Digital Dividend auction to be replaced by broadband plan

The latest proposals from government officials could lead to the abandoning of the sale of spectrum and would instead be offered to companies in exchange for a promise to give back a high speed broadband service.

New proposals that are currently being considered by Lord Carter, the communications minister could mean that the current and widely popular release of free spectrum through the Digital Dividend by means of a sale could soon be abandoned.

In return for committing to offer high speed broadband access the new broadband plan would gift companies with available spectrum within the UHF bands. The latest leak of the interim digital dividend report that was due for publication on the 26th January by Lord Carter but was released to The Sunday Times led to these latest suggestions. If companies were to decide to put in lower bids on spectrum due to the current economic climate could potentially cause the Government a great deal of embarrassment and this change in emphasis in order to drive public policy would prevent that.

This new proposal is backed by the National Endowment for Science, Technology and the Arts (NESTA) who has advised that the sale of the spare UHF spectrum should be scrapped by the government and the radio frequencies should instead be used to deliver broadband.

Jonathan Kestenbaum, the CEO of NESTA said “We have to go much further, particularly during recessionary times. Unless we invest in super-fast broadband, the UK will lose a critical opportunity. In exchange for a major government asset, the telecoms industry would need to rapidly deliver nationwide access to super-fast broadband and provide free basic broadband, where appropriate, to those on low incomes.”

The spectrum auction was previously expected to raise almost £5 billion for the exchequer with the support of regulator Ofcom.