Searching for a real Digital Dividend

The ‘Digital Dividend’  is the tag used by Ofcom to promote the shift from analogue to digital broadcasting – releasing spectrum that is potentially useful for future mobile services, and potentially another good revenue stream when these bands have been cleared for auction.

Only newly ‘qualified’ economists, or advocates of Advanced Wishful Thinking, will imagine that this time around we might see a repeat of the 3G spectrum pricing that so distorted the telecoms sector in the last decade – a windfall for HM Treasury of such scale that could have paid twice over to provide fibre to every home in the country.   One of the factors that to this day inhibits the fullest possible roll-out of 3G mobile services is the lack of fibre available for ‘backhaul’ -  the feeder connections for the thousands of smaller base stations needed to deliver ubiquitous mobile data dreams.

It is, of course, entirely legitimate to argue that the ‘Digital Dividend’ will be found not in government revenues from spectrum sales but in many other indirect values, economic growth, better quality health services, smarter public-sector working, innovative education etc.  But that is not exactly what has been sold to politicians or the public who are only gradually waking up to DAB and the junking of millions of FM radios whether these are stand-alone devices or embedded in alarm clocks and mobile phones.

But to find a real Digital Dividend we have to look beyond regulatory re-jigging of spectrum allocations, way beyond the gaming dreams of auction process designers and beyond (but we’ll get used to it) the annoyance of clipped packets of audio streaming that make an outside broadcast from Shipton Bellinger (Hampshire) sound as seamless as a satellite report from the opposite side of the world.

To find a real Digital Dividend we must look to Australia where, as a direct consequence of thinking through a national broadband plan, they have realised that not only was it a mistake to not physically separate the incumbent Telco’s Access and Services assets but that the ultimate destination is a copper-switch-off plan.

So the real value is not just the economic growth and all the cross-sector benefits that flow from being, truly, ‘an advanced digital nation’, but also the bonus of public ownership of a mountain of copper to be recycled and traded on the world market.

By the time the UK is ready to follow this lead the divvy may well have diminished – but at least we’ll not be short of understanding what a good idea it would have been to spend the last spectrum windfall on bringing the telecoms infrastructure into the 21^st century.

As they say in Chattanooga – ‘Not far behind is not good enough’.

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Notes:

Deatils of the Australian National Broadband Plan and a 'trans-sector approach' will be presented in London on July 13th at an event hosted by UK Trade & Investment. 

 The phrase 'an advanced digital nation' is taken from an Ofcom claim in 2009 regarding the UK's current global position.  In June 2010 the recently appointed minister Jeremy Hunt MP described the UK's globally-lagging position as 'a scandal' and derided the internationally non-competitive aspiration of a 2Mb/s target for the UK's 'Universal Broadband Service by 2012.

Update 7th July 2010: Uk Government announced today that the plan to switch off FM radio in 2015 will now be 'on hold' and that any future plan for switchover to DAB will be consumer-led.  The immediate media coverage of this announcement did not make any reference to the potential for spectrum 're-farming'.