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Ofcom floats spectrum charges for digital broadcasting, announces local TV part II

In what was clearly a busy day for the UK regulator, Ofcom has published a consultation on whether spectrum charges should be levied on national broadcasting and has invited interest in a second phase of licensing for local TV services.

The spectrum consultation — encompassing digital terrestrial TV (DTT), local TV and digital audio broadcasting (DAB) — proposes to introduce spectrum charges for all three services from the end of 2014. Ofcom notes that currently, digital broadcasters don't pay cost-based fees for their spectrum licences. It is proposing to set charges at an amount appropriate for it to recover the costs it incurs in its regulatory management of the relevant spectrum, the level of which it will also consult on later in 2013.

The consultation will consider whether Ofcom should apply charges at a higher level. In an official statement setting out its position, it said: “In many cases, we set charges by establishing the ‘opportunity cost’ of the spectrum, which is the value that alternative users might be prepared to pay for the spectrum. We refer to this as administered incentivised pricing (AIP). AIP is used to encourage more efficient use of spectrum, which is a limited resource with high levels of demand in certain frequency bands.”

The regulator expects to introduce AIP for national DTT by around 2020, but currently has no plans to implement AIP for DAB and local TV services.

With regard to the latter, Ofocm has invited expressions of interest to offer local TV services in 30 locations across the UK, ahead of a second phase of licensing. Earlier in March 2013 Ofcom finalised its first phase of licences for the larger conurbations in the UK and is seeking expressions of interest from potential applicants in 28 new locations, mainly covering larger towns and small cities, as well as for Swansea and Plymouth, which were advertised in the first round but received no applications.

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