jobs as a major driver of innovation and productivity gains. In that context, the Commission argues for coordinated measures at EU level to ensure the best possible use of the digital dividend from a combined social and economic perspective. This vision was further developed by the Commission in the Communication on Reaping the full benefits of the digital dividend in Europe: A common approach to the use of the spectrum released by the digital switchover. 14 For illustration purposes, the following clustering structure is outlined in the aforementioned Communication: Commission proposal as presented in the Communication of 13 November 2007 Common spectrum sub-bands (clusters) 470 MHz < UHF band > 872 MHz SPECTRUM UNDER EXCLUSIVE NATIONAL MANAGEMENT SPECTRUM COORDINATED AT EU LEVEL Spectrum used for the continuation of current TV and radio services Vacant spectrum for the national part of the digital dividend Example of services: more TV services, possibly HDtv Example of service: narrow-band mobile TV Example of services: wireless broadband access, high-speed mobile data access Unidirectional networks (high power) Part constituting the real digital dividend Unidirectional networks (low to medium power) Bi-directional networks (low power) European Commissioner Reding stated that the use of the digital dividend for electronic telecommunication is expected to contribute between 150 and 200 billion euros to the European economy. 15 The European Commission believes that the upper part of the UHF band must be released through EU harmonisation. Coordinated frequency use within the Community offers advantages in the form of economy of scale, according to the European Commission. If the same frequency spectrum is allocated for the same use Europe-wide, this will create a larger European market, thus offering equipment producers significant advantages and resulting in 13 COM(2005) 229 on A European Information Society for growth and employment. 14 COM(2007) 700, dated 13 November Memo/09/155, dated 7 April

15 lower purchase costs for equipment, if the equipment can be used throughout the entire European Union. The member states responded critically to this proposal from the Commission for harmonisation, because of the different member states various uses in the UHF band and the danger of disrupting the balance of equitable access between the member states. It was decided to further investigate the technical possibilities as regards the use of broadband in the upper part of the UHF band. The European Commission has asked CEPT to report on this subject. The Commission has also contracted Analysys Mason, DotEcon and Hogan & Hartson to conduct a study. Consultations will be held at European level to allow the market and other parties to share their vision with the firms conducting the study. The results of the study are expected to be published in the third quarter of 2009, after which the European Commission will further define its position in the latter part of this year. The Netherlands position on the Commission s proposals was submitted to the Lower House of the Dutch Parliament in a letter dated 18 December This position was set out in a file drawn up by the Assessment of New Commission Proposals Working Group (Beoordeling Nieuwe Commissievoorstellen - BNC). 16 The Netherlands expressed its position as follows: The Netherlands understands the Commission s proposals to allocate part of the digital dividend to services other than traditional broadcasting. However, it would be preferable if the Commission could offer more clarity about the size of the sub-bands that it envisages, and what can be retained for national broadcasting. Furthermore, greater clarity about the Commission s vision is also desirable, both with regard to the European harmonisation and the proposals to draw up measures at EU level to reserve and coordinate the common bands. The steps taken by the European Commission to conduct further research are in line with the wishes of the Netherlands World Radio Communication Conference 2007/2011 Not only in Europe but also worldwide, there is an international tendency to make more spectrum available for mobile services in connection with the increasing consumer demand for mobile applications. Against this background, it was decided at the ITU s World Radio Communication Conference 2007 that mobile telecommunication will be given the same protected status as radio and television in the upper part of the UHF band ( MHz) from 2015 onwards. The effects of this measure are the subject of further studies, which will be discussed at the next World Radio Communication Conference in Developments in the other EU member states Despite the initial critical position of most of the member states on the Communication from the Commission, several member states have now accepted the idea of clearing the upper subband of the UHF band of high-power broadcasters. At present, six European member states have decided to adopt a proposed policy of keeping the upper part ( MHz) of the UHF band free of high-power broadcasters and of making this frequency spectrum available for electronic telecommunication networks. 16 Lower House of the Dutch Parliament, parliamentary session, , no. 598, pages

16 Policy proposal for the MHz sub-band Keep this sub-band free of high-power broadcasters and make it available for mobile broadband services Consider making the upper band available for mobile broadband services No decision taken yet Digital broadcasting Member states Germany, Finland, France, Sweden, UK, Ireland Czech Republic, Hungary, Luxembourg, Latvia and Slovakia Austria, Belgium, Bulgaria, Cyprus, Denmark, Estonia, Greece, Italy, Poland, Portugal, Romania and Slovenia Spain, Lithuania and Malta Source: Analysys Mason, DotEcon and Hogan & Hartson The consequence of this development is that countries will have to further coordinate their national needs with one another within the framework of the GE06 agreement and frequency plan in order to prepare for 2012 when protection for analogue broadcasting in the UHF band is no longer required. The international frequency planning will be much simpler if the countries make the same choices as regards the use of the same frequency spectrum. If neighbouring countries make different choices, this may lead to coordination problems and sub-optimal frequency use, especially in the border areas. In particular, there may be problems with interference if high to medium-power broadcasters in one geographic area and medium to low-power electronic telecommunication networks in a neighbouring area use the same channels. 16

17 4. The Dutch policy proposal 4.1. Policy choice to be considered The question that the Netherlands is considering as in the other European countries is how to deal with the digital dividend in the UHF band. The Netherlands has already responded to this question to a large extent by granting KPN/Digitenne a licence for four national multiplexes for broadcasting digital television. The next question is what the Netherlands wants to do with the remaining part of the digital dividend after There are two alternatives: 1) Use the additional frequency spectrum in the UHF band after 2012 to expand traditional broadcasting services using DVB 17 technology; or 2) Reassign the use of the UHF frequency band such that the upper band ( MHz) is available for transmission regardless of technology or services. As a result, it will also be possible to use this frequency spectrum after 2012 for electronic telecommunication networks and services (such as two-way services, including mobile broadband applications). The so-called 800 MHz band is a particularly sought-after spectrum due to the favourable propagation properties of this part of the spectrum: in addition to covering larger geographic areas, which significantly reduces the costs of a network, this spectrum is also ideally suited for indoor reception options. As a result, this spectrum is in demand both for radio and television and for electronic telecommunication applications. It is therefore legitimate to ask whether there is an added value for electronic telecommunication applications. A significant increase is expected in the demand for frequency spectrum to enable mobile broadband use in rural areas and indoor mobile broadband use in urban areas in a costeffective manner. Despite frequency spectrum already being or soon becoming available for mobile applications in the 900 MHz, 1800 MHz, 2.1 GHz, 2.6 GHz and 3.3 GHz bands, the demand for mobile services is expected to increase in the coming years. 18 This would justify the expansion of spectrum space in the 800 MHz band for mobile electronic telecommunication applications Preconditions for the policy choice to be made The additional frequency spectrum that will be released in 2012 is spread over various channels across the UHF band. These channels are largely wedged in between the channels that are used for radio and television broadcasting purposes and that are used by high to medium-power broadcasters. This makes the released channels unsuitable for applications other than broadcasting, as a result of the interference from high-power, high-tower broadcast networks. More flexible use of the released frequency spectrum that is also suitable for electronic communications networks requires reallocation of some of the channels used 17 Such as DVB-T and DVB-H. 18 Study of the consumer s need for mobile broadband services the anywhere consumer and developments on the supply side; the Dutch consumer (Onderzoek consumentenbehoefte mobiele breedbanddiensten de anywhere consument en ontwikkelingen aan de aanbodzijde; de Nederlandse consument), Yankee Group on behalf of the Ministry of Economic Affairs, 3 December

18 for broadcasting. This reallocation will release the upper part of the UHF frequency band ( MHz) for (two-way) electronic telecommunications, such as mobile broadband. The redistribution of channels is necessary to allow wireless and mobile telecommunications in the top part of the UHF band. This redistribution will free the top part from high and mediumpower broadcasters. Green is Publieke Omroep (PO) and KPN/Digitenne (redistributed); blue will be issued in 2012 (channels 61 to 69, service-neutral) and red is not available. 470 MHz 21 to to to to to MHz Channel 51 is green and blue because it will be used in two allotments, one of which can be assigned to KPN/Digitenne, with the other allotment being a vacant channel. Figure C The consequence of such a choice is that some of the channels that Publieke Omroep (channel 66) and KPN/Digitenne (channels 64, 65 and 66) currently use in the upper part of the UHF band will have to swap places with the channels that will become available in the MHz band in 2012 (see Appendix). The next question is what this means for broadcasting use. There is expected to be a demand for options to expand services and, if possible, to introduce innovative services. Possibilities include expanding the number of programmes available for mobile television and increasing quality by deploying High Definition television (HDtv). Based on the current situation as regards the technological options, it must be concluded that a more efficient use of the spectrum by radio and television broadcasters in The Netherlands can be achieved by means of improved compression techniques. 19 The selection of alternative 2 does not affect the current rights of Publieke Omroep and KPN/Digitenne in the UHF band. The possible expansion of services or an improvement of quality will have to be achieved in the frequency spectrum currently licensed in the UHF frequency band or, if possible, by using compression technology in the frequency spectrum to be released in the VHF frequency band ( MHz) 20. A transition to innovative technology will also mean that the set-top boxes have to be replaced. 19 Introduction of MPEG4 or DVB-T2 technology. 20 The possibilities of band III ( MHz), National Telecoms Agency (Agentschap Telecom), 19 March

19 There needs to be a greater focus on the effects that use of the MHz frequency band by electronic telecommunications networks will have on the reception devices used by consumers (both the set-top boxes for digital terrestrial reception and the boxes used to receive digital cable programmes). Both types of boxes are suitable for receiving programmes in the MHz sub-band. At present, an international study is being conducted into the consequences that would result if this sub-band were opened up for electronic communications networks and the effects that this could have on the quality of reception. The consequence of freeing the MHz sub-band of high to medium-power broadcasters is that this space becomes available for electronic telecommunications networks. At a later date, more detailed policy frameworks will be formulated regarding the allocation of this frequency spectrum during the preparations for the allocation process, once it is time to address this issue. The effect of digitalising broadcasting in the UHF band is that more efficient (and therefore more intensive) use is made of the available frequency spectrum. By clearing the upper part of the UHF frequency band and opening this sub-band for electronic telecommunications, the vacant available space will probably be reduced even further. As a result, less spectrum could be available for programme-supporting services and events. In the international discussions, the Netherlands has left channel 63 vacant so that it can offer these users a permanent frequency band in the spectrum which can be used throughout the entire country. Because of the release of channels ( MHz), channel 63 will no longer be available and use of this part of the sub-band by other users will be virtually impossible, with the exception of a so-called duplex gap 21, if this decision is taken. Currently, research is being conducted in a CEPT context into the possibilities and limitations involved. Below is a diagram of an optional allocation of the MHz sub-band (channels 61 to 69), in which low-power other users could use the duplex gap. 790 MH 821 MHz 832 MHz 862 MHz LTE (Downlink) Duplex-gap LTE (Uplink) 1 MHz 10 MHz 10 MHz 10 MHz 11 MHz 10 MHz 10 MHz 10 MHz If the decision is made not to implement mobile communications using FDD (Frequency Division Duplex), but to use TDD (Time Division Duplex) instead, the situation will be different. In that case, other solutions will be necessary. 21 The space between the Uplink (UL) and Downlink (DL) in a Frequency Division Duplex (FDD) system. 19

20 4.3. Results of the study To make a proper policy assessment, the Ministry of Economic Affairs (DGET/TM) commissioned Analysys Mason at the beginning of 2008 to perform a study to identify the expected economic and social effects of both alternatives. To this end, Analysys Mason studied and compared both alternatives in order to obtain an impression of the expected economic and social effects. 22 The most important conclusion that can be drawn from this study is that the 800 MHz subband is indeed an economically valuable spectrum that can make an important contribution to the Dutch economy. In the study, one of the options considered was that the spectrum licensed until 2017 would remain unchanged in terms of the amount (in other words, keep five multiplexes for broadcasting), but that individual channels could be reallocated to make subband MHz available for electronic telecommunications services. The result of this study is that the highest net added present value can be expected between 2008 and 2029 if the upper part of the UHF band is used for electronic telecommunications, such as broadband, with an expected base value of 6.3 billion euros. In the case that the UHF band is used exclusively for broadcast purposes, including an extra mobile television application, this economic value will be lower at an expected net added present value of 4.9 billion euros. 22 Analysys Mason: Final Report dated 24 July 2008, Economic and Social Limitations to Alternative use of Digital dividend Spectrum. 20

21 Change in value with the use of the digital dividend Billions of euros (NCW) 7 6 DTT+mobile TV+mobile broadband DTT with extra mobile TV Only digital ether broadcasting (DTT) Number of multiplexes Source: Analysys Mason One uncertain aspect of these results is the actual need in the Netherlands for mobile broadband in rural areas, which raises the question of the added value to consumers. It is clear that more efficient use of network structures, including the use of the 800 MHz band in urban areas, will have a positive effect as a result of better in-house reception in the Netherlands Policy proposal Taking all of this into account, the following policy proposal is hereby put forward for consultation: The upper part of the UHF frequency band ( MHz) will be cleared of high to medium-power broadcasters. This frequency spectrum will then be made available in part for electronic telecommunication that uses medium and low power (in practice, mobile (two-way) services, including mobile broadband services). The Dutch frequency policy is aimed at flexible and efficient frequency use. This policy proposal is aligned with that intention. The following considerations played an important role in drawing up this policy proposal: The current offering of digital terrestrial broadcasts by the public service broadcasters (known collectively as Publieke Omroep) and by KPN/Digitenne in the UHF frequency band will not be affected. However, there will be limited reassignment of channels from the upper part of the UHF band to channels that become available between 470 and 790 MHz; International developments are in line with this policy proposal: o This proposal is in line with international developments in general and with the agreements made during the World Radio Communication Conference 2007; o The proposal is in line with the conclusions set out in the Communication from the European Commission (COM(2007) 700 final) on Reaping the full benefits of the digital dividend in Europe : A common approach to the use of the spectrum released by the digital switchover ; 21

22 o The proposal is in line with the choices made in the countries surrounding the Netherlands (Sweden, Finland, Ireland, Germany, France and the UK), which have indicated that they wish to use the MHz sub-band for mobile services; A study commissioned by the Ministry of Economic Affairs (DGET/TM) 23 revealed that this choice is expected to generate greater economic added value (and thus increasing prosperity) for the Netherlands in the coming years; The policy proposal encourages more efficient terrestrial spectrum use; The proposal contributes to the further development of mobile broadband in less populated (rural) areas, and it helps to improve the indoor service in urban areas Consequences of this policy proposal Broadcasting services Unlike in the other European countries, where analogue terrestrial television still has to be switched off, the Netherlands has allocated the MHz spectrum for digital broadcasting. Therefore, in the Netherlands, the intention is not to keep this sub-band free of high to medium-power broadcasting, but instead to release it. This means that the current users the public service broadcasters (Publieke Omroep) and KPN/Digitenne will have to release channels in the MHz sub-band and start using channels released in the MHz instead. This is possible 24 without taking licensed frequency spectrum away from the current licence holders. In the UHF band, they will continue to have access to a single multiplex with national coverage or four multiplexes with national coverage, respectively. However, costs will be involved in this reallocation of channels. In addition, an investigation is still in progress to determine whether this measure will necessitate the relocation of access points or new access points. The best way of allocating reasonable compensation also has to be determined: it remains a possibility that funding will have to be made available to finance the consequences of reallocating the channels. Appendices 4, 5, and 6 illustrate the reallocation of the channels in the context of the acquired RRC06 rights. If the radio and television broadcasters want to expand the number of services in the UHF band or improve the quality of the services by using high to medium-power broadcasting stations, they will only be able to do so in the MHz sub-band in the UHF band. This will require more efficient compression techniques to achieve more efficient frequency use. Any expansion of broadcasting services using efficient compression techniques can also take place, where possible, in the VHF band ( MHz) where frequency spectrum will also become available after 2012, and possibly also in the still very limited remaining space in the UHF band (see Appendix 7). Which broadcasting services will ultimately use this frequency spectrum will partly depend on the compression techniques that are used Consequences for consumers Changing the channels used by broadcasters will result in the set-top boxes automatically detecting these changes and searching for the new channels. Consumers will have to be adequately informed about this process. The expectation is that support will have to be provided for consumers who need assistance. 23 Analysys Mason: Final report dated 24 July Economic and Social Limitations to Alternative Use of Digital Dividend Spectrum. 24 Further bilateral agreements with neighbouring countries will have to be made for this purpose. 22

23 The current set-top boxes can receive signals from the entire UHF band. This applies to both the set-top boxes that are used for terrestrial reception (DVB-T) and to cable reception (which uses the same frequencies, but via cable). If part of this band is used for mobile applications, it is not possible to give an absolute guarantee in advance that there will be no interference. International research is taking place on this subject. The results of that research will determine the measures to be taken. The social effects of a switchover should also be considered: transitional periods and transitional measures may be needed Programme-supporting services and events The users for programme-supporting services and events will no longer be able to use channel 63. Solutions will have to be sought in consultation with this sector to ensure sufficient spectrum and options to continue their services. Here as well, part of the solution will ultimately have to involve more efficient and flexible hardware and/or use of the duplex gap. Any reasonable transitional period will have to be determined in the light of the depreciation periods that apply for the hardware Police and emergency services The police and the emergency services have indicated that they would like to use part of the digital dividend for broadband emergency applications. The expectation is that the wishes of the police and the emergency services can be met in other frequency bands. In addition, it is not possible to allocate part of the UHF spectrum to the police and emergency services because of the pressure on the spectrum. A decision can only be made on this subject once a request has been submitted in the form of a plan that clearly sets out the needs involved. 23

24 5. Response and questions The market parties and other parties directly involved are requested to respond to this policy proposal and share their views. We request that the parties focus in particular on the following questions: 1. Do you agree with the choice made in the policy proposal to (also) make the upper part ( MHz) of the UHF band available for electronic telecommunication networks and services? Can you explain any objections and provide qualitative and quantitative support for your arguments? 2. What is your vision on the expectation that the need for spectrum for electronic telecommunication, including mobile broadband applications, will increase in the near future? Does this expected growth in demand justify the use of additional spectrum in the 800 MHz frequency band for this purpose? 3. Do you expect that the financial crisis will have any effects on investments? Can you indicate what consequences this could have on the present policy proposal? 4. What problems do you anticipate with respect to the policy proposal, as current/possible future user of the UHF frequency band? Can you quantify these problems? And can you indicate whether and, if so, how these problems can be resolved within the context of this proposal? 5. Do you expect problems for consumers? These problems could relate, for example, to the switchover of set-top boxes or the risk of interference in the reception of both terrestrial broadcasts and cable programmes. Can you quantify these problems? How can these problems be resolved? 6. What is your vision of the increasing availability of frequency spectrum for such uses as mobile broadband in rural areas? In your opinion, are there other ways to meet this need and, if so, what are they? 7. Assuming that the spectrum is released in 2012, when do you think that the different phases of this policy proposal (allocation, release of the uppermost sub-band, distribution of the spectrum released) can be performed most effectively? 8. What are the advantages and/or disadvantages of the possible later reassignment of channels after 2012, such as reassignment upon the expiry of the current licences in the UHF spectrum on 31 January 2017? 9. What might be a reasonable method of compensation in the case of a switchover to lower channels before the end of the licences of the current users in the UHF frequency band? 10. Do you see any advantages and/or disadvantages if the issue of the so-called 800 MHz band is linked to the allocation of other frequency spectrum that becomes available? What are those advantages/disadvantages? 11. What alternatives do you see for facilitating the applications for programmesupporting services and events (wireless microphones, reporting connections and other users) if the MHz upper band is used for electronic telecommunications networks? When will these alternatives be available for use? We invite the parties to also include in their response any issues that have not been addressed in the above questions. Respondents may submit their views on this policy proposal and respond to the questions posed in writing up to 3 July 2009 inclusive. 24

25 Please your response to Please provide your responses in ODF or Microsoft Word format, possibly as a supplement to a PDF document, so that we are able to efficiently process your reactions. You can also submit a written response by post to the following address: Ministerie van Economische Zaken, DGET t.a.v. drs. E.M.M. Mulders, ALP C/334 Postbus EC The Hague The Netherlands Please state in your response whether it may be made public, or if you want it to be kept confidential. The responses received will be used to support or adjust the proposal and finalise the policy. No rights may be derived from the consultation document or the submission of a response to the consultation document. You will not be paid for your response. If you have any questions please send an to e.m.m.mulders@minez.nl, or call +31 (0) /8150. More information The Ministry of Economic Affairs commissioned Analysys Mason to conduct a study into the expected economic and social effects of the use of the digital dividend spectrum. The results of this study are available in a report that you can download at: 25

26 Appendix 1 Rights acquired during RRC06 RRC layer 1 RRC layer 2 RRC layer 3 RRC layer 4 26

27 RRC layer 5 RRC layer 6 RRC layer 7 27

28 Appendix 2 Rights licensed to Publieke Omroep Publieke Omroep layer The layer licensed to Publieke Omroep is the same as RRC layer 6. 28

29 Appendix 3 Rights licensed to KPN/Digitenne KPN/Digitenne layer 1 KPN/Digitenne layer 2 KPN/Digitenne layer 3 KPN/Digitenne layer 4 Channel 67 in Digitenne layer 4 has been temporarily replaced by channel 32. KPN/Digitenne is therefore not using channel 67 in Zeeland/Noord-Brabant, but is using channel 32 instead for the time being. 29

30 Appendix 4 Publieke Omroep layer (channel to be released is marked) Channel 64 should be channel

31 KPN/Digitenne layers (the channels to be released are marked) 31

32 Appendix 5 Proposed new rights for Publieke Omroep (until 31 January 2017) The original channel 66 (allotment in Groningen) will be replaced by channel 46 (shown in red). The rights for channel 46 were acquired during RRC06. 32

33 Appendix 6 Proposed new rights for KPN/Digitenne (until 31 January 2017) The channels that will be changed are shown in red. Channel 32 in Zeeland/Noord-Brabant is currently being used temporarily by KPN/Digitenne. 33

34 Appendix 7 Remaining rights Vacant layer 34