Expert view: We must change Ofcom’s auction

By Damian Radcliffe, Third Sector, 6 February 2008

Ofcom’s predictable decision to auction off the spectrum freed up by the switch from analogue to digital TV broadcasting at the end of last year did not make a good Christmas present for the sector.

The decision to follow a purely market-led approach will clearly favour big broadcasters such as mobile phone companies and dotcom giants. Many of these businesses are owned and funded by foreign investors and have the financial resources to buy up valuable spectrum – resources that sector agencies simply do not have.

Moreover, in order to recoup the huge costs associated with buying spectrum, providers will inevitably follow subscription or pay-per-view models. This will further reinforce the digital divide by leaving millions unable to afford the new services on offer.

Earlier in 2007, CSV and representatives of other volunteering organisations, including TimeBank and umbrella body the NCVO, argued against such an approach, proposing instead that social value needed to be part of the auction mix as well as hard cash.

We felt that some of the spectrum should be used by service providers to encourage social inclusion, community relations, employability and crime reduction as well as to create a platform for contributions to the arts, culture and heritage. It should not be used simply as a cash cow for publicly listed companies.

This argument has largely fallen on deaf ears so far. By deciding not to ring-fence spectrum for services such as local television channels, which have strong public service, community and social action agendas, the regulator is making it very hard for charities and community groups to enter the auction process.

The challenge now facing the sector is to accept that the auction process is happening, but to try to influence the nature of it. If we don’t, then we may be unable to benefit from the new spectrum and the new ways to reach our target audiences that this will bring.

One way around this problem is to encourage Ofcom to use an auction model in which licence awards are made not only on the basis of money but with public purposes and social benefits taken into account.

Such an approach could encourage commercial providers to explore partnerships with charities that would otherwise not be able to benefit from the newly released spectrum. The fact is that services motivating people to tackle crime, improve their health or reduce their carbon footprint will not only create social capital, but they could also save the Treasury more money in the long term.

Damian Radcliffe is head of broadcasting at volunteering organisation CSV