Compensation Plan in UK Spectrum Reallocation Gets Cool Reception

UK industry groups have responded coolly to arrangements by broadcasting and spectrum regulator Ofcom to compensate users of wireless microphones and in-ear monitoring systems moving from channel 69 because of spectrum reallocation. Organisations representing the PMSE (programme makers and special events) sector, which includes many sports-facilities providers, were already annoyed by Britain’s new coalition government’s stating that those with equipment operating in other bands would not receive funding to buy new equipment.

In April, Ofcom issued an interim plan, detailing how those using wireless equipment in channel 69 would move to channel 38 “or other replacement spectrum” by 2012. The campaign group Save Our Sound UK (SOSUK), which brings together trade bodies including the Institute of Broadcast Sound (IBS) and BEIRG (British Entertainment Industry Radio Group), met with the Treasury in July to discuss compensation for owners of existing wireless equipment.

The issue was raised in the House of Commons a few days later by Bob Russell, Liberal Democrat Member of Parliament for Colchester. He asked what provisions are being made for PMSE operators who will be affected by the clearance of the 600 and 800 MHz bands and what compensation will be made.

Communications Minister Ed Vaizey replied that PMSE users were notified by Ofcom in 2005 that they would have to vacate channels 31-37 and 63-68 by 2012, with channels 61-62 no longer available from 2007 onwards. “Ofcom considers this an acceptable period of notice for users to react and are not obliged to offer compensation or to find alternative spectrum,” he said.

The minister continued that, because PMSE operators had been expecting to have access to the nationwide channel 69 until 2018, they would be compensated for being moved from that frequency. “This government is now considering options on the appropriate level of compensation, taking into account how we can best ensure users are neither better nor worse off,” said Vaizey. “In the current financial climate, [there] is the need to appropriately safeguard and make efficient use of taxpayers’ money.”

SOSUK had this to say: “Notice was given, but no concrete information was provided at the time of exactly what spectrum would be available for use on a long-term basis. Because the spectrum under threat was still legally licensable, users were forced to carry on investing in potentially affected products.”

Malcolm Johnson, who represents the IBS on spectrum, says restricting compensation to channel 69 users is a “very retrograde step” because a lot of equipment designed for the affected bands bought when notice was given will have a service life of five to eight years from 2012.

Under Ofcom’s compensation plan, users will be eligible for funding if they held a licence to use channel 69 equipment on Feb. 2, 2009, when notice was given to clear the frequency, or in the 12 months leading up to that date. The only exception is companies that are able to prove they hire out channel 69 equipment rather than use it.

The compensation has been worked out at “roughly 55% of the cost of replacing equipment with an equivalent model.” This is estimated on the possible cost of gear at the end of 2012.

Ofcom has appointed Equiniti to oversee the registration process for funding. As scheme administrator, the business-services and administration company has drawn up a rate card (available at www.pmsefunding.co.uk) listing wireless equipment, its current value and the projected price in 2012. From this, the amount of compensation due for each item can be calculated. Registration runs from 23rd September to the end of December.

The regulator has asked the PMSE sector to check the list and suggest any corrections or additions. The deadline for these submissions is Sept. 2, which BEIRG spokesman Alan March contends does not give people enough time to respond.

An Ofcom spokesman said that any change in the date “could have a knock-on effect and cause delays, which is something we don’t want to happen.” March says the timing is not good, with people in the audio industry on holiday and institutions that use wireless equipment, such as schools, closed. “We are making a representation to get this extended, even if that means payment is put back,” he adds.

March also reiterates the audio industry’s concerns about compensation being restricted to channel 69 equipment. “Just because it is a legal arrangement doesn’t make it morally right.”

In its response to the compensation plan, SOSUK acknowledged that Ofcom and the government had recognised the needs of the PMSE sector but said the new statement “does nothing to ease the plight of those who own equipment that does not happen to tune to channel 69 but will still be rendered redundant as a result of government action.”