Charges in offing for users of radio spectrum

The Government yesterday revealed plans to introduce market pricing for the allocation of scarce radio capacity in the UK, in a move aimed at reducing congestion, increasing spectrum efficiency and ushering in the digital revolution.

Initially, the proposals would exclude commercial broadcasters but would affect mobile phone operators, couriers, taxi services and other licensees. Mobile phone users, for example, could see the price of calls rise by a few pence, if the policies outlined in a new White Paper, Spectrum Management: into the 21st Century, are adopted.

But the Department of Trade and Industry, which has responsibility for licences issued under the Wireless Telegraphy Act (1949), said most users would not pay more for licences. "The objective is not to increase revenue but to manage the spectrum more efficiently," a DTI spokesman said.

Unveiling the White Paper yesterday, Ian Lang said the proposals would "improve the way in which the finite resource of the radio spectrum is managed so that future growth can be accommodated."

Commercial radio and television broadcasters would not be affected by changes, as they are already licensed under the Broadcasting Act. The BBC would also be excluded. "We do not intend to ask [licence holders] to pay twice for their licences," the spokesman said.

However, market pricing - including the likelihood of auctions - could help accelerate the transition to the digital world, by ensuring that digital capacity for television and radio was priced far lower than analogue.

The Government hopes that differential pricing will make digital services, including digital terrestrial television, more attractive. The private sector could even end up subsidising the introduction of digital receiving equipment to encourage takeup rates, the DTI said.

The Government is keen to free up analogue capacity, which could then be used for new services. But it has been battling scepticism about the viability of digital terrestrial television among leading commercial advertisers.

If at least 50 per cent of the country adopts new digital terrestrial services, the Government might then introduce market pricing to allocate the freed analogue capacity.