Implementation of DD1 and
issues for DD2 and the TSMpackage of the EC
4th CEERWG Meeting
27th May 2014,
Bucharest
Dr. Georg Serentschy
[email protected]
Senior Director
Arthur D. Little
1
State-of-play of the availability of the Digital Dividend in EU
2
Europe towards a Telecoms Single Market (TSM)
2
2.1
The proposed Telecom Single Market Regulation
2.2
Prospect for the next regulatory review
CEE developments
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2
Introduction – Spectrum in question
The first digital dividend concerned the 790-862 MHz band, the second digital dividend will
affect the 694-790 MHz band
87 - 108 MHz
Band II
FM radio
47- 68 MHz
Band I
-
174 - 223 MHz
Band III
Telecom
Telecom
TV
Radio
Telecom
Radio
DD 1
TV
Telecom
Frequency spectrum in question
DD 2
1
790-862
MHz
Digital radio
(DAB+; TDMB)
4G
470 - 790
MHz
880-959
MHz
Band IV et V
Analogue TV
Private
broadcasting
2G
TV
(DVB-T; DVB-H)
1710-1879
MHz
2G/4G
694-790
MHz
Army; Private radio
communication;
etc.
Army; Police;
Airport; etc.
Source: Arthur D. Little analysis
Army; Police;
Taxi; etc.
1920-2169
MHz
3G
2500 2690 MHz
Public safety; Firemen;
Public transport, Radio
navigation; etc.
4G
Digital dividend
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1
Introduction – Implementation
The arrival of the second digital dividend is expected around 8 years after the World Radio
communication Conference in 2015
Implementation timeframe
 The Radio Spectrum Policy Group estimates the cross-border coordination (spectrum sharing between
neighbor countries) will take over 3 years meaning the European-level spectrum plan will not be finalized
before 2019
International
coordination
 After the European-level spectrum planning, the national implementation of the second digital
dividend is likely to take 4 more years because of strong technical and political issues:
– Radio re-designing process is likely to be complex and lengthy, all the more so as there will be a
migration to a more SFN-oriented network*
National planning
– A solution will have to be devised for actors such as theaters, wireless cameras, concert, sport events
which will be excluded from the 700 MHz band and which therefore would have to renew their
equipment, probably through a public funding
First digital dividend
 At the European level, the first digital dividend will not be fully implemented before 2015, which
corresponds to an 8-year timeframe, since the process started in 2007 (WRC-07)
First digital dividend
Q3 2010
2010
2011
2012
World Radio Communication Conference
Q1/ Q2 2015
2013
2014
2015
2016
2017
2018
Expected implementation of
Digital Dividend 2
2019
2020
2021
2022
Source: Tera consultants, Arthur D. Little analysis
* SFN: Single Frequency Network describes a broadcast network that uses the same frequency to transmit the same information
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1
Introduction – General dynamics
The WRC15 will handle the 694-790 MHz band allocation: telcos or to terrestrial TV?
Demand-side dynamics: Telcos vs DTT
First and second digital dividend
Telecom versus DTT
 The first digital dividend was decided by the International
Telecommunication Union (ITU) at the World Radio
Communication Conference (WRC) in 2007
– The 790-862 MHz band previously utilized for analogue
TV broadcasting was allocated to telecoms
 Telecom players are actively pushing for additional
spectrum allocated to telecommunications driven by EU
 A second digital dividend would affect the 694-790 MHz
band – it is on the WRC 2015 agenda
 The 2nd digital dividend will impact CEE, however past
dynamics indicate that it will take an additional 5-6 years for
the WRC recommendations to be implemented in CEE
compared to WE
and nat’l broadband plans
– Additional frequencies would enable more bandwidth to
face the significant growth in data consumption
– The UHF band provides resources with better propagation
characteristics requiring less antennas, which reduces
network Capex
 TV broadcasters defend spectrum resources to protect
the DTT platform
– The frequencies are necessary sustain DTT and provide
the population with FTA content including the key public
and commercial channels
In CEE the most prominent roadblock for allocating the 700MHz band is the usage conflict between
telecoms and digital terrestrial TV and even more prominently military air-ground communication.
Source: Arthur D. Little analysis
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1
Introduction – Spectrum for wireless broadband
There is a need of harmonization at European level on the spectrum for mobile broadband
coupled with the need to develop a long term strategy for terrestrial TV distribution
Spectrum allocation for mobile broadband and the need for a ‘global’ 700MHz band plan
Total spectrum from 400 MHz – 6 GHz
5.600,00MHz
No potential for WBB
2.648,50MHz
Already in use or future potential for WBB
2.951,50MHz
Broadband
access
In
use/available
for WBB
(Mhz)
Potential for
WBB
(near term)
(MHz)
Medium term
potential (>2015)
(MHz)
Possibly in very
long timeframe
Total (MHz)
Terrestrial
990,00
140,00
566,00
224,00
1.920,00
Satellite
173,00
0
0,00
0
173,00
WIFI
538,50
0
320,00
0
858,50
Total
1.701,50
140,00
886,00
224,00
2.951,5
Ultimately it is very likely, that conflicting demands from telcos, terrestrial TV and others can only be
resolved by highest political intervention (as it was done for the 800MHz band)
Source: “RSPG opinion on strategic challenges facing Europe in addressing the growing spectrum demand for wireless broadband” (June 2013), Arthur D. Little
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1
Introduction – Spectrum for wireless broadband
Currently approximately 20 countries have made the 800 MHz band available for wireless
broadband
Status Quo: wireless broadband in the 800 MHz band
 Only 11 Member States made 800 MHz band available for wireless broadband communication within the deadline of January 1,
2013, while half Member States have requested to postpone the release due to exceptional reasons.
 Derogation was refused in countries where the delays were due to the organization of the authorization process and not to
exceptional circumstances preventing the availability of the band.
 While benefitting from a derogation, Member States are obliged to ensure that their temporary continued use of the 800 MHz band
(e.g. for broadcasting) does not hinder the development of wireless broadband in that band in neighboring Member States
Status, or derogation requested until
Countries
N.
until January 1, 2013
DK, DE, IE, FR, IT, LU, NL, PT, SE, UK, Croatia.
11
Mid 2013
LT
1
End 2013
ES, AT, SK (no derogation granted), FI, CZ, HU (+ BE, EE - no derogation requested)
8
Mid 2014
RO, SI (no derogation granted), & PL (860-862 MHz for military use notified under Art. 1.3)
3
Oct 2014
EL (part of the band for military use notified under Art. 1.3)
1
End 2014
MT
1
July 2015
LV
1
End 2015
CY
1
2017 TBD
BG: military use notified under 1.3 RSPP
1
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1
Introduction – Status quo in WE and CEE
The coordination reform by the European Commission is impeded by the different
implementation speed and technical challenges in Western Europe and CEE
Status Quo at a glance
Western Europe
 The big picture in Europe shows clearly a
west-east and north-south gradient
 F and S are planning to grant the
700MHz spectrum in the period ‘17 – ‘20
 D and F are driving the subject as a
matter of high political relevance
 En route to implementation:
Status
 The majority of CEE countries are still busy
with the allocation of the 800MHz band
 Technical relevant issues:
– PMSE, WSD und PPDR usages
– Geographic coordination distances; for
ARNS up to 1000 km and high power
broadcasting stations up to 500 km
Challenges
Country specifics
CEE
– Implementation planned post WRC15
and after coordination
 Countries in central Europe (like Austria) are
positioned between two different areas
running on different speed and faced with
very complex coordination issues
 On hold:
– For the 700MHz band there is currently
and in the near future more observation
then implementation
Source: Arthur D. Little analysis
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1
Introduction
2
European developments
2
2.1
Telecom Single Market Regulation
2.2
Prospect for the next regulatory review
CEE developments
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10
2.1 TSM – Institutional setting
Various EU institutions with complex interdependence – Trilog discussions will commence
soon between European Commission, European Council and European Parliament
The current European institutional setting
European
Council
BEREC*
European
Commission
European
Parliament
Regulatory
guidance
RSPG**
NRAs
Upcoming Trilog discussions
*Body of European Regulators for Electronic Communications
**Radio Spectrum Policy Group
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2.1 TSM
BEREC sees further improvement potential of the European Parliament’s draft telecom law –
rules on roaming, spectrum & net neutrality subject to review
Telecom Single Market Package (TSM)
 On 11 September 2013, the EC published a
draft Regulation aiming at achieving the goal
of a Telecom Single Market (TSM) by addressing 7 different areas
 BEREC support EC’s new
draft telecom regulation in principle. However, they also addressing several
problem areas to be investigated…
 The European Parliament changed some parts of the TSM package during the 1st reading; on the European
Council level yet no clear direction is visible -> start of the Trilog to find a compromise
 Probably the revised package will be focused on three key areas of reforms:
1
Mobile roaming
2
Spectrum allocations
3
Net neutrality
Source: Arthur D. Little analysis
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2.1 TSM – Mobile roaming
Proposal on mobile roaming under criticism – BEREC raises issues regarding ease of
implementation and potential negative impacts
1
Mobile data
 European Parliament’s new proposal among others includes:
– Complexity reduction due to simplification of abolition of
retail surcharges
BEREC’s opinion
 BEREC with strong criticism regarding ease of
implementation and potential negative impacts
– Deadlines difficult to meet
– Careful choice of an appropriate mix of necessary
components of a final roaming package as well as its
synchronized introduction
– Need to synchronize different elements of new rules
– Rules could indirectly affect other markets
– Concerns that even improved proposal would significantly
undermine authorities
Proposal on mobile roaming under criticism due to doubtful ease of implementation and potential
negative impacts of current set of rules
Source: Arthur D. Little analysis
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2.1 TSM – Spectrum allocations
Proposal on spectrum allocation under criticism – BEREC warns of a spectrum release slow
down and stresses need for simpler measures as well as holistic approach
2
Spectrum allocations
 European Parliament’s new proposal among others includes:
– Reinforcement of the European Commission’s proposal to
synchronize frequency auctions
BEREC’s opinion
 BEREC has concerns and suggestions for improvement
regarding appropriate measures:
– Concerns that these auctions will hamper innovation and
regulatory advances, slowing down spectrum release
– Proposal of more targeted and simpler measures in order
to promote more efficient spectrum release
– Proposal of holistic approach that takes into account
broad range of telecom and frequency laws
Proposal on spectrum allocations under criticism while BEREC warns of a spectrum release slow
down, emphasizes need for simpler measures and holistic approach
Source: Arthur D. Little analysis
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2.1 TSM – Net neutrality
General agreement on proposal on net neutrality – however, BEREC demands further steps
and detects some inconsistencies in rules and definitions
3
Net neutrality
 European Parliament’s new proposal among others includes:
– Separation of internet access and “specialized” services
(i.e. broadband television)
BEREC’s opinion – more freedom for NRAs
 BEREC demands further steps
– European Parliament should take even further steps to
improve the proposed telecom law
– Further work to ensure that definitions and rules were legally precise, future-proof and enforceable in practice
 NRAs detect some inconsistencies in rules and definitions
– Support for separation of internet access and “specialized”
services
– Legal and policy concerns regarding proposed rules
and definitions
BEREC supports the proposal on NN, however requests further steps: move from a ‘rules-based’
approach to a ‘principle-based’ approach giving more room for NRAs
Source: Arthur D. Little analysis
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2.1 TSM – Improvement potential for EP’s draft telecom law
BEREC sees further improvement potential of the European Parliament’s draft telecom law –
rules on roaming, spectrum & net neutrality subject to review
Improvement potential for European Parliament’s draft telecom law
1
Mobile
roaming
 BEREC raises issues regarding ease of implementation and potential
negative impacts
2
Spectrum
allocations
 BEREC warns of a slow down of the spectrum release and stresses need for
simpler measures as well as holistic approach
3
Net neutrality

BEREC demands further steps to improve proposed telecom law

NRAs detect some inconsistencies in rules (legal & policy) and definitions
Source: Arthur D. Little analysis
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1
Introduction
2
European developments
3
2.1
Telecom Single Market Regulation
2.2
Prospect for the next regulatory review
CEE developments: case study on Poland
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2.1 TSM – Improvement potential for EP’s draft telecom law
The previous EC proposals for regulation review
Comparison to 2009 regulation review
2009 Review
1
Mobile
roaming
2
Spectrum
allocations
3
Net neutrality
TSM Regulation
Proposed
Result
Proposed
BEREC
Yes

Yes
 Doubts on ease of
implementation and
potential negative impacts
Yes
(pan EU
authorization)
No


 Potential slow down of the
spectrum release and
need for simpler measures
(veto power)
as well as holistic approach
Yes
Yes
 Demands of further steps
 From ‘rules’ to ‘principles’
Source: Arthur D. Little analysis
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2.2 Prospect for the next regulatory review – Prospects
Prospect
Key
challenges
for theand
nextoptions
regulatory
for development
review
Key challenges
 Europe is currently fragmented into 28 separate national communications markets
 EU rules are implemented in diverging ways
 A study commissioned by EC shows that, if the internal market for electronic communications were completed,
the EU's gross domestic product (GDP) could grow by up to 110 billion euros a year(*)
Options for development
 An ‘enhanced-BEREC’ model with a full-time Chair and renewed governance principles to be later eventually
further developed into a European Regulator taking care of the most relevant regulatory powers of the
Commission, whereas the NRAs would be subordinated to the new Agency,
or
 more harmonization powers for the European Commission (e.g. veto power on remedies and spectrum)
Source: * Ecorys, TU Delft et al., Steps Towards a Truly Internal Market for e-Communications, 2013
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1
Introduction
2
European developments
3
2.1
Telecom Single Market Regulation
2.2
Prospect for the next regulatory review
CEE developments: case study on Poland
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CEE developments: case study on Poland
In Poland, UHF bands IV & V (470-790 MHz) are currently used by DVB-T MUXes, reallocation
of spectrum is required to make space for DD2 for telecom
Regulatory dynamics for DTT: Spectrum in Poland
Frequency Spectrum
• Spectrum in this band is
used for DAB+ MUX
• There is enough spectrum
in this band either for 7
DAB+ MUX OR 3 DAB+
MUX & 1 DVB-T MUX
• Spectrum in band IV & V is currently used for DVB-T MUX 1, 2,
3, 4 as well as telecom Digital Dividend 1 (790-862 MHz)
• Post-ASO there can be two more DVB-T MUX 5, 6 OR
spectrum for Digital Dividend 2 for telecom (694-790 MHz)
• Hence, reallocation of spectrum is required to make space for
DD2 for telecom, which is possible in 2021, after expiration of
current DVB-T licenses
Telecom 4G
MUX 1
MUX 2
MUX 3
MUX 4
MUX 5
MUX 6
900,1800,2100, 2600 MHz
Telecom 3G
MUX
8
614-862 MHz (UHF Band V)
Telecom 2G
DAB
MUX
1, 2,
3
470-614 MHz (UHF Band IV)
DD1: 790-862
MHz
174-230 MHz (VHF Band III)
DD2: 694-790
MHz
3
• Band is used for mobile
telecom 2G, 3G & 4G
• 4G will potentially use
spectrum in the DD1 &
DD2 bands also
After TV ASO some capacity will be freed up in the 700 MHz band - current frequency allocation in this
band does not allow for its optimal use for telecom purposes in Poland
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3
CEE developments: case study on Poland
There is uncertainty on how and when will the 694-790 MHz band be allocated in Poland,
broadcasters and telcos are actively lobbying
Three options possible for DD2 post WRC 2015 in Poland
Scenario 1:
DD2 is allocated for broadcasting
VHF
Scenario 2:
DD2 is allocated to telecom
UHF spectrum
VHF
2013
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
2014
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
2015/
2016
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
MUX
5
2021
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
MUX
5
UHF spectrum
2013
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
2014
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
MUX
6
2015/
2016
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
MUX
6
2021
MUX
8
• DD2 is allocated for broadcasting
• Launch three additional TV MUXex:
MUX 8 in 2014, MUX 5 in 2015 and
MUX 6 in 2016
• In 2021, no reallocation of spectrum is
required as all MUXes will fit into the
existing spectrum
Source: EmiTel, Arthur D. Little analysis
Scenario 3:
DD2 is split for broadcasting & telco
VHF
UHF spectrum
2013
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
2014
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
MUX
5
2015/
2016
MUX
8
MUX
1
MUX
2
MUX
3
MUX
4
MUX
5
MUX
6
MUX
MUX
MUX
MUX
MUX
for
1 Reallocation
2
3
4 DD2
5
2021
MUX
8
MUX
MUX
MUX
MUX
MUX
forDD2
1 Reallocation
2
3
4
5
MUX
6
• In this case DD2 spectrum is allocated
to telecom use
• Launch of 1 TV MUX, reallocation of
existing UHF spectrum (MUX 1, 2, 3, 4,
5) to be able to accommodate the new
MUX after DD2 is transferred to telecom
(in 2021)
• In this case DD2 spectrum is split
between broadcasting & telecom
• Launch 2 TV MUX, reallocation of
spectrum (MUX 1, 2, 3, 4, 5, 6) needed
• Telco players use part of the spectrum
for wireless broadband
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