Ashley Highfield Advocates Use of White Space for Broadband in UK at Edinburgh International Television Festival

In a speech at the Media Guardian Edinburgh International Television Festival, the managing director of consumer and online at Microsoft UK (and former BBC director of future media and technology) Ashley Highfield advocated the use of unused spectrum in the broadcasting bands to provide fast broadband to rural communities. This is an endorsement of the White Space initiative first proposed in the US by a coalition of corporations including Microsoft and Google. It also provides a possible alternative to the unpopular proposal made in the Digital Britain report that a charge of 6 pounds be levied on all landlines to pay for broadband expansion and upgrade. (See also the online forum on Digital Britain.)

Highfield’s prediction that the TV industry has a window of 2-3 years to create viable digital businesses, or face “a version of the iTunes moment”, has gained most media coverage.  Interesting that his speech came on the same day that James Murdoch attacked the BBC, and the provision (or in his terms the ‘dumping’) of free news and entertainment content on the internet, for hindering competition

“The corporation is incapable of distinguishing between what is good for it, and what is good for the country,” [Murdoch claimed]. “Funded by a hypothecated tax, the BBC feels empowered to offer something for everyone, even in areas well served by the market. The scope of its activities and ambitions is chilling.”

“Dumping free, state-sponsored news on the market makes it incredibly difficult for journalism to flourish on the internet. Yet it is essential for the future of independent journalism that a fair price can be charged for news to people who value it,” he said.

He added: “We seem to have decided to let independence and plurality wither. To let the BBC throttle the news market, and get bigger to compensate.”

Erica Naone has written an article (18 August 2009) on the technological issues around the white space idea in the MIT Technology Review.

Video of the whole of Murdoch’s MacTaggart lecture is available via the Guardian’s website.

The BBC’s business editor, Robert Peston, responded by reportedly engaged in a ‘slanging match’ with Murdoch.  Peston earlier delivered the Richard Dunn memorial lecture entitled “what future for media and broadcasting?”.

Digital Europe – Commissioner Reding Outlines Priorities for Next Five Years

Delivering the Lisbon Council’s Ludwig Erhard Lecture in Brussels on 9 July, EU Commissioner for Telecoms and Media, Viviane Reding, outlined the EU’s priorities in its Digital Europe strategy.  The speech is available here as html, and here as pdf.

Some highlights:

We would like to have internet broadband for all Europeans by 2010. And high-speed internet broadband for all Europeans by 2013.The “first movers” in Europe have already started implementing these targets: The French government, with its plan France Numérique 2012, is pursuing the objective to equip all French households with an internet connection of at least 512 Kbit/s by the end of 2012. In the UK, Lord Carter told us, in his ambitious Digital Britain report, that the government sets the objective to serve all British households by broadband networks of at least 2 Mbit/s by the end of 2012, eased by the creation of a Next Generation Fund. In Germany, the federal government, in its Breitbandstrategie, calls for connections of 50 Mbit/s to serve 75% of the population by 2014. Finland has even committed to a universal broadband service at 100 Mbit/s . These are examples of countries who got their priorities right. They all have recognised the need for boosting the digital economy.

To promote competitive infrastructures for a Digital Europe, there are four concrete steps we can and should take in the next months:

  • First of all, we need to bring into force the reform of Europe’s telecoms rules […]
  • Secondly, we should encourage effective competition and sustainable investment in Next Generation Networks – in particular into fibre networks instead of copper ones […]
  • Thirdly, I believe we should make 3G mobile phones services more attractive in Europe and pave the way for LTE, the next generation of mobile services […]
  • Last but not least , I believe the present economic crisis requires us to accelerate the ongoing switchover from analogue to digital TV in Europe . T he switchover will free very valuable radio spectrum, currently used by terrestrial analogue TV, for use by new communications and content services. This process has already been completed in Germany, Finland, Luxembourg, Sweden, the Netherlands, in Flanders here in Belgium as well as in major areas in Austria. The Commission estimates that t he incremental value of this spectrum for wireless broadband across the EU is between €150 and €200 billion. Appropriate European coordination of Member States’ work on the digital dividend would increase the potential economic impact of the digital dividend by an additional 50 billion between now and 2015. Every corner of Europe could reap this “digital dividend”, without it costing the taxpayer a single cent – if all EU governments act now. I recall that the United States as a whole switched to digital TV last month. I call therefore on all EU governments: Don’t wait until 2012, the EU-wide deadline for the final analogue switch-off, to bring these benefits to you businesses and citizens. Act swiftly now. Tomorrow I will present a package of draft measures in order to accelerate Europe’s digital switchover. I hope that these proposals will receive a positive reception in the public consultation and by that contribute to a more positive economic attitude. As Ludwig Erhard always stressed: 50% of macro-economics are psychology.

Digital Priorities for the next five years

1. My first and most important priority for Digital Europe is: To make it easier and more attractive to access digital content, wherever produced in Europe. The availability of attractive content that appeals to European viewers, listeners and readers will be decisive in driving further the take-up of high-speed broadband internet. It is therefore regrettable that we currently have an extremely polarised debate on the matter: While many right holders insist that every unauthorised download from the internet is a violation of intellectual property rights and therefore illegal or even criminal, others stress that access to the internet is a crucial fundamental right. Let me be clear on this: Both sides are right. The drama is that after long and often fruitless battles, both camps have now dug themselves in their positions, without any signs of opening from either side.

In the meantime, internet piracy appears to become more and more “sexy”, in particular for the digital natives already, the young generation of intense internet users between 16 and 24. This generation should become the foundation of our digital economy, of new innovation and new growth opportunities. However, Eurostat figures show that 60% of them have downloaded audiovisual content from the internet in the past months without paying. And 28% state that they would not be willing to pay.

These figures reveal the serious deficiencies of the present system. It is necessary to penalise those who are breaking the law. But are there really enough attractive and consumer-friendly legal offers on the market? Does our present legal system for Intellectual Property Rights really live up to the expectations of the internet generation? Have we considered all alternative options to repression? Have we really looked at the issue through the eyes of a 16 year old? Or only from the perspective of law professors who grew up in the Gutenberg Age? In my view, growing internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers.

I f we do not, very quickly, make it easier and more consumer-friendly to access digital content, we could lose a whole generation as supporters of artistic creation and legal use of digital services. Economically, socially, and culturally, this would be a tragedy. It will therefore be my key priority to work, in cooperation with other Commissioners, on a simple, consumer-friendly legal framework for accessing digital content in Europe’s single market, while ensuring at the same time fair remuneration of creators. Digital Europe can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers .

I will give you two examples of what Europe could do concretely for this:

  • First of all, we could facilitate the licensing of intellectual property rights for online services covering the territory of all 27 EU Member States . Today, right holders and online service providers need to spend far too much time and money on the administration of rights, instead of investing this money in attractive services. And consumers often cannot access online content if uploaded in another Member State. For online content in a single market of 27 Member States, economies of scale and consumer-friendly solutions will require a much simpler and less fragmented regulatory framework than the one of today. We had a similar problem when commercial satellite TV started more than 30 years ago. As right clearance for this per se cross-border service became increasingly complex, Europe developed the Cable and Satellite Directive and introduced a simplified system of rights clearance for the whole of Europe. I believe it is now time to develop similar solutions for the evolving world of online content.
  • Second example: We should create a modern set of European rules that encourage the digitisation of books . More than 90% of books in Europe’s national libraries are no longer commercially available, because they are either out of print or orphan works (which means that nobody can be identified to give permission to use the work digitally). The creation of a Europe-wide public registry for such works could stimulate private investment in digitisation, while ensuring that authors get fair remuneration also in the digital world. This would also help to end the present, rather ideological debate about “Google books”. I do understand the fears of many publishers and libraries facing the market power of Google. But I also share the frustrations of many internet companies which would like to offer interesting business models in this field, but cannot do so because of the fragmented regulatory system in Europe. I am experiencing myself such frustrations in the context of the development of Europeana, Europe’s digital library. Let us be very clear: if we do not reform our European copyright rules on orphan works and libraries swiftly, digitisation and the development of attractive content offers will not take place in Europe, but on the other side of the Atlantic . Only a modern set of consumer-friendly rules will enable Europe’s content to play a strong part in the digitisation efforts that has already started all around the globe.

2. Priority two on my to-do-list for Digital Europe is: preparing for a safe and consumer-friendly European space for mobile payments. Today, the lack of common EU-wide standards and rules for “m-cash” leaves the great potential of “m-commerce” and the mobile web unexploited. W e have more than 500 million mobile users in Europe. This means that Europe has the economies of scale to offer for an innovation-friendly environment that will allow transforming the mobile phone into an electronic wallet. Very quickly, we could see the mobile phone being used for buying most day-to-day items electronically, such as tickets in a station, sodas from a vending machine or flowers in a shop. This would make life easier for consumers; and open up new business opportunities for European companies.

3. My third priority for boosting the digital economy is: Europe’s digital economy should be opened up to small businesses. In Europe, we have 23 million small and medium sized enterprises (SMEs) which make up 99% of all firms. Accounting for over 100 million jobs, SMEs can be the mainspring of Europe’s economic resurgence. But in the use of productivity-boosting ICT tools, SMEs lag substantially behind big firms: only 9% of SMEs use electronic invoices, and only 11% of them have technology-based human resource management. If SMEs could access computing power over the web, they would no longer need to buy and maintain technologies or IT applications and services. Such web based services – called “cloud computing” – are the medicine needed for our credit squeezed economy: they can make businesses more productive by shifting from fixed costs (i.e. hiring staff or buying PCs) to variable costs (i.e. you only pay for what you use). However, today these new services are nearly all US-owned and US-based. Once again, the US has started to exploit a business model before Europe has managed to do so. We cannot let this continue. In my view, we need a major effort to set up Europe-hosted “clouds” to give European SMEs access to fast, open and productivity enhancing services. A recent study estimated that online business services could add 0.2% to annual GDP growth, create a million new jobs and allow hundreds of thousand of new SMEs to take off in Europe over the next five years. So what are we waiting for?

4. My fourth priority for Digital Europe is: making better use of innovative ICT solutions to meet our objectives of a low-carbon economy . This aspect is still neglected in our ongoing work to prepare with ambition for the Copenhagen Conference at the end of the year. Just consider the following: If businesses in Europe were to replace only 20% of all business trips by video conferencing, we could save more than 22 million tons of CO 2 per year. And cloud computing could, by helping to improve the efficiency of IT solutions, lead to electricity savings in computing activity of up to 80%. Let us also not forget what ICT could do for safer, smarter and greener cars in Europe. I firmly believe that Digital Europe cannot afford to turn a blind eye to its ecological potential, which in turn can open up new business opportunities for European ICT companies. We will therefore have to add some “green” to Ludwig Erhard’s social market economy.

GFC Bites TV: Canadian regulator considers one-year licence renewals

Canadian sources are reporting that the Canadian broadcasting regulator CRTC is considering issuing short-term one-year licences (rather than usual 7 year terms) when network licences come up for renewal in April. This follows release of CRTC data showing major private sector TV broadcasters profits fell by 93% in 2008. Elsewhere the union that represents many media employees is urging the regulator to protect local programming in smaller markets as broadcasters cut costs. Full story in the ChronicleHerald, with future looking even more dim for Canadian broadcasters:

The drop-off in advertising revenue for conventional broadcasters, including at CBC’s television operations, will likely accelerate due to a general slowdown in the Canadian economy.

At the same time, they face the expense of switching their systems to digital broadcasting by the end of August 2011, following the lead of American broadcasters who are to make the switch by this summer.

There is also concern about rising spend on imported vs. Canadian programming: CRTC data shows

Operating expenses increased to $2.1 billion in 2008, with the acquisition and production of programming representing 71.5% of all expenses. Investments in Canadian programming remained essentially unchanged at $619.6 million, of which $146 million was paid to independent producers. However, private broadcasters spent $775.2 million on foreign programming in 2008, up 7.4% from $721.9 million in 2007.

Canadian programming

Spending on Canadian programming included $88.3 million for drama, $90.4 million for general interest programming, $323 million for news programs, $67.2 million for other information programs, $24.7 million for musical and variety shows, $7.5 million for sports programs, and $16.6 million for game shows.

The CRTC also announced last week that it would reduce the scope of forthcoming public hearings to explore the following key issues:

  • the appropriate contributions to Canadian programming (local, priority and independently-produced programming), given the current economic conditions;
  • the terms of administration and delivery of the LPIF, including the method of establishing the base-level expenditures for the purpose of determining incrementality;
  • whether to impose a 1:1 ratio requirement between Canadian and non-Canadian programming expenditures, both on a trial basis during a short-term licence, and on a longer-term basis; and
  • consideration of the terms for the digital transition by August 2011, in light of an industry working group report being prepared for the current public process.

The one that seems to be garnering most immediate attention is the suggestion that broadcasters may be required to spend the same amount on local programming as they do on imported programming.

The financial difficulties of Canadian broadcasters may have ramifications in Australia.  The Sydney Morning Herald today reports on Channel 10’s efforts to raise $90 million through an institutional placing of 120 million new shares at 75c each. Channel 10 was placed in a trading halt yesterday, with shares trading at 93c at Monday’s close.

The fragile position of the media market and Ten’s specific situation was highlighted by the fact that the fund-raising issue was neither underwritten by a financial institution nor taken up by the Sydney-based broadcaster’s controlling shareholder, the Canadian CanWest Group.

CanWest, which is being squeezed by debt pressures in its domestic media operations and is currently selling TV operations to cut its financial exposure, will see its 56.6 per cent stake drop to around 50 per cent as a result of its decision not to put up more money.

“CanWest is supportive of the proposed capital raising but has elected not to participate,” said the group’s president and chief executive, Leonard Asper.

European ISPs to become traffic cops?

Legislation is currently being prepared for the EU, which will change the relationship between ISPs and content.  At the moment ISPs have “mere conduit” status which means that they are not responsible for what their customers actually do with content.   New legislation will turn that around and effectively make ISPs copyright cops. The intention being to regulate peer-to-peer downloading and downloading copyrighted content from sites such as You Tube.

The legislation presents not only a threat to our freedoms on the internet but opens the possibility for all kinds of censorship to be undertaken.

The attached paper is a draft briefing written by Monica Horten of the University of Westminster, Communications and Media Research Institute.    It’s very clear and very important for our scenarios.