Spectrum sell-off: Audio feels the pinch of sound spectrum sale

It’s already been a long-running, arduous issue, but the impact of the tussle between av and the government over the sound spectrum sale continues to boil down to one thing: the government standing to profit from a new radio spectrum digital dividend at the expense of av production and rental companies, manufacturers and users.

Manufacturers and equipment suppliers have been hit hard by Ofcom plans to switch the use of radio microphones from channel 69 to channel 38. With the move not scheduled for completion until after the London Olympics in 2012, nobody in the £15bn programme-making and special events (PMSE) sector is going to buy radio microphones any time in the next two years; most are waiting for funding and compensation plans to be finalised, for suitable equipment to be made available by the manufacturers, and for the newly allocated spectrum to be cleared for their use.

Ofcom’s own figures, released when the process kicked off, forecast the take-up of radio mics for PMSE use would grow by 25 per cent between 2006 and 2009 and by 15 per cent between 2010 and 2012. That growth has been curtailed and demand for new equipment has disappeared.

Ofcom has now released details of how the new spectrum is going to be allocated and managed, and the terms of compensation for existing users. However, manufacturers, PMSE users and their lobbying body, the British Entertainment Industry Radio Group (BEIRG), are far from happy.

‘Ofcom and the Government agreed to the principle of putting a funding mechanism in place to cover the costs of migration by paying to replace affected equipment,’ says a BEIRG spokesman. ‘Ofcom has published a consultation – Clearing the 800 MHz band; Funding for programme making and special events – setting out its proposals by which PMSE equipment owners will be eligible for funding, and under what criteria. These criteria fall a long way short of what is required.’

In short, Ofcom is proposing that only rental companies and radio mic licence-holders who bought their equipment before June 2009 will be compensated, and they will only be compensated for the residual value of equipment that becomes obsolete after the 2012 change over.

When Ofcom originally set out its plans to change spectrum allocations, making radio mics operating in channels 61-69 obsolete so that it could clear the channels to make them available for mobile broadband, the industry feared the worst, imagining cabled mics would replace wireless. Being able to operate up to eight mics at a time on channel 38 has allayed some fears, but both technical and financial issues have still not been resolved.

‘We will be operating in a severely constrained spectrum,’ says Alan March, a business development specialist at Sennheiser. ‘It’s an issue for all manufacturers – the funding plans will affect people’s livelihoods and there is still a fundamental issue of how much spectrum access we will have and what the quality of that spectrum will be. If a more liberal trading environment is set up it will slowly erode the “pot” of spectrum available to PMSE.’

Commercially, the protracted Ofcom deliberations have been a disaster. ‘It’s not completely stopped radio mic sales, because if you operate nationally you still have no choice but to buy channel 38 equipment,’ says March.

But most rental companies – the most significant av users of radio mics – have stopped buying. ‘We have restricted spending (on radio mics and comms equipment) and will continue to do so until we are sure new equipment will be usable post-2012,’ says Blitz Communications director Chris Jordan. Dimension Audio project manager Stuart Rolly concurs: ‘We haven’t bought any radio mics for two years now – it would be foolish.’

For the av and event rental houses, the uncertainty is the worst thing. ‘We usually use channel 60, but a lot of mics can go from 60-64, or 67-69, so we have been able to use them across the world,’ says Rolly. ‘Now we’re going to have to ask what we can do where, and whether we will get any grants.’

Things may become even worse in the community and commercial sectors, where it will be hard for users to get funding or to replace existing systems with the more expensive channel 38 hardware.

With government in its present mood, the chances of even the £18m of hard cash that Ofcom reckons is needed (a conservative figure, according to the industry) are receding. As the whole move had been prompted by the digital television switchover and the prospect of a high-priced auction of spectrum to mobile operators, it’s no wonder the UK entertainment industry is aggrieved.

Meanwhile, the move to clear existing channels so they can be sold to mobile broadband operators has gathered pace across Europe, with Germany, France, Spain and the Nordic countries joining the bandwagon.

TIMELINE

2004: First Spectrum Framework Review published, with no provision for PMSE use

2005: First BEIRG responses

2007: Ofcom publishes Digital Dividend Review and undertakes specific PMSE consultation

2008: Ofcom publishes technical proposals for move to channel 38; announces band management plans

2008: First regional clearance of channel 38 as digital television switchover starts

2009: Ofcom publishes funding plans and plans for spectrum management for Olympics; BEIRG publishes specific PMSE funding response in September

2012: Official clearance of current traffic on channels 38 and 69 to take place after Olympics