Thursday, 15 September 2011

OUTRAGE AS OFCOM CONTRACTOR SELLS TAXPAYER FUNDED EQUIPMENT INTO ‘CLEARED’ SPECTRUM

Company appointed by Ofcom to make way for new 4G services in the 800MHz band are selling equipment into the spectrum which taxpayers paid them to clear.

In 2009 Ofcom announced that wireless microphone users would be evicted from the 800MHz band to make way for new mobile broadband services. Following an industry campaign, Save Our Sound UK, which pointed out the damage being done to the British entertainment industry, the UK Government agreed to fund part of the clearance of the band. To qualify for taxpayer funding, Channel 69 equipment had to be surrendered.

This equipment is now being resold back into the band which taxpayers paid to remove it from, by the scheme’s administrator - Equiniti. A significant amount of equipment has already been sold, and Equiniti are now gearing up their operations to release up to 80,000 channels for use in UK spectrum. Only a fraction of the profit from the sale is going to the taxpayer who financed the scheme – the rest goes directly to Equiniti.

The British Entertainment Industry Radio Group (BEIRG) has repeatedly warned Ofcom about the damage that resale of this equipment could cause to manufacturers, wireless microphone users, and taxpayers. An influx of under-priced equipment, which will not be licensable in just over a year, will grossly distort the UK microphone sale and hire market – and will go against the very purpose of the taxpayer funded scheme.

BEIRG is also concerned that Equiniti’s actions may ultimately affect the attractiveness of the 800MHz band to mobile broadband companies. The price they are willing to pay in next year’s 4G auctions could be considerably reduced.

If this resale continues UK taxpayers will end up paying for this scheme twice over:

- Once in the original funding scheme (including the fee paid by Ofcom to Equiniti)
- Second, in the reduced price mobile companies pay for 4G spectrum auction

Following a meeting with Equiniti today (Wednesday 14th September) Ron Bonner, from PLASA and the BEIRG Steering Committee, stated:
“Equiniti has been paid from our taxes, through Ofcom, to administer the PMSE funding scheme. Equiniti have not paid for the equipment themselves – the public paid for it. Equiniti now want to sell the equipment on for profit, whilst damaging microphone manufacturers’ and the taxpayers’ chance of getting the highest price for the 800MHz band when it is auctioned next year. Ofcom need to step in now to stop this sale, and ensure that the original purpose of the scheme is not undermined by the re-release of surrendered equipment into UK spectrum.”

Notes for Editors:

- The British Entertainment Industry Radio Group (BEIRG) is an independent, not-for-profit organisation representing the concerns of those members of the Programme Making and Special Events (PMSE) sector who use radio spectrum (www.beirg.co.uk)

- PLASA is the Professional Lighting and Sound Association

- PMSE professionals use wireless microphones to produce content for productions in theatres, TV, film, live music and sport.

- Equiniti has been administering the PMSE funding scheme on Ofcom’s behalf (http://www.shareview.co.uk/clients/Ofcom/Default.htm)

- Wireless microphone users who had equipment licensed for use in Channel 69 were granted limited funding to ease their transition to Channel 38.

- The PMSE funding scheme covered only 55% of the replacement cost of equipment. Eligibility criteria to qualify for the scheme were strict, and many PMSE users were unable to receive any funding.

- The auction of 4G spectrum has already been delayed, due to threats of legal action from mobile operators.

- BEIRG has met with Ofcom and Equiniti on numerous occasions to raise its concerns.

- Key areas that BEIRG expressed concern about related to:

- What would happen to the equipment after funding had been received? – It was made clear to Ofcom that this surrendered equipment should not find its way back into the market.

- How can we remove as much channel 69 equipment from the market as possible, and clear the spectrum, ready for use by the new users? - BEIRG has been very co-operative in contacting users and informing the industry, working with Ofcom and Equiniti.

- How can Ofcom ensure that manufacturers and users, who have already had to suffer severe disruption and cost, will not be further disadvantaged? – BEIRG was quite clear that this equipment should not find its way back into the market, and if it did it would not be in the best interests of manufacturers or end-users, who have already suffered significant financial loss as a result of several years of indecision.


For further information, contact:
Fiona Graham
On behalf of the BEIRG Steering Committee
fiona@ranelagh.info
Tel: 0207 828 1603