Submission on Radio Spectrum Green Paper

15 April 1999 - A SUBMISSION BY AER TO THE EUROPEAN COMMISSION REGARDING THE GREEN PAPER ON RADIO SPECTRUM POLICY IN THE CONTEXT OF EUROPEAN COMMUNITY POLICIES SUCH AS TELECOMMUNICATIONS, BROADCASTING, TRANSPORT, AND R&D

INTRODUCTION

The Association of European Radios (AER) is a Europe-wide trade body representing the interests of private commercial radio operators in Germany, France, Spain, Portugal, Italy, Greece, The Netherlands and the UK.

AER welcomes the initiative taken by the European Commission through the Green Paper on Radio Spectrum Policy. This issue is essential for the development of the radio sector as a whole and, in particular, for private radios that historically have always had fewer privileges than their public competitors in terms of access to frequencies.

Spectrum policy is very crucial when evaluating the transition from analogue radio to digital radio. Professionals in the sector have identified the shortage of frequencies for digital radio as one of the main obstacles for the digitisation of this medium.

Radio is embracing new technology, presenting itself as a digital media through the DAB (Digital Audio Broadcasting) system. However, for the final launching of this technology, European solutions for DAB frequency shortages need to be sought as a matter of priority.

All this to protect radio from becoming an obsolete medium in a convergent world. The role of radio in the political, economical, cultural and social life of the EU should remain undiminished. Also its economic importance in terms of advertising revenues and audience makes this medium a very valuable one.

Before developing our position concerning spectrum policy, AER wants to stress once again, as in other submissions to the Commission

1. the need for radio to be seen as a separate and unique medium in a converging world, with its own cultural features (different from those of television). No medium is more independent, trusted and easy-to-use. Radio is for everybody everywhere.

EU POLICY ON RADIO SPECTRUM: ISSUES FOR COMMENTS

ISSUE 1. Strategic planning of the use of radio spectrum

Strategic Planning of Spectrum

Frequency allocation certainly requires a long term strategic planning of the use of radio spectrum and international co-ordination. It is clear that strategic planning of spectrum goes beyond European considerations, however, the European Commission has a role to play in co-ordinating the 15 Member States’ positions so that European priorities, technologically speaking, are well defended in international forums when planning the use of radio spectrum. This would help European technologies (that have been partly funded by the EC, i.e. DAB Eureka 147) to take off and would reinforce markets.

Also, it is in the Commission’s remit to safeguard the European single market. Therefore, this institution should make sure that the technical decisions taken in the CEPT are properly implemented in the different Member States without causing any istortion in terms of competition. AER wants to stress that, historically, public radios have generally had priority to access frequencies.

In particular, for the radio sector, DAB frequency shortages need to be resolved as soon as possible. Without this, confidence in this European technology and its credibility will be questioned with a significant downside for the future of digital radio.

The research and development of new broadcasting technologies need to be sustained with clear political actions such as an effective strategic plan for frequency allocation. In order to ease the market growth of new technologies, service providers and equipment manufacturers need to know exactly what the allocation of frequencies will be like. A pan-European harmonisation of frequency plans is necessary in order to allow a coherent evolution of services and products. Strategic planning of the use of radio spectrum will allow commercial and non-commercial users to benefit from a stable environment, which protects investments meanwhile favouring the evolution and development of existing and new technologies.

Community approach to support the transition from analogue to digital forms of transmission

Considering the evolution of radio broadcasting from FM broadcasting to DAB, a common Community approach must necessarily be part of the strategic planning of radio spectrum. Currently, radios (public and private) have only a limited number of frequencies to implement the new digital technology. The international plan foresees the use of band VHF-III and UHF-L band for DAB broadcasting (Terrestrial DAB). Due to the performances of the system, unfortunately, L band is of limited value for extensive terrestrial use. The limited coverage area of each transmitter involves higher investment costs when developing a broadcasting network. L band is possibly suited for satellite based services with international coverage or for limited area coverage. Only local services (for none metropolitan local areas) can be cost effectively implemented in band UHF-L. Other services (i.e. inter-metropolitan, regional, nationwide) require the use of band VHF-III. Up to now, the haphazard development in the management of the frequency spectrum has been one of the main barriers for the implementation of digital technologies among broadcasters.

The Wiesbaden plan has co-ordinated one block in each band for each area and/or region. It is true that inside the plan the rules for the implementation of other blocks not co-ordinated have been outlined, but the final result has led to difficulties. The number of available blocks needs to be increased. The poor response from the commercial broadcasting sector, from the receiver manufacturers and from the market is caused by the small amount of digital services.

 At present, listeners enjoy many different programs from public and private stations giving them plenty of choice. A wide number of different radio formats (i.e. classical, pop, and folk music, news with different editorial lay-outs and others) target different types of listeners. Where only one DAB multiplex is operating this tends to be assigned to the public sector and does not provide any new appeal. Even the good reception quality is not enough to trigger the purchase of the receivers if the choice of radio programs remains the same.

Currently, to speed up the development of DAB in Europe, AER believes that all efforts should be aimed at overcoming the difficulties in the allocation of new blocks in the available spectrum and that digital radio broadcasting should be defined as primary service in band UHF-L as well as in band VHF-III. This could simplify and speed up the migration of existing FM services to the better technology as well as allowing the creation of new services.

Furthermore, a Community approach will be needed to support the introduction of spectrally efficient technologies and the transition from analogue to digital forms of transmission. AER considers that the European Commission could play a very important political role in promoting the benefits of the transition from analogue to digital radio.

Concerning the establishment of a switch-off date, AER believes that the Commission should ease this but should not fix a date. In fact, the uncertainties of the market and the economic and financing problems confronted by private radios are creating a real obstacle to the transition to digital. Therefore, as we said earlier, the Commission should play a role of “co-ordinator”, making sure that the transition takes place in all Member States in a coherent and harmonised way, but not forcing operators until spectrum is available for all those that need it (some radio services will not have the spectral means to make the transition for some time to come).

ISSUE 2. Harmonisation of radio spectrum allocation

It is clear that for Pan-European services a harmonisation of radio spectrum allocation is needed in order to avoid market inconsistencies. However, even for media, such as radio, that operates for the moment mainly at national or regional levels, a certain degree of harmonisation in the different countries is necessary to prevent single market problems.

AER agrees with the Commission’s proposal “to make the implementation of CEPT measures obligatory by a specified deadline and to oblige Member States to inform the Commission so as to publish national implementation measures”. This information would provide operators with a clear and transparent picture of the European market and therefore would facilitate trans-frontier investments.

AER believes that it would be useful for the Commission to open a debate to draft a set of common criteria for Member States that will guarantee a minimum balance between commercial and public interests in terms of spectrum allocation. This will avoid CEPT technical decisions being not properly implemented, as is the case in several EU countries as exemplified below.

For example, in the Flemish community (in Belgium), only the public radio broadcaster has been allowed to use the existing digital radio block. This situation completely prevents private radios from developing a digital network in Belgium. In Italy, the public broadcaster RAI is using for TV services certain frequencies that were recommended by the CEPT to be used for digital radio and do not show any willingness to free them up. Also, RAI uses a large part of L Band for an internal connection between Milan and Rome. These uses block the development of the digital radio market.

ISSUE 3. Radio Spectrum assignment and licensing

Access to Frequencies

Regarding access to frequencies (both FM and DAB), the current procedures followed by some countries show that public radios have “priority” over private radios. Not all Member States have an independent institution in charge of controlling and eventually allocating frequencies.

Normally, the executive body carries out this task directly. In most cases, it is the State who “judges” and is “judged”. The State “judges” because it determines the conditions of allocation of frequencies, and at the same time is “judged” because it is also owner of radio stations, positioning itself in competition to the private sector, particularly if it benefits also from revenues from advertising.

For the future, we propose that, since digital radio DAB is essentially an enhanced form of transmission, rather than an alternative or new technology, the right to provide DAB services should be automatically available to existing broadcasters as the first step in its introduction. Established broadcasters are best placed to introduce digital broadcasting to the public, as they have proven market skills and the necessary industry experience to judge whether simulcasting, different programming mixes, or other service improvements are more likely to attract audiences to DAB.

Ownership and control arrangements for DAB should balance the legitimate concerns of existing broadcasters and aspirant broadcasters with the interests of the consumers of the new service. Care should be taken to prevent monopolies and stabilise access and user costs.

Common principles for the award of licences

AER believes that divergent licensing conditions in European sovereign states may deter market entry and act as a barrier to the internal market. Where such barriers are identified, they would have to be justified by a public general interest objective and be proportional to that objective. A common set of principles across the Community should be applied. We recommend that:

  • the awarding authorities should be independent from actors in the sector;·
  • the procedures should be transparent and non-discriminatory, set against defined timetables, leading to decisions which should be open to appeal;
  • any fees associated with a licence should be in proportion to the level of effort involved in administering the licensing process, and not constitute a discriminatory levy on expected profits; and
  • notwithstanding the previous principle, fees should, in the case of licensing of radio-frequency, be set at a level which encourages the efficient use of the resources allocated.

Efficient use of radio spectrum for the different types of services

Different mechanisms can be used to assign radio spectrum. For AER, spectrum assignment should be based not only on financial issues but also on the type of service provided. A clear distinction should be made between communications “point to point” and communications “point to multi point” (such as radio broadcasting).

AER agrees with the Commission’s approach presented in its Communication “Results of the Public Consultation on the Green Paper on Convergence” (COM (1999) 108 final) that states that transport (carriers) and content should be separately regulated. For AER, in the case of digital radio, it is also important to stress that broadcasters, and not telecom operators, should control the multiplexes. This will defend the independence of radio and will avoid one telecom giant, with control over national, regional and local broadcasters on one hand and programming on the other, distorsioning market and destroying the existing media pluralism.

A service-based criterion will protect the providers of services of general interest. In this context, AER supports the European Commission in its Communication entitled “Services of general interest in Europe” in which radio services are included and considered as “services of general interest” without making distinction between private and public broadcasters.

4 in which radio services are included and considered as “services of general interest” without making distinction between private and public broadcasters. For this reason, AER does not agree with what is stated at the end of the Footnote 19 of the Green Paper: “where higher values were attached to radio spectrum, provision should be made to ensure that certain public service broadcasters could still obtain frequencies at an affordable price”. AER believes that all radios, public and private, participate in the same way in the objectives of pluralism, ethics of information, respect of moral and democratic values, protection of the individual, as well as the promotion of the consumer interests. Therefore, both private and public radios should have equal access to frequencies.

As indicated earlier, AER is against the principle of auctioning frequencies because this will lead to high prices and will not guarantee an efficient use of the spectrum.

Concerning radio broadcasting, AER is not in favour of separating the awarding of radio spectrum and the granting of service authorisations or licences. As we said earlier, frequencies should be directly linked to services. Because the great importance of content, frequencies should not become more goods open to trade.

Also, processing licence applications at national level should not delay the introduction of a service. For example, in Spain, the process of assignment of a FM licence can take between one and four years, subtracted from its licence period of ten years.

ISSUE 4. Radio equipment and standards

Technical Standards

The Eureka 147 system – DAB was developed by a consortium of European operators with EC financial support. The ITU and European companies have recommended this system for its technical excellence.

Therefore, it is important that the European Commission endorses DAB as a common European standard for terrestrial digital radio. DAB could also be considered in the recommendations of the revised Directive on Standards. A declaration from the Commission to the Member States stating that a common standard is needed for digital radio broadcasting would create a strong investment environment and would help the migration towards the agreed common standard.

Digital Radio Equipment

Receiver manufacturers, after some years of delay, are now developing some interesting receivers. Five brands have started their promotion campaigns during 1998 in Italy, the UK, Sweden, France and Germany. In particular, Pioneer, Kenwood, Bosch/Blaupunkt have launched their DAB receivers. Clarion and Grundig are following. Also other companies are going to meet their commitment to the launch of digital receivers. Sony and JVC have confirmed their intention.

AER recognises that the receiver manufacturers have taken some encouraging steps (although not enough) and welcomes the EACEM statement in favour of EU147-DAB as the only reasonable system for digital radio broadcasting now available and affordable.

But this is not enough. Together with the growth of new broadcast services, an appealing choice of simulcast programs will lead to a critical mass triggering the adoption of the new system. A decrease in DAB receiver pricing will be of crucial importance. This can only happen if more services are developed and therefore there is a prompt full use of available spectrum.

Harmonisation between alphanumeric displays (numbers of characters, typically 2 x 16) and screens (number of pixels) is required. For this purpose, co-operation between ERO, the EU-147 project, broadcasters (both private and public) and manufacturers should be encouraged. Car navigation platforms are now being introduced and at present different screens are being used. An agreed standard will help broadcasters as they develop new broadcasting data services.

As a last point, AER believes that any barriers to free equipment movement across national frontiers should be removed. This is an inherent part of radio broadcasting as a universal activity that offers listeners the freedom of choice in different countries. Considering that one of the most important radio features is mobility, the use of radio receivers outside the countries where they were purchased should be possible.

ISSUE 5. The institutional framework for radio spectrum co-ordination

The CEPT provides in principle a satisfactory framework for providing technical requirements, result of a process of evolution and co-operation among countries.

At political level, AER stresses again that the European Commission has a role to play in co-ordinating the 15 Member States’ positions in order to strengthen the defence of European interests at international level. On one hand, to protect European technologies from being overtaken by foreign competitors and, on the other, to defend those public interest objectives that are important for European citizens.

The Commission should use the necessary information (from the CEPT) to discuss both current and future radio spectrum availability for the Community as a whole. This does not mean that the Commission will be responsible for the allocation of frequencies, this means that the Commission should be well informed of the needs of European operators in order to be able to co-ordinate all EU positions before CEPT or ITU negotiations.

The Commission should follow more actively the CEPT and ITU discussions, and participate as much as possible in their meetings.

The European Commission should guarantee that the technical decisions taken in the CEPT are properly implemented in the different Member States without causing any distortion in terms of competition or single market issues.

Conclusions

Summarising, AER believes that the European Commission has a role to play:

- in co-ordinating the 15 Member States’ positions in the CEPT when planning the use of radio spectrum;
- in making sure that the technical decisions taken in the CEPT are properly implemented in the different Member States without causing any distortion in terms of competition;
- in ensuring openness and transparency by Member States in the implementation of decisions taken by the CEPT. This might include reports or timescales of implementation;
- in opening a debate to draft a set of common criteria for Member States that will guarantee a minimum balance between commercial and public interests in terms of spectrum allocation;
- in promoting the benefits of the transition from analogue to digital radio and making sure that this transition takes place in all Member States in a coherent and harmonised way;


- in ensuring openness and transparency by Member States in the implementation of decisions taken by the CEPT. This might include reports or timescales of implementation;
- in opening a debate to draft a set of common criteria for Member States that will guarantee a minimum balance between commercial and public interests in terms of spectrum allocation;
- in promoting the benefits of the transition from analogue to digital radio and making sure that this transition takes place in all Member States in a coherent and harmonised way;

- in endorsing a common standard for terrestrial digital radio in order to create a strong investment environment in Europe;

- in removing barriers to free equipment movement across national frontiers;

- in enhancing its observer role by investing more time and resources into spectrum co-ordination and management. More active participation in the CEPT meetings.