Digital dividend could be worth £10bn

Possible uses of liberated bandwidth include high-definition TV and mobile broadband services

Ofcom wants to make the most of TV's digital dividend

Wireless spectrum freed up by the switchoever to digital TV could be worth between £5bn and £10bn to the economy over the next 20 years, according to Ofcom.

The digital dividend will increase consumer activity and boost the multimedia content sector, the regulator said. Potential uses of the radio spectrum range from high-definition TV to mobile video services. And if it is used for mobile broadband, the bandwidth could deliver fast, high-capacity connections across the country.

"The digital dividend will be one of the most significant and valuable spectrum releases in the UK for 20 years," said Ofcom chief executive Ed Richards.

"Our approach is designed to maximise these considerable benefits for UK citizens and consumers as a whole.

"We can expect the benefits of the digital dividend to include more choice, fresh competition and technological innovation," he said.

In total, the UK is freeing up 120Mhz of spectrum as a result of the TV switchover. In some European countries - including Italy, Belgium and Spain - all bandwidth is automatically returned to the control of broadcasters. But in the UK, Ofcom is considering maximising the use of the spectrum through the use of " cognitive radio" – an emerging technology that is capable of recognising whether a certain frequency is currently in use in a given location.

The scheme, currently being trialled in the US, could eventually lead to more efficient use of wireless resources, further boosting the gains from the digital dividend.

"If cognitive technologies take off, it could transform the world of spectrum management," said Philip Rutnam, Ofcom partner for Spectrum Policy.

"It creates the opportunity for bandwidth to be used much more intensively, without the need for so much regulation."

Ofcom said it will only approve the new technology once it is convinced that there is no risk of interference with existing spectrum usage.

Today the regulator announced it had completed the first stage of its Digital Dividend Review, concluding on a technology-neutral, non-interventionist approach to distributing the spectrum.

The regulator has promised to allow programme-makers and public event organisers access to the bandwidth, but other than this the final use of the resource will be dictated by auctions due to start in 2009.