Spain’s Second Digital Dividend and the Paradox of Broadcasters

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The radio spectrum is a scarce public domain property owned by the State.Its shortage is determined by the limitation of the number of frequencies available and by the impossibility of using the same frequency to transmit different information in a given geographical area.
In Spain, the management of public domain assets lies on three principles that have constitutional status: inalienability, imprescriptibility and unseizability (Article 132 of the Spanish Constitution).
What does this imply?This means that the radio spectrum cannot be sold or seized and that its state ownership does not prescribe.The State assigns property rights for periods, determined by two legal entities: the concession to private organizations and the involvement of public entities.
The spectrum is the raw material of wireless telecommunications services and its value increases with the development of the Information Society, which information and its exploitation is increasingly important for economic development.The European Digital Agenda clearly identifies the audiovisual and telecommunications sectors as two of the growth engines of the EU.
Services that use the spectrum have a great impact on the habits of society, causing changes in the needs of communication, access to information and enjoyment of entertainment services.
These new habits generate a greater demand for frequencies and force a more efficient management of the radio spectrum; this is what happens right now.

Spectrum s Policies Tradeoff
The axes of action that will shape a redefinition of the audiovisual model in the five-year period 2010-2025 are 5G economy, digital giants and new operators of the television industry.
The vector that crosses them is the video and the practice of content consumption that will grow the most will be streaming.
Precisely, video streaming is the one that requires more connection capacity.In other words, the demand for streaming is one of the main wake-up calls of 5G technology.Due to the above, the emergence of new services and technologies makes the spectrum management efficiency more and more valuable, but its planning and control are increasingly complex.
Decisions about which bands and to what services and technologies the spectrum is granted are taken by the State.These choices involve betting permanently for certain services and technologies.The best resolution of this tradeoff depends on the actors of the market.
Moreover.Flexibility means that, it is the market, that determines which services and technologies will use the available bands.The introduction of market criteria, however, should not prejudice the objectives of the State in terms of equity and guarantee of interference-free access for all services.
At present, as mentioned, the most outstanding services among those that demand spectrum are audiovisual services and broadband services in mobility.In this article, we focus on the first ones.
Broadcasters demand spectrum in order to offer higher quality audiovisual services, more personalized content and add mobility to digital television.Its access to the spectrum allows, therefore: 1. Improve the quality of the image and sound by implementing high definition television and 3D television.Both improvements require an increase in capacity that could multiply by eight the spectral consumption of a digital television program; 2. Improve the content offer by abandoning generalist programs and replacing them with personalized programs in which the contents would be direct to each type of user (e.g.sports news).The consequence of personalization is the increase in television consumption due to a rise in interest in programming, and 3. Deploy mobile television networks to access content from anywhere.
In order to satisfy the demand of broadcasters, the frequency band must necessarily be within the traditional range of frequencies used for television broadcasting (470-862 MHz band), since the band change would mean the substitution of all the terminals of the radio.user and the receiving facilities of the signal, as well as the deployment of additional transmitters.
In fact, the second digital dividend affects the ICTs(Common Telecommunications Infrastructures ) and, therefore, to thousands of collective installations throughout the country.
But the dedication of a portion of additional spectrum is not the only way to achieve the described advances.The use of technological improvements to obtain greater efficiency can also be used to fullfil these objectives.
Examples of these improvements are: i) the updating of compression technologies from MPEG2 to MPEG4 , ii) the deployment of single frequency networks to reduce the number of channels needed in the transmission of a given program, and iii) improvement in the transmission efficiency through the implementation of the DVB-T2 standard that allows a thirty percent increase in transmitted capacity.
The Paradox of the Broadcasters, a Loss of the Status Quo?
Thirty percent is precisely the part of the radio spectrum that is going to be assign to the 5G mobile technology.The chosen way of improvement is, therefore, the introduction of the DVB-T2 standard.
What implications does it have on the radio broadcasters as a whole?Undoubtedly, it is a loss of its current factual situation.That is why we say that we are facing a paradox; while the introduction ofDVB-T2 involves injecting spectral efficiency, the resulting equation is negative for the broadcasters, since that portion of the spectrum will be reassign to 5G communication networks.
We have to take into account that, although audience data reveal a slight stagnation11An analysis of the audience data of the linear television in the period between 2000 and 2020 shows a stagnation in the consumption of linear television.This downward trend contrasts with the increase in content consumption through the Internet.If we observe the consumption data of both television and Internet, it is inferred that, in a short period of time, the consumption curves will cross to the downside and upward, respectively (Source: Kantar Media (2000-2020)., the consumption of linear television continues to be the main way of receiving audiovisual content.
In Spain, the television modality par excellence is, therefore, the hertzian technology.
At this point, we have to underline that migration to this modality in its digital modality has been the result of a complex process that has undergone profound changes.
The biennium 2018-2019 is a new turning point in the trajectory ofDTT in Spain, an imposed replacement technology that gathers theglove of terrestrial television, whose implementation begins in 2005 and ends in 2010, when the analogue switch-off occurred.
The indicate period is key because DTT faces its second analogue switch-off.From its adoption until the present moment, four phases can be identify.
The digitization of the hertzian signal started in May 1997, when the former public entity Retevisión carried out the first pilot tests.The legal backing of this technology occurs at the end of that same year with the approval of Law 66/97, of December 30, in which it is mention for the first time.
This first stage, which lasts until the end of 2007, is barb with uncertainty.Since its legal birth, the open DTT model is not yet consolidate.Therefore, the lack of definition is the characteristic feature of this period.
During this "lost" decade, two significant events take place that do not help the take-off of the open model of digital hertzian television.
The first, of a technical nature, happens in 2005, when the first broadcasts by free-to-air broadcasters take place, as the capacity of the assigned multiplexes made programming difficult.
The second, of a legal nature, is the approval of Law 17/2006, of June 5, to modify the administration regime of the RTVE Corporation, in development of article 20 of the Constitution, given that, until its enactment, the Corporation will remain plunged into a situation of institutional blockade.
The second phase starts in 2007.This year the "re-launch" of DTT begins.Aware that the software is the key to the business, television operators begin to organize their strategies around content.Proof of this is the purchase of Endemol by Mediaset in May 2007.
During the 2007-2010 triennium, issues related to dissemination and, above all, reception of the DTT signal concentrate the problem.Digital techniques for the case of diffusion reach the zenith; the same cannot be said as far as the reception is concerned.
There are three aspects on which the problem lies in: coverage, antenization and receiving devices of the signal.As for the first, for 2010 coverage is achieved around ninety percent, above the European parameters.Regarding the second, this aspect is also resolved.It is, therefore, the third question -the reception of the signal-, which concentrates the problem and what is decisive so that the model does not finish consolidating.
The absence of a solid strategy results in the lack of adoption of a single standard, key to achieving interoperability.The majority of solutions that proliferate in the market (basic zapper, TV sets with integrated Set-Top-Boxes and DVD-DTT combos) do not incorporate a single standard -MHP , for example-, which undermines the potential economies of scale essential in this business and involve the exclusion of the interactive universe.
With DTT the progressive displacement of the viewer begins, which will increasingly be considered as a user and, later, as a client, since the products become merchandise that can be packaged, distributed and individualized (DTT enables the creation of a library of contents in which the sequence of consumption can be change).
In line with the wake followed by the telecoms, broadcasters plan to stop producing programs to exchange audiences for advertising revenues and instead manage users of integrated services.
There are two issues that will make this strategy impossible.The first, the fragmentation of the audience.The second is the stagnation of advertising margins, aggravated by the economic crisis, which will result in a lack of interest in multiplatform content, given that broadcasters face the cost to reach the required coverage in this period.
After the analogue switch-off, in the period between 2010 and 2018, there have been digital dividendstelevision frequencies that have become available -which, due to the fact that digitization makes it possible to compress information, give way to new available frequencies, which can be used for other purposes (this is the case, for example, of the provision of mobile broadband services).Specifically, in the indicated period, two distributions of digitaldividends take place.The first takes place between 2009 and 2015, when the third phase of DTT is inserted.The second has started in 2018 and, predictably, should be completed before 2020.
The perception of the strategic value of advanced mobile electronic communications services is the key to Spain announcing the reservation of the band from 790 to 862 MHz for the aforementioned services, in line with the proposals of the European Commission.
The legal backing of this approach occurs with the approval of RD 458/2011, of April 1, on actions in the field of radio spectrum for the development of the digital society, which establishes the procedures by which the digital dividend It is made available to operators for the provision of electronic communications services.And with the allocation of this first digital dividend -which ends in 2015 -the third stage ends.
Two years later, in 2017 (specifically, on December 1), theMinistry of Energy, Tourism and Digital Agenda approved theNational Plan 5G 2018-2020 , which includes the process of releasing the second digital dividend, scheduled for the 2019 biennium.-2020.Also on this occasion, the revulsive is the new technological paradigm.In this case, give input to the deployment of 5Gnetworks.
At the end of the first semester of 2018, the Spanish Government publishes in the Official State Gazette the Order ETU / 531/2018, of May 25, which calls for the auction of 200 MHz for the development of5G technology in Spain22Order ETU / 531/2018, of May 25, approves the list of specific administrative clauses and technical prescriptions for the granting by auction of private use concessions of radioelectric public domain in the band from 3600 MHz to 3800 MHz and is convened the corresponding auction.200 MHz will be auction in the frequency band from 3.6 GHz to 3.8 GHz (3600 MHz to 3800 MHz), priority band for the development of 5G technology in Europe..At the end of this article it is difficult to foresee the extent of the success or failure of the distribution of the spectral heritage and its corollary, but we believe that DTT still suffers from an attractive offer of contents.
Hence, in line with a doctrinal sector, we think that without an offer of attractive content or a powerful technology, the potential ofDTT , developed in the obsolete novelty oxymoron (Domingo Garcés, 2017, p.5),It will shut down before it even completes its final implementation.

Radio Spectrum, Digital Dividend and Net Neutrality
In terms of propagation and penetration inside buildings (the most common type of housing in Spain) bands around 1 GHz have excellent characteristics.Their situation in the radioelectric spectrum makes them especially attractive, since they represent an adequate compromise between station coverage and information transmission capacity.
The attributions to services made in the frequency bands around 1 GHz are of vital importance in terms of equity, since they make it possible to deploy stations in areas of low population density with economically profitable investments and much lower than those of the upper bands.
The traditional band used for broadcasting 470-862 MHz is the set of frequencies allocated for analogue television broadcasting.With the advent of digital television, the necessary capacity for television broadcasting has diminished thanks to the greater technical efficiency of digital technology.
The result is that part of this band is available for flexibilization and operators of different types of services request its use.Given that the radio spectrum is a public good and a fundamental resource for the provision of a wide range of services, the proper planning and use of the radioelectric public domain constitutes one of the main strategic axes to contribute to economic growth.
However, what a priori presents as a competitive advantage, soon reveals itself as a burden, partly because the cessation of analogue broadcasts scheduled for April 3, 2010 gives way, thanks to the digitalization of the signal hertziana, to a high number of channels, which introduces a huge complexity in the management of the spectral heritage.
The perception of the strategic value of advanced mobile electronic communications services crystallizes in the approval of Directive 2009/140 /CE, which establishes the neutrality of services as an inspiring principle of regulatory approaches.
It should be noted that the arrival of the second digital dividend occurs at a time when the question of technological neutrality is shaking.Directive 2009/140 /CE introduced the principles of technological neutrality and service neutrality.Since then, these principles have guided the normative activity of the Member States of the EU.
Indeed, on the one hand, the principle of technological neutrality enshrined in Directive 2009/140 / EC has resulted in a primacy of economic criteria that have jeopardized the provision of certain services because of their low economic profitability (Cullel March, 2010, p.2). Broadcasting services are a paradigmatic example.In fact, in the United States it is precisely the economic aspect that has determined the end of the principle of technological neutrality on the Internet.
What does it mean to abandon the neutrality regulation of the network?First of all, a significant reduction in the content of the internet that can be prioritized, while the amount of content that can not be prioritized remains unchanged.In one case the two access providers prioritize and in the other only one access provider prioritizes traffic and the other does not.
Without neutrality, Internet access providers enjoy greater benefits thanks to the rate of prioritization charged to content providers, but content providers willing to pay for prioritization and advertisers see their benefit reduced.For a sector of the doctrine, the abandonment of the neutrality of the network has two effects on the utility of the consumers.On the one hand, utility decreases as a consequence of the reduction in the amount of content.On the other hand, it increases because the number of packages susceptible to prioritization decreases (García García, 2017, p.13).
In any case, the US regulatory authority -The Federal Communications Commission (FCC) -has driven the beginning of the end of net neutrality.In the short term, this measure will result in a purge between telecommunications operators (for example, Verizon or AT & T ) and companies that provide their services through the network (such as Netflix or HBO ), which will be impelled to negotiate in a convergent dynamics at the same time as deregulatory.
The foreseeable loss of status quo of DTT that will lead to the implementation of 5G mobile technology keeps a significant parallel with the arrival of private television, as the previous factual situation is alter.
In effect, three are the concessions granted through public tender in 1989.Why three and not two or four or even five?The Spanish audiovisual model is rooted in the French exception culture, a patrimonial conception that explains the tight control exercised in the management of the spectral heritage.However, the number of concessions granted a year after the enactment of the Law that regulates the indirect management of the essential public television service is soon reveal as a matter of a political nature.
Numerous aspects are affect with the emergence of private and pay television channels.Among others, the public service, informative pluralism, competition, technical plans for broadcasting the signal or the advertising regime.We must bear in mind that the arrival of 5G will lead to a new reordering of the audiovisual sector.
In what sense?For example, in the current status quo of some operators, which can change and their survival may depend on their capacity to be part of the ecosystem, which inexorably happens to offer added value beyond connectivity.

Disruptive Migration Draws New Cartographies in the Audiovisual Ecosystem
In the current audiovisual ecosystem, made up of traditional broadcasters, Internet service providers and user generated content, there is a coexistence between the new forms of consumption of audiovisual content, close to hybrid environments and based on broadcasting through broadband, and the traditional one (linear television through the digital hertzian signal).
To this, it is added that the audiovisual contents offered by the new players (online platforms) have distribution costs that are far from those required by the broadcast through terrestrial hertzian networks and that allow costs to be reduced.
In this context, coexistence, then, is far from peaceful and asymmetry is the note that characterizes the situation of departure.Moreover, traditional broadcasters, Internet service providers and user-generated content are subject to different regulations and unequal levels of protection.
Within the framework of the various initiatives that have been raised around the Digital Single Market, the European Commission has proposed a new Directive on Audiovisual Communication Services (hereinafter,DSCA II ) whose main challenge is to protect the interests of the traditional and new broadcasters.In short, harmonize the current regulations of the audiovisual sector and adapt it to the new reality, in order to reflect the new changes in the market, consumption and technology.
And in a technological key, the reordering of the audiovisual sector in the coming years is also explained.The engine of this change is the imminent arrival of 5G .
The potential for digital disruption resulting from the high penetration rate of mobile devices is enormous in many sectors and, in particular, in the media and entertainment industry.
At this moment, the main players (Netflix, HBO Now, Hulu, Amazon Prime Video, Google TV, Spotify, YouTube or iTunes ) have positioned themselves as specialized content providers.
As this happens, traditional broadcasters are facing a new move to make room for the new mobile technology.Indeed, in the midst of a stagnation of consumption and saturation of advertising (due, in part, to being a product designed for mass audiences and now these are fragmented), they must be relocated in the radio spectrum.All this when they still amortize the costs of the previous one.
The adoption of the new mobile network will alter, predictably, the current status quo of some operators, so their survival may depend on their ability to be part of the ecosystem, which inexorably happens to offer added value beyond connectivity.
Perhaps for this reason the migration of one and the other must be done in a disruptive way.

Legal Issues Involved
As indicated above, within the framework of the Digital Single Market strategy, by the end of 2018, the set of EU Member States will vote for the DSCA II , which will replace the previous one (2010/13 / EU of the European Parliament and of the Council, March 10, 2010).
The proposed Directive, approved on May 25, 2016, is an initiative of the European Commission and is part of a set of initiatives that aim to strengthen the Digital Single Market.
The audiovisual sector needs a new regulatory environment that offers solutions and gives legal security to all the audiovisual operators that make up the new digital ecosystem.
In effect, the European measure tries to bring the interests of all audiovisual operators together, what happens by transferring obligations that until now fell only on traditional broadcasters to online service platforms, such as the share of European content.
In other words, the challenge is to adapt the regulation to the new reality that has been imposed in the audiovisual market, currently made up of audiences that increasingly consume more content through the Internet.At the same time, we must bear in mind that an increasingly large part of these consumers are, in turn, transmitters of content via streaming, a growing modality.
The first framework of common rules for the European regulation of television broadcasting is base in the Television without Frontiers Directive of 1989.In 2010, these regulations and their subsequent amendments of 1997 and 2007 were consolidate into a single text, the Services Directive of Audiovisual Communication, which is currently the cornerstone of the regulation of the EU's media.Now, the objective of the EU is to apply to online platforms similar rules to those already regulated by the 5,141 television channels that exist in the Union and, thus, achieve a balance between competitiveness and consumer protection.
The path through which the development of the new normative instrument has gone through has been complex, as more than 1,400 amendments have been submitted, but necessary, because it is urgent to respond to numerous legal challenges.
In concrete, the changes that the new Directive will foreseeably bring together are relate to the following issues: principle of country origin, commercial communications, protection of minors, prohibition of hate speech, promotion of European works, video distribution platforms, accessibility, audiovisual regulators, as well as the formalization of the Group of European Regulatory Entities for Audiovisual Communication Services.
The consumption of on-demand content -in particular, videos -via streaming technology has spurred the emergence of new actors in the audiovisual sector.As consumers, new players are also competitors of traditional operators.
In the new digital ecosystem, made up of traditional broadcasters, Internet service providers and content generated by users, the starting situation is far from uniform, as they are subject to different regulations and unequal levels of protection.
From the legal point of view, the approval of this normative instrument is, together with the deployment of the 5G network, the aspects that will have the greatest impact in the process of the distribution of the second digital dividend .
And this is because the process of bidding, auctioning and distribution of the concessions has a rigid dynamic, typical of a regulated sector such as audiovisual, but which coincides with the approval of the DSCA II, presided over by a principle of deregulation.
The foreseeable comparison of the rules of the game between traditional broadcasters and distributors of contents is, without any doubt, the most relevant aspect, since the legal corpus that governs until its entry into force is the Law on Audiovisual Communication of 2010, a text that supposes a de facto discrimination between the traditional operators, who must comply with specific requirements regulated in the legal body and the new ones, whose legal framework is more flexible.
Thus, far from staying on the sidelines in a passive and neutral attitude, regulatory authorities must carry out protective actions aimed at safeguarding the interests of all operators without distinction.
In fact, not doing so would imply a clear violation of the two aspects of the fundamental right to equality.Indeed, the principle of equality proclaimed by Article 14 of the Spanish Constitution admits two aspects: i) one referred to "equality before the law", which prevents the legislator from establishing, between similar situations, differences in treatment, and ii) another referred to the "equality in the application of the law", which pursues an interpretation of the law equally for all.
Thus, on the one hand, not every disparity of treatment means discrimination and, consequently, such a principle must require an absolute identity of factual presuppositions.On the other, the application of the principle of "equality in the application of the law", mandates that there is an adequate comparison term, so that there has been an unequal treatment in identical cases, according to the reiterated doctrine of both the Supreme and the Constitutional Courts.
In the meantime, in order to provide the necessary legal security for all actors, a disruptive migration must be considered for DTT , but compensatory mechanisms must be established for the costs caused by migrations (both remnant and emerging), inasmuch as broadcasters have made investments that have not finished amortizing.

Conclusion
In the planning and management of the spectral heritage, the role of the public sector is necessary.However, the Administration has demonstrated a hypergarantist attitude that is evident in the tight control it has exercised over the spectrum, which has translated into delays that have harmed, above all, telecommunications operators and, therefore, the users, increasingly closer to hybrid consumption that demand greater bandwidth.
The current era is characterized by forms of consumption that are closer to hybrid environments and based on broadband diffusion, with distribution costs that are far from those required by broadcasting through terrestrial hertzian networks and which reduce costs.In this context, asymmetry is the note that characterizes the starting situation, since traditional broadcasters, Internet service providers and content generated by users are subject to different regulations and unequal levels of protection.
With a spirit tinged with deregulation, in line with the trend followed by the US regulator, the European legislator has proposed the DSCA II , which main objective is to harmonize the current regulations of the audiovisual sector and adapt it to the new reality, in order to reflect the new changes in the market, consumption and technology, but maintaining a hypergarantee attitude in matters such as the "general interest", a legal right that continues to preside over the regulation of the audiovisual sector.
In order to achieve this legal right, key to establishing fair rules of the game for all operators, we must avoid traditional management models (such as command and control, which has presided over the management of the radio spectrum in the past) or resorting to patch-type formulas to get out of the way of emerging issues (a flood of low-rank norms, in which dispersion has been the dominant note, have characterized audiovisual regulation for a long time).The relocation of available spectrum involves rescheduling, renewing the receivers, providing new coverage and, above all, cutting the spectrum assigned to DTT .Therefore, it can not be ignored that the impending change implies a new investment cycle.
The process of auctioning and distribution of concessions has a rigid dynamic, typical of a regulated sector, such as audiovisual sector, but which coincides with the approval of the new Directive, presided over by a principle of deregulation, which augurs disruptive key.
Technological advances modify the regulatory principles that preside over the management of the radio spectrum and, therefore, the distribution of the digital dividend.Far from staying on the sidelines in a passive and neutral attitude, for the pursuit of aims and objectives of general interest, the regulatory authorities must carry out positive actions designed to protect those interests; neutrality is a criterion that should not preside over the decisions of the regulatory authorities.