Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Reaping the full benefits of the digital dividend in Europe: a common approach to the use of the spectrum released by the digital switchover
Date: 2007-11-13
Institutions: European Commission
Subjects: digital divide, economic and social cohesion, high-definition television, information policy, information technology, radio telecommunications, transmission network

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 13.11.2007 
COM(2007) 700 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Reaping the full benefits of the digital dividend in Europe: 
A common approach to the use of the spectrum released by the digital switchover 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Reaping the full benefits of the digital dividend in Europe: 
A common approach to the use of the spectrum released by the digital switchover 

(Text with EEA relevance) 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

The promise of the digital switchover: the “digital dividend”..................................... 3 

What is the digital dividend?........................................................................................ 3 

A resource with exceptional social, cultural and economic value ............................... 4 

Only EU coordination can unlock the full potential of the digital dividend................ 6 

Moving towards common spectrum planning.............................................................. 7 

Conclusion.................................................................................................................. 10 

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1. 

THE PROMISE OF THE DIGITAL SWITCHOVER: THE “DIGITAL DIVIDEND” 

The  switchover  from  analogue  to  digital  terrestrial  TV  by  the  end  of  20121  will  free  up  an 
unprecedented  amount  of  spectrum  in  Europe  as  a  result  of  the  superior  transmission 
efficiency of digital technology. This spectrum is known as the “digital dividend”. 

The digital dividend is a unique opportunity to meet the fast growing demand for wireless 
communications services2. It opens up sufficient spectrum for broadcasters to significantly 
develop  and  expand  their  services  while  at  the  same  time  ensuring  that  other  important 
social and economic uses, such as broadband applications to overcome the “digital divide”3, 
have  access  to  this  valuable  resource.  The  digital  dividend  therefore  potentially  creates  a 
“win/win” situation for all interests. Action in this area would support the i2010 initiative4, 
part of the renewed Lisbon strategy, which emphasises the importance of ICT in delivering 
growth and jobs as a major driver of innovation and productivity gains. 

However,  the  benefits  of  the  digital  dividend  can  only  be  fully  reaped  if  the  focus  is  on 
seeking  the  most  valuable  applications  for  the  spectrum  without  preconditions.  This 
Communication thus proposes coordinated action at EU level in order to ensure optimal use 
of the dividend from a combined social and economic perspective. 

2. 

WHAT IS THE DIGITAL DIVIDEND? 

The  digital  dividend  can  be  described  as  the  spectrum  over  and  above  the  frequencies5 
required  to  support  existing  broadcasting  services  in  a  fully  digital  environment,  including 
current public service obligations6. 

More TV channels with less spectrum 

Commercially  available  digital  compression  systems  already  allow  the  transmission  of 
between 6 to 8 standard digital TV channels in the spectrum previously used by one analogue 
TV channel7, and such efficiency gains are expected to continue increasing in the future. The 
UK for example is planning to provide 45 TV channels in much less spectrum than previously 
used for the equivalent of 7 national analogue broadcasting channels8, and is considering the 
introduction of up to twenty additional TV channels in the excess frequencies. In other terms, 
the digital dividend should exceed the spectrum currently available for GSM systems in most 
Member States. 

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8 

COM(2005)  204  —  Communication  on  “Accelerating  the  transition  from  analogue  to  digital 
broadcasting”. 
As also recognised by the European Parliament, see EP Resolution “Towards a European policy on the 
radio spectrum” (14.2.2007). 
COM(2006) 129 on “Bridging the Broadband Gap”. 
COM(2005) 229 on “A European Information Society for growth and employment”. 
Part of the spectrum from 174 to 230 MHz (VHF) and 470 to 862 MHz (UHF).  
In  addition,  several  Member  States  have  identified  the  so-called  “interleaved  spectrum”  (or  “white 
space” between two TV coverage areas) as a potentially important complement to the digital dividend. 
In the case of High Definition TV, spectrum gains are reduced since more information is transmitted. 
However, it still requires less spectrum than analogue television. 
Before  digitisation,  there  were  5  national  channels  in  the  UK  and  some  limited  regional  channels 
amounting to the spectrum equivalent of one to two national channels. 

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Spectrum of “premium” quality 

Not all spectrum bands offer the same physical characteristics: higher frequencies do not carry 
signals as far, and do not penetrate buildings as easily, and lower frequencies have capacity 
limitations and create more interference. The spectrum of the digital dividend is particularly 
attractive  because  it  is  part  of  the  “best”  spectrum  located  between  200  MHz  and  1GHz, 
offering  an  optimal  balance  between  transmission  capacity  and  distance  coverage.  Its  good 
signal propagation characteristics entail less infrastructure to provide wider coverage, which 
reduces cost and improves service, particularly in ensuring communications inside buildings 
and reaching out to remote populations in rural areas. 

But currently highly fragmented  

The  spectrum  making  up  the  digital  dividend  is  currently  highly  fragmented  into  relatively 
narrow  bands,  scattered  over  many  frequencies,  and  intertwined  with  digital  broadcasting 
channels.  This  is  a  consequence  of  spectrum  planning  options  adopted  at  the  ITU  Regional 
Radiocommunication  Conference,  which  produced  an  international  plan,  the  Geneva  2006 
agreement,  on  the  basis  of  traditional  broadcasting  use9.  Some  flexibility  is  provided  in  the 
Geneva agreement to open up the spectrum to other uses. However, this flexibility is limited 
under the existing technical conditions and, in practice, the current situation is not conducive 
to the allocation of this spectrum to more efficient alternative uses. 

3. 

A RESOURCE WITH EXCEPTIONAL SOCIAL, CULTURAL AND ECONOMIC VALUE 

The  digital  dividend  must  also  be  seen  in  the  wider  context  of  the  overall  balance  between 
supply and demand for radio spectrum. This is a persistently scarce public resource for which 
there  is  an  ever  growing  demand  in  modern  society:  it  underpins  every  type  of  wireless 
service from professional use such as radio-navigation, satellite systems or radar to consumer 
applications  like  broadcasting  or  fixed  and  mobile  communications.  It  is  estimated  that  the 
total value of electronic communications services that depend on use of radio spectrum in the 
EU exceeds € 250 billion, which is about 2.2% of the annual European GDP. This essential 
role  of  radio  spectrum  as  an  enabler  for  growth  was  also  recognised  in  the  i2010  initiative, 
which  stresses  that  more  effective  management  of  spectrum  would  boost  innovation  in  ICT 
and help provide more affordable services to European citizens. 

It  is  therefore  in  the  public  interest  that  the  digital  dividend  is  managed  as  efficiently  and 
effectively as possible to satisfy the maximum demand, and that obstacles to its efficient use 
be removed. This objective is one of the fundamentals of EU spectrum policy and forms part 
of  the  main  Commission  proposals  in  the  current  review  of  the  regulatory  framework  for 
electronic communications services. 

If  the  digital  dividend  is  properly  organised,  the  range  of  possible  uses  is  very  wide,  as 
virtually  all  common  wireless  applications  could  make  use  of  this  part  of  the  spectrum. 
However,  the  most  promising  of  these  potential  uses  belong  to  the  category  of  electronic 

9 

COM(2005)  461  on  “EU  spectrum  policy  priorities  for  the  digital  switchover  in  the  context  of  the 
upcoming ITU Regional Radiocommunication Conference 2006 (RRC-06)”. Details on the Conference 
at http://www.itu.int/ITU-R/conferences/rrc/rrc-06/index.asp. 

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communication services10. There are at least three broad categories of services for which the 
spectrum of the digital dividend would be well suited. Some are already being considered by 
several Member States: 

(1)  Wireless broadband communications. “Ubiquitous broadband access for all” is the 
next  challenge  for  the  information  society.  Wireless  access  is  probably  the  most 
promising  means  to  bridge  the  “broadband  gap”  and  overcome  the  “digital  divide”, 
especially in remote and rural areas11. Access to broadband communications can have 
a  significant  impact  on  the  competitiveness  of  the  European  economy12  in  terms  of 
productivity  gains  and  social  impacts.  Wireless  also  provides  an  alternative  platform 
that  would  increase  competition  and  speed  up  broadband  deployment.  Wireless 
broadband  communications  also  have 
support  EU-wide 
interoperability  of  essential  public  safety  applications  such  as  public  protection  and 
disaster  recovery  (PPDR)  services.  The  same  spectrum  could  also  be  shared  to 
improve  mobile  communications  coverage,  and  in  the  longer  term  to  address 
growing  demand  for  high-speed  mobile  data  services.  Broadband  communications 
could also be used for future innovative broadcasting services. 

the  potential 

to 

(2) 

Additional  terrestrial  broadcasting  services.  Broadcasting  is  entering  a  period  of 
intense  transformation  and  high  innovation  as  it  makes  the  transition  to  digital  and 
high-definition  services.  Increasing  the  number  of  broadcasting  channels  holds  out 
prospects for increased media pluralism, growth in media content production, and 
higher-quality, more interactive services for viewers. It is therefore appropriate that 
broadcasters  should  be  able  to  claim  a  fair  stake  in  the  digital  dividend  in  return  for 
their efforts and investment in the digital switchover. 

(3)  Mobile multimedia. Among the most innovative application areas in the ICT sector 
are  mobile  TV  and  satellite-related  broadcasting  services,  which  have  impressive 
prospects13. 

In  addition  there  are  other  categories  of  use  that  already  operate  or  could  operate  in  the 
frequencies covered by the digital dividend, such as unlicensed use of spectrum14 (e.g. short-
range  low-power  devices  that  use  very  little  bandwidth  such  as  medical  telemetry,  hearing 
aids or, in particular, RFID, for which Europe’s current spectrum allocation in the UHF bands 
could limit growth and new applications in the coming years). 

The digital dividend needs to be viewed for what it is: a public resource with an exceptional 
social, cultural, as well as economic potential; for example, the gains recently estimated for 
the UK economy alone are between € 7.5 billion and € 15 billion over 20 years15. 

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15 

As  illustrated  in  the  report  of  the  French  "Commission  consultative  des  radiocommunications"  dated 
10.10.2007, available at http://www.arcep.fr/uploads/tx_gspublication/rapport-ccr-151007.pdf. 
On average, in EU-25, broadband was available to more than 90% of urban population, but was limited 
to 71% of rural population (Commission estimates, January 2007). 
Broadband is the basic infrastructure of the knowledge economy and has significantly contributed to the 
economic impact of ICT, driving half of productivity gains in modern economies in the past decade. 
For  example,  the  estimated  market  value  for  mobile  TV  alone  is  between  € 7  to  20  billion  by  2011, 
reaching between 200 and 500 million customers worldwide (McKinsey Quarterly, March 2006). 
Provision should also be made for certain analogue applications currently operating in the UHF band: 
e.g. Programme-Making and Special Events (PMSE) services or wireless microphones. 
Ofcom, UK Digital Dividend Review project. Estimate quoted as “conservative”. 

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4. 

ONLY  EU  COORDINATION  CAN  UNLOCK  THE  FULL  POTENTIAL  OF  THE  DIGITAL 
DIVIDEND 

Europe is confronted with the need to ensure that optimal use is made of the digital dividend. 
Decisions taken in the coming months and years on organising, allocating and assigning the 
dividend  will  impact  not  only  on  the  competitiveness  of  Europe’s  information  and  media 
sector,  but  also  on  Europe’s  ability  to  innovate  in  order  to  meet  its  societal  and  economic 
challenges.  

The digital dividend knows no borders 

Radio waves are not bounded by national borders: the more powerful the transmitting power, 
the  further  signals  can  travel  away  from  the  intended  coverage  area,  risking  interference  to 
other systems operating in the same, or neighbouring, spectrum bands. Avoiding interference 
is  the  technical  justification  for  spectrum  management  and  cross-border  coordination.  This 
was also the reason for negotiation of the Geneva 2006 agreement on an international scale.  

Removing technical barriers to unlock the full capacity of the digital dividend  

As  noted  above,  the  UHF  bands  affected  by  the  digital  dividend  are  currently  scattered  in 
narrow  segments  across  this  large  body  of  spectrum,  reflecting  the  spectrum  plan  of  the 
Geneva 2006 agreement. It is therefore difficult or impossible to make alternative uses of the 
dividend.  The  spectrum  bands  liberated  are  often  too  narrow  to  be  really  cost-effective  for 
new  services  and  the  scope  for  their  development  is  further  reduced  by  the  fragmented 
implementation of the Geneva 2006 agreement at national level. As a result, innovative uses 
of the dividend, if possible at all, would be impeded by low spectrum efficiency and require 
specific adaptations of operating equipment to local conditions.  

The public consultation held by the Radio Spectrum Policy Group in the preparation of its 
opinion on the digital dividend16 has revealed that many potential uses of the dividend will 
simply not occur if access to spectrum is not better coordinated across Member States. 
This  will  in  turn  reduce  the  overall  value  of  the  digital  dividend.  Overcoming  this  major 
hurdle calls for “tidying up” the spectrum of the digital dividend in order to make it more 
usable  and  more  consistent  across  borders.  This  can  be  achieved  under  the  Geneva  2006 
agreement  in  a  manner  compatible  with  international  agreements  with  neighbouring 
countries  and  with  minor  adaptations  to  meet  internal  EU  requirements.  But  this  is  only 
possible if Member States work together and if the EU dimension of spectrum planning 
for the digital dividend is reinforced.  

Moreover, reinforced EU spectrum coordination would facilitate EU-wide interoperability, 
thus  reducing  distortions  of  competition  in  the  single  market  that  favour  certain  sectors  or 
market players and creating opportunities for existing and new entrants to launch innovative 
wireless services.  

Economies of scale and scope are critical for many potential uses of the digital dividend 

Most investments  in new wireless technologies are now conducted on a European or global 
scale. In the case of the digital dividend, many potential applications are mass market services 

16 

RSPG  Opinion  on  EU  spectrum  policy  implications  of  the  digital  dividend.  Full  text  available  at 
http://rspg.ec.europa.eu/doc/documents/opinions/rspg07_161_final_op_digdiv.pdf. 

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for which an effective internal market brought about by European coordination is critical to 
stimulate  the  necessary  investment  in  new  technology  deployment.  Innovation,  one  of  the 
cornerstones  of  the  “Lisbon  strategy”,  will  be  fully  supported  only  if  Member  States  move 
together  to  open  up  access  to  the  digital  dividend  under  consistent  and  more  flexible 
conditions.  Coordination  would  create  a  positive  momentum  to  stimulate  new  and  robust 
industrial  and  business  developments  and  provide  a  boost  to  the  economy.  A  fragmented 
digital dividend is likely to give rise only to new local or “niche” applications, which may not 
have  the  scale  required  to  be  successful.  A  coherent  approach  across  the  EU  will  also  help 
decreasing  regional  disparities  in  established  EU  policies,  such  as  e-health,  e-education  and 
other services of public interest. 

A comparison: digital dividend developments outside Europe 

The significance of the digital dividend has also attracted much attention outside Europe and 
has already been recognised by several governments in other regions of the world: 

•  In  the  US,  about  half  of  the  UHF  spectrum  will  be  released  by  broadcasters  after  the 
switch-off of analogue TV in 2009, and has already been reserved as a digital dividend for 
redistribution to new services, mainly via technology-neutral auctions due in January 2008. 
In  addition,  regulatory  plans  are  underway  to  allow  “intelligent”  devices  to  use  the  so-
called “white space” left between TV-station coverage areas. 

•  In  Japan,  significant  amounts  of  broadcast  spectrum  have  been  vacated  or  are  being 

considered for technology-neutral release via auctions17. 

The  above  steps  will  allow  those  economies  to  provide  new  and  innovative  services  and 
applications (e.g. mobile multimedia, broadband wireless access, integrated infrastructures for 
Public  Protection  and  Disaster  Recovery),  giving  a  competitive  edge  to  their  respective 
industries.  

A  common  approach  to  the  digital  dividend  will  reinforce  the  overall  competitiveness  of 
Europe in the global marketplace and strengthen the position of its telecommunications and IT 
sectors.  It  will  also  ensure  that  the  digital  dividend  spectrum  is  tailored  to  European 
requirements, and not “imposed” by successful applications elsewhere in the world. 

Europe  cannot  afford  to  stay  on  the  sidelines.  It  is  critical  to  address  strategically  the  key 
issues underlying the digital dividend. 

5. 

MOVING TOWARDS COMMON SPECTRUM PLANNING 

“Tidying up” the digital dividend spectrum  

Adequate spectrum planning is essential to ensure optimal use of the digital dividend and to 
remove any technical barriers to a level playing field between potential users.  

17 

Approximately 50 to 60 MHz. 

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Earlier  technical  studies18  initiated  by  the  Commission  have  clearly  shown  that,  due  to 
interference problems, standard digital broadcasting services and other services delivered via 
fundamentally  different  communications  networks  cannot  be  “mixed”  in  the  same  spectrum 
bands. This can be overcome by identifying contiguous or closely related spectrum bands to 
create  “clusters”  of  services  using  a  similar  type  of  communications  network.  However, 
the current fragmentation of the digital dividend does not allow clustering in common bands. 
Only a concerted effort by all Member States could permit such clustering, as there is a high 
degree of spectrum planning interdependency across borders. 

Acting together 

Accordingly,  the  Commission  is  proposing  to  move  towards  a  common  spectrum  plan  at 
EU level. This would increase spectrum efficiency above what could be achieved at national 
level, thus enhancing the overall capacity and range of uses of the digital dividend. 

Preserving flexibility to address variances at national level 

The  Commission  recognises  that  the  spectrum  situation  may  vary  in  each  Member  State 
depending  on  the  specific  broadcasting  environment,  in  particular  the  extent  of  reliance  on 
terrestrial TV, notably to support public service obligations. There are also clear differences 
of  timing  and  strategy  in  national  plans  regarding  the  digital  switchover  which  need  to  be 
considered. The common spectrum plan would therefore have to be phased in with sufficient 
flexibility  to  accommodate  legitimate  national  specificities,  such  as  local  social  and  market 
needs. Considering the fast evolution of technology, any common spectrum planning should 
also remain under constant review so that appropriate adjustments could be made as required. 

Preparing the ground 

To pave the way for a harmonised clustering of spectrum bands, the Commission proposes to 
undertake  preparatory  work  to  address  a  number  of  important  challenges.  This  includes 
determining the size, boundaries and access conditions of each sub-band hosting a particular 
type of network and associated cluster of services, as well as assessing the timing and means 
required  to  achieve  a  flexible  and  realistic  transition  to  harmonised  clustering.  The 
preparatory  work  should  also  address  the  identification  of  the  administrative  and  technical 
costs involved in displacing services to new frequency bands, when required, and the need to 
minimise these costs when unavoidable. It will also be important to pave the way for a safe 
and  responsible  deployment  development  and  deployment  of  infrastructure  solutions  and  to 
study their impact over the long-term. 

Having prepared the ground for the move to a harmonised approach, the Commission would 
then use a binding Community law instrument to adopt a clustering decision. 

18 

CEPT  Report  in  response  to  the  Commission  Mandate  on  technical  considerations  regarding 
harmonisation options for the digital dividend (Part A and Part B). 

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Establishing “application clusters” in common spectrum bands 

The proposed clustering of spectrum should apply to the main part of the digital dividend, the 
UHF band19. It would constitute a “top-level” spectrum organisation upon which national and 
EU-wide plans can be developed, defining the bounds within which national flexibility can be 
exercised by allowing for different levels of EU harmonisation for each cluster. 

Concretely,  the  clustering  should  be  based  on  three  sub-bands  for  the  three  most  common 
types of networks: 

Type of networks in each sub-band 

Degree of spectrum planning coordination 

1)  Unidirectional  high  power  networks:  (i.e. 
mainly for fixed broadcasting services): this part of 
the  UHF  should  be  used  both  to  ensure  the 
continuation  of  existing  TV  programmes  in 
digital  format20  (which  is  formally  outside  of  the 
scope  of  the  digital  dividend)  as  well  as  to  deploy 
appropriate 
accommodate  new 
broadcasting needs fitting this traditional structure 
of networks. 

resources 

to 

2) Unidirectional medium to low power networks 
(i.e.  typically  for  mobile  multimedia  services,  and 
newer 
forms  of  converged  broadcasting  and 
communications services).  

3)  Bi-directional 
low  power  networks:  (i.e. 
typically  for  fixed  and  mobile  broadband  access 
services):  this  cluster  could  also  possibly  include 
other  applications  such  as  innovative  low  power 
broadcasting services. 

National  management  (national  part  of  the  dividend  + 
continuation of national TV channels). 

The  technical  conditions  of  use  of  this  part  of  the  UHF 
would not be subject to formal EU harmonisation. It will 
therefore  continue  to  be  subject  to  individual  national 
management,  in  compliance  with  the  Geneva  2006 
agreement. 

Whenever  possible,  TV  channels  currently  operating 
outside  of  this  sub-band  would  progressively  have  to  be 
relocated within this agreed common sub-band, using the 
amendments mechanisms of the Geneva 2006 agreement. 

National  management,  combined  with  optional  EU 
coordination. 

Sub-band  to  be  available  on  a  non  exclusive  basis  to 
Member  States  electing  to  take  advantage  of  larger 
economies of scale and easier spectrum coordination for 
applications  fitting  this  type  of  networks.  It  should  also 
ensure natural convergence over time of similar services 
in similar frequencies. It could provide an opportunity for 
cost-effective deployment of mobile TV21 

EU  harmonisation  on 
implementation to cope with national constraints. 

flexible  basis,  gradual 

19 

20 

21 

The digital dividend spans the VHF and the UHF bands. The VHF band is much smaller than the UHF 
band, less attractive in terms of spectrum propagation, and hence less prone to spectrum scarcity. The 
VHF band could therefore be optimised without EU coordination. 
It is also this part of the UHF which should be used in priority to fulfil current and future public service 
obligations. 
For  details  on  the  Commission's  proposals  regarding  mobile  TV,  please  refer  to  the  Commission 
Communication on Strengthening the Internal Market for Mobile TV - COM(2007) 409, 18.7.2007. 

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For illustration purposes only, the overall clustering could look as outlined below: 

Common spectrum sub-bands (clusters) 

470 MHz <--------------------------------------UHF band-----------------------------------> 872 MHz 

SPECTRUM UNDER EXCLUSIVE NATIONAL MANAGEMENT 

SPECTRUM COORDINATED AT EU LEVEL 

Spectrum used for the continuation of existing TV 
and radio services 

Vacant spectrum 
for use as the national 
part of the digital dividend 

Example of services:  
more TV services, possibly 
HDTV 

Example of 
service:  
narrow-band 
mobile TV 

Example of services: 
wireless broadband 
access, high speed 
mobile data access 

Unidirectional Networks 
(high power) 

Unidirectional 
networks 
(low to medium power) 

Bi-directional 
networks 
(low power) 

part constituting the actual digital dividend. 

6. 

CONCLUSION 

The  digital  dividend  resulting  from  the  switch  from  analogue  to  digital  broadcasting  is  a 
unique opportunity to give impetus to the whole of the wireless communications industry as 
well  as  the  broadcasting  industry.  It  can  significantly  contribute  to  the  Lisbon  goals  of 
competitiveness  and  economic  growth  and  satisfy  a  wide  range  of  the  social,  cultural  and 
economic needs of European citizens.  

The  full  benefits  of  the  digital  dividend  can  only  be  realised  with  the  support  and  active 
cooperation of Member States and all stakeholders, and if a common approach is adopted to 
spectrum planning. 

In  the  light  of  the  digital  dividend  becoming  already  available  in  some  Member  States  and 
with the EU transition towards digital TV expected to be completed by 2012, there is urgency 
to initiate the decision process on the common approach to the use the digital dividend. 

Member States are therefore invited to 

–  Facilitate the introduction of new services by working together and with the Commission 
to  identify  common  spectrum  bands  in  the  digital  dividend  that  can  be  optimised  by 
application clusters. 

The Commission will: 

–  Prepare the required measures to reserve and coordinate the common bands at EU level. 

The European Parliament and Council are invited to discuss the common approach set out in 
this Communication and to endorse the proposed actions. 

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