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Ofcom Announces New Spectrum Pricing for Digital

Charges to offset cost of regulation

U.K. communications industry regulator Ofcom, has published a new consultation on digital broadcasting spectrum charges.

First, it examines whether there should be charges for national digital terrestrial TV, local TV and digital audio broadcasting, in order to preserve “optimal use of radio spectrum,” according to

It concluded that these services should be charged for their spectrum usage, beginning at the end of 2014, as part of the effort to recoup regulatory management costs incurred by Ofcom. The rates will be determined at the end of this year.

The consultation also asks whether or not it would be appropriate to charge the services at a higher level for their spectrum usage, predicting that by 2020, the regulator will levy Administered Incentivized Pricing for national digital terrestrial TV.

“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,” Ofcom explained in the consultation. “We refer to this as administered incentivized pricing. AIP is used to encourage more efficient use of spectrum, which is a limited resource with high levels of demand in certain frequency bands.”

Because local TV and digital audio broadcasting do not require as much spectrum, Ofcom has not planned to introduce AIP for either in the future, RapidTVNews says.