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Wednesday, June 27, 2007

Fortress Europe: MobileTV

It should come to no surprise to anyone that are reports that Viviane Reding is about to recommend the use of DVB-H technology across Europe.

In a speech given in March at the CeBIT conference, she laid out the official EU stance:
I am convinced that the use of widely recognised open standards is of paramount importance to achieve economies of scale. Only with economies of scale will we have an efficient use of spectrum, affordable handsets and rapid consumer take-up. Therefore, I am prepared to give strong support to European standardised solutions, such as DVB-H, on the condition that they provide certainty about technology licensing terms and conditions. Without this certainty and predictability, it will be impossible to invest with confidence in new innovative technologies. Industry should therefore foster work in this direction.

European industry has developed and exported worldwide successful standards already in the past, as we currently do in South America and Asia to export DVB-T as the best open standard for digital television. I am therefore confident that on the basis of DVB-H, economies of scale will develop for the take-up of Mobile TV in Europe and around the world.

For all practical purposes this is going to firmly shut the door on alternative technologies such as MediaFlo and DMB-T. How this will be achieved is not necessarily via the route used in getting universal adoption of GSM technology in 1990s throughout Europe – ie tying spectrum to a specific technology. It would take an extremely brave and foolhardy mobile operator to go against the grain and choose some other technology whatever the perceived advantages are.

Given the powerful forces behind MediaFlo technology (Qualcomm of the US) and T-DMB (South Korean Manufacturers), I am fully expecting the issue to develop into another Airbus – Boeing type brawl ending up at the World Trade Organisation. The WTO will not change anything, because it will take years for the saga to be resolved and by then DVB-H will be deployed and the game will be over, but the WTO will set a precedent for future technology decisions and therefore the process will be important.

The UK here is a complete laggard and because of our sin of sloth for clearing and licensing spectrum the UK people were always going to be dealt with at a minimum a de-facto standard rather than a variety of technology choices or even one technology determined by the market which is best for the UK economy and population in general.

For instance, although T-DMB is seen as a South Korean promoted technology, important patents are held by the BBC and various British Universities and of course BT has spent, no doubt, a fortune in developing and deploying their own variant of the technology.

Qualcomm’s MediaFlo is a totally different kettle of fish, but results of trials in the UK, USA and Japan seen to indicate that it is far more spectrally efficient than DVB-H with lower cost to deploy and more capacity. The recent decision of AT&T in the USA to deploy in a WCDMA network and it looks as if Softbank in Japan will deploy in another WCDMA network shows to me at least that MediaFlo is a really viable option.

The window is still fractionally ajar for Qualcomm in the UK, but that involve them bidding for spectrum and finding local partners with the content, brand and bravery to do something different – realistically BSkyB is the only potential premium partner. The other potential ally would be National Grid Wireless / Arguiva would have the sites to allow a quick rollout of the technology if any spectrum is acquired. However, it would cost Qualcomm a lot of money just to establish a beachhead in Europe with a potentially long payback.

The wider debate is whether it is beneficial for EU citizens for the unelected EU commissioners to be setting de-jure standards and promoting EU industry champions.

In the UK, we have tried these types of policies in the past and they have been disastrous for our economy. In other EU countries, such as France, this has been a major part of industrial policy for many years and many French would argue the policy has been extremely successful.