Ministry of Defence offers luvvies reprieve
Military all that stands between theatricals and free market
UK regulator Ofcom has published detailed proposals for the entertainment industry's spectrum usage, making it clear that the Program Makers and Special Events crowd will be thrown to the open market come 2018.
PMSE users connect microphones, talkback systems and wireless cameras over radio spectrum licensed from the JFMG (Joint Frequency Management Group), and are billed on the cost of administrating the licences rather than Ofcom's preferred model, where users pay the perceived value of the spectrum. The regulator does concede, however, that having the MoD as the primary user of most of the spectrum reduces that value significantly.
The JFMG currently manages the spectrum for Ofcom, and will no-doubt be taking part in the proposed beauty contest to pick a successor, but that successor will be expected to do a great deal more than the paper-work for which the JFMG is responsible. The new Band Manager role will involve paying Ofcom something approaching market rate for the spectrum currently used by PMSE and selling that on to end-users, who will have to stump up increased spectrum costs as well as a return on investment for the Band Manager.
In the report, (pdf), Ofcom claims to understand that the PMSE industry can't hope to compete financially with mobile-phone or TV broadcasters that might have other uses for the bandwidth. The regulator's solution is to phase in the higher rates and insist that the Band Manager provide priority use to PMSE customers, but only until 2018 - after that all bets are off.
There is, or used to be, an argument that West End theatre and it's ilk should be protected in return for bringing in tourists that benefit the whole of London - the radio spectrum used on stage benefits hotels, travel companies and other attractions which make no contribution to the cost. That argument finds no place in the consultation: Ofcom's job is to ensure efficient use of spectrum, not protect the UK tourist industry, and the regulator reckons that only by charging proper rates will users be incentivised to squeeze more functionality out of less bandwidth.
That means Administered Incentive Pricing (AIP), where Ofcom works out what the spectrum would be worth on the open market and charges that amount - though in this case those higher charges will be phased in, with the price rising no more than 40 per cent a year. But Ofcom has allowed for the fact that some of the spectrum used for PMSE isn't actually very desirable - slipped between DTV channels, or occupied by the military as a primary user - forcing the secondary user to deal with, and not produce, interference - which reduces the value considerably.
Where no such problems exist the values are really high - PMSE users paid £102,000 during 2007 for channel 69 (854-862MHz), while AIP puts a value of £24m on that space. That's an extreme example, and Ofcom has already proposed moving channel 69 users to channel 38 (606-614MHz) so the former band can be sold off.
Conversely, some bands, such as 47-62MHz, are considered to have no commercial value at all, given the restrictions the MoD places on their use, and a few (very few) have a commercial value lower than users are already paying to the JFMG for the cost of administering the band - notably 7GHz and 8-12GHz.
But on the whole the proposal recommends that PMSE users are going to have to pay more for their spectrum in future. The Band Manager that Ofcom selects is also going to be heavily restricted by the amount they can charge and the requirement to give PMSE priority access - but only until 2018. After that, Ofcom is hoping that the industry will be ready to fight for their spectrum on the open market like everyone else.
Anyone fearing a massed BAPA* revolt has until September 7th to respond to the consultation, which expects to see a Band Manager selected some time next year. ®
*BA in Performing Arts - like a degree, only with more interpretative dance.