UK Spectrum Management
Trading Mechanisms, Liberalisation of use, access and
innovation
Ofcom has regulatory responsibilities from broadcasting through to telecommunications.
The most significant point of common interest is in the key raw material
of most modern communications - the invisible but critically important
radio spectrum.
Ofcom has today published an overview of the steps it intends to take
in 2004-05 to introduce greater flexibility and freedom of use to radio
spectrum management.
The radio spectrum is used for hundreds of different kinds of
communications services, from taxi two-way radios, maritime and aviation
communications and TV and radio broadcasting to mobile phones, satellite
services, wireless broadband, radar and wireless links for fixed-line
telecommunications networks.
Radio spectrum is a finite resource and multiple users must co-exist
without causing interference to each other. International agreements intended
to avoid interference whilst allowing common use across borders also place
constraints on the UK's use of parts of the spectrum.
In short, rather like land, nobody makes more spectrum. However, each
country can make more of what it has, through efficiency of use and greater
innovation in areas such as data compression and dynamic frequency selection
technology.
Section 3 of the Communications Act 2003 therefore requires Ofcom to
ensure the UK's airwaves are used as efficiently as possible.
Historically, spectrum has been managed through a top-down, centrally-run
approach, in which Governments (or Government agencies) controlled every
aspect of the allocation of the rights to use wireless communications
services.
Ofcom believes that this approach reduces scope for the most efficient
possible use of available spectrum; users tend to be better placed than
governments to decide how best to meet market demand. Ofcom also believes
that this approach does not give users sufficient flexibility to make
innovative new uses of existing spectrum.
These conclusions build on the findings of the 2002 independent review
of radio spectrum led by Professor Martin Cave and commissioned by the
Department of Trade and Industry and HM Treasury. Those findings were
subsequently reflected in the Communications Act 2003.
GREATER FREEDOM FOR SPECTRUM USERS
Ofcom will therefore take the following steps in 2004-05 to provide a
revised spectrum management framework with appropriate market mechanisms
and incentives for efficient use and innovation:
1) AUGUST 2004
Statement on spectrum trading, published today. Spectrum trading will
allow companies and individuals holding licences to operate wireless transmission
services to buy and sell their rights in an open market. Ofcom intends
that the first classes of licences will become tradeable at the end of
2004.
Ofcom received 114 responses to its spectrum trading consultation published
in November 2003; the proposed introduction of spectrum trading generally
received strong support from stakeholders.
2) SEPTEMBER 2004
Publication of detailed consultation on spectrum liberalisation. This
will set out proposals for removing unnecessary restrictions on licences,
so that licensees can change the use of spectrum. At present, licences
specify in detail the use that can be made of spectrum. Liberalisation
will be introduced in a phased way across most types of
licence between 2004 and 2007.
3) SEPTEMBER 2004
Publication of draft spectrum trading regulations governing the manner
in which the new spectrum trading market must operate, together with details
of the proposed Ofcom Spectrum Registry (similar in structure and approach
to the Land Registry) and a statement on Ofcom's approach to ensuring
effective competition in the spectrum market.
4) NOVEMBER 2004
Publication of Ofcom's proposed Spectrum Framework Review. This will
bring together Ofcom's conclusions on spectrum trading and liberalisation
within the context of a broader strategy on all spectrum management issues.
5) DECEMBER 2004
Publication of draft roadmap on approach to mobile and wireless broadband
services.
6) DECEMBER 2004
Spectrum trading and liberalisation will launch, beginning with the following
licence classes:
* Analogue public-access mobile radio
* National paging
* Data networks
* National and regional private business radio
* Common base stations
* Fixed wireless access
* Scanning telemetry
* Fixed terrestrial links
7) FROM 2005
Additional licence classes will become tradeable and restrictions on
change of use will be liberalised in 2005 and in each of the subsequent
three years. Throughout, Ofcom will also continue to auction released
and returned spectrum allocations on a business-as-usual basis.
Ofcom Chief Executive Stephen Carter said: "Access to a flexible
and transparent market coupled with the ability to explore innovative
new uses for existing spectrum will maximise the effective use of a finite
national resource."
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