Euro DTT spectrum auctions 'will fail'

A major study, commissioned by the European Broadcasting Union, says: “there are sound economic reasons why a market for [upcoming] UHF spectrum is likely to fail”.

While not specifically targeting the UK where Ofcom is charged with selling off analogue spectrum freed up in the nation’s change to digital TV, the report states auctions should be avoided because terrestrial TV “generates significant public value for society that would not be visible in any hypothetical contest for spectrum with other uses, and cannot easily be replicated through provision of TV using other platforms.”

The report, from Oliver & Ohlbaum Assoc., and DotEcon Ltd., pulls no punches and warns regulators (and their political masters) that the “medium-term value that could be created by other uses of UHF spectrum – including rural broadband - appears modest.”

The problem, long talked about but echoed by the study, says that Europe’s main terrestrial broadcasters are funded publicly, or by ads, or a mixture of both. “While these funding models deliver high public and consumer value, the broadcasters are less able than alternative service providers, such as mobile operators, to directly monetise the consumer relationship.”

The report also says that the anticipated €millions likely to flow from the mobile community for any auction is largely a “mobile myth”. “In fact, a closer investigation of the business case behind deploying mobile networks in UHF spectrum suggests there is little substance to these claims and the economic case for mobile in the UHF band in Europe is dubious.” The study then argues that the case for rural (wireless) broadband is also weak, while cellular and other broadband devices deployed in the UHF space