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Ofcom funding scheme for UK PMSE sector

Wireless microphone users are waiting to find out what moving from the 700MHz spectrum means in terms of the equipment and frequency availability, but in Britain, some certainty has been given regarding funding for replacement equipment, writes Kevin Hilton...

It’s taken most of this year but UK radio microphones and in-ear monitoring (IEM) system users in broadcasting and live sound now have a clearer idea of what financial support they can expect when replacing or buying new equipment due to the 700MHz band clearance. Broadcast and spectrum regulator Ofcom has at last published a consultation document detailing how much money is available, together with a rate card itemising specific wireless mic makes and models.

The transition from 700MHz will mean broadcast facilities and rental companies, theatres, venues, live sound hire firms and individual operators face having to replace existing systems. The UK government will fund support because the process of clearing 700MHz has been accelerated; PMSE users will no longer be able to use spectrum in 694-790MHz from May 1, 2020, rather than the original target of September 2021.

Ofcom has been responsible for devising a scheme that was acceptable to the Department for Digital, Culture, Media & Sport (DCMS) and the HM Treasury, as well as the PMSE community. The regulator has gone through earlier submissions from radio mic users, while industry bodies such as BEIRG (British Entertainment Radio Industry Group) have stepped up lobbying Members of Parliament and government departments to ensure the best possible outcome.

The result is ‘PMSE – Clearing the 700MHz band’, subtitled Support for PMSE Equipment Owners, published at the end of August. Under proposals outlined in the document, Ofcom will design and run the grant scheme to distribute the available funds. In setting out the criteria for eligibility and principles of the rate card, it takes into consideration the 22 responses to the April 2017 Consultation.

The new document includes some amended eligibility criteria, which are in accordance with the April Consultation. Three basic conditions included in original proposals remain unchanged. To qualify, equipment owners must have either held a licence in the 700MHz band between October 17 and August 23 2018 or be able to produce evidence that their business is based on hiring out PMSE equipment, in which case they do not require a licence. People can only claim for equipment that belongs to them. The equipment being claimed must be in working order.

There are three other areas where significant amendments – if not concessions – have been made. In original proposals, equipment claimed for, must have been bought before October 17 2016. The end date was extended to August 23 2018, which, Ofcom says, covers those who have bought 700MHz equipment more recently to continue offering services in that band.

Previously the equipment being considered for funding would have needed more than 50 per cent of its tuning range in the 700MHz band. It has been widened to include units with only “some” 700MHz capability. The reason for this is that stakeholders said “the loss of utility should be determined by the equipment owner” and not a tuning threshold.

The April Consultation did not include ancillary equipment such as antennas, only transmitters and receivers. These units will now be eligible if they meet the other criteria, such as tuning in the 700MHz range. This concession has been made because users argued that ancillary gear is integral to creating an overall audio system.

The most dramatic shift in position from Ofcom is in the proportion of the replacement value that will be funded under the scheme. The April Consultation proposed 47 per cent of the estimated cost of replacing equipment based on an assumed “average asset age” of eight years. Users who responded to that Consultation called this an overestimate, leading Ofcom to reduce the scope to six years. Because of this “at least 60 per cent” of the estimated equipment cost will be offered, with owners receiving more the earlier they make a claim.

Ofcom has also proposed a five per cent figure to cover additional and ancillary administration costs. Alan March, senior manager of spectrum affairs and system design at Sennheiser, and a spokesman for BEIRG, says his personal view is that while this will be good for independents and companies handling their own submissions to Ofcom, people should not take unfair advantage of the scheme: “They shouldn’t push it too much in terms of administration costs because the money will run out.”

Describing the document as two consultations in one – covering the funding and the rate card – March comments that the three main proposals are “pretty significant wins” for PMSE. “Increasing the minimum to at least 60 per cent, expanding the tuning range for everyone in 700MHz and extending the cut-off date are all very big changes,” he says. “The rate card is a living document because it needs to be flexible. This is version one and there could be versions two, three and four depending on what issues people bring up.”

Another major commitment this time deals with an issue that March calls “a big bone of contention” during the 800MHz reallocation. At that time, the radio mic systems that surrendered in return for compensation were later resold into other industry sectors. “There is no way equipment will find its way back into the market now,” he says. “It will be destroyed in a controlled explosion.”

Tuomo George-Tolonen, director of the pro audio group at Shure Distribution UK, adds that if users hand in equipment sooner rather than later, they could receive higher funding, in the region of 65 to 67 per cent. “That increase is a good addition but the most important aspect is moving the eligibility date because it recognises that people will still need to buy equipment.

The five per cent for administrating the changeover is pretty fair because if you’ve got 24-channels in a rack in a fixed TV studio, you need downtime to swap everything over. That should cover labour and the time taken.”

From a theatre industry perspective, Duncan Bell, financial director at Autograph Sound Recording and BEIRG Steering Group Member, observes that Ofcom made a big shift in its position over the last 12 months. Bell commented: “We are very pleased that Ofcom has accepted a lot of BEIRG’s and the industry’s arguments and significantly improved the scheme in terms of what equipment qualifies and how much funding will be available. That said, there are clearly some strict guidelines that the government and Ofcom have to consider, which means those affected will do better than others. It’s good news that there’s a recognition of the administrative and logistical costs involved in the transition but unfortunately, this is not the case for all. So for example, theatre producers who use, but don’t own radio equipment, will have transition costs to bear but have been overlooked for compensation.”

Terry Tew, managing director of leading broadcast hire company Terry Tew Sound & Light – providing wireless mic systems for big TV productions such as the BBC’s Strictly Come Dancing, which is using approximately 100 channels of RF for its new series – welcomes the proposals but takes the point that it will not suit everyone in the business.

Tew commented: “I support the news in the statement that increases funding and eligibility as well as recognising the need to provide some support for additional costs of the transition. However, the detail is vitally important and it’s not a perfect solution for everyone. The industry should be aware that there are costs and consequences of the ‘one size fits all’ approach that’s been taken.”

A provisional version of the rate card is available now on the official Ofcom website. The consultation on funding was expected to close during early October, after which the regulator was planning to publish final decisions regarding costs as soon as possible.