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Practical aspects of liberalisation and re-farming of spectrum International Telecommunication Union Telecommunications Development Bureau ITU Regional.

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Presentation on theme: "Practical aspects of liberalisation and re-farming of spectrum International Telecommunication Union Telecommunications Development Bureau ITU Regional."— Presentation transcript:

1 Practical aspects of liberalisation and re-farming of spectrum International Telecommunication Union Telecommunications Development Bureau ITU Regional Workshop on Efficiency of the Frequency Spectrum Use in the Arab Region Amman-Jordan, 5-7 Dec Dr. Arturas Medeisis ITU-BDT Spectrum Management Expert

2 ITU Regional Workshop, Amman, 5-7 Dec Scope of presentation What is flexibility and liberalisation in SM The balancing act of liberal SM Spectrum trading as part of liberalisation What is re-farming Means and ways of re-farming

3 ITU Regional Workshop, Amman, 5-7 Dec The terms Flexibility means possibility of changing the purpose for which the assigned spectrum is used by licence owner Liberalisation of SM means providing possibility of liberal exchange of spectrum holdings –unrestricted spectrum trading of flexibly defined spectrum assignments is the best example Hence, flexibility can be realised without liberalisation, whereas liberalisation is seldom meaningful without flexible spectrum usage right

4 ITU Regional Workshop, Amman, 5-7 Dec Flexible vs. harmonised Degree of harmonisation High Low High Low Medium Full harmonisation (e.g. 2G/IMT bands) Partial flexibility (e.g. PMR, SRD bands) Full flexibility (e.g. 2.4 GHz band, other commons) Degree of flexibility Source: ECC Report 80

5 ITU Regional Workshop, Amman, 5-7 Dec Market scenarios High flexibility Low flexibility High flexibility Low flexibility Source: ECC Report 80

6 ITU Regional Workshop, Amman, 5-7 Dec Spectrum trading 1 st owner3 rd owner 2 nd owner Regulator Traditional spectrum management 1 st owner3 rd owner 2 nd owner Regulator Note Spectrum trading

7 ITU Regional Workshop, Amman, 5-7 Dec Making the market work Well-defined tradeable spectrum units Change of use allowed Liberal and simple conditions for trade Long-term confidence in acquired assets

8 ITU Regional Workshop, Amman, 5-7 Dec Long term economic impact? Results of scenario modelling of introducing spectrum liberalisation compared with harmonised base-case *) UMTS Forum study: Thriving in Harmony. Frequency harmonisation: the better choice for Europe, November 2006, available at:

9 ITU Regional Workshop, Amman, 5-7 Dec Liberalisation conclusions The liberal flexibility in itself is a two-sided sword and therefore should not be seen as universal one-fit-all solution The optimum is likely to be achieved through balancing act: –Combination of liberalisation and flexibility with certain degree of harmonisation –E.g. liberalisation and flexibility at a technical level (license conditions) but harmonisation (regional, global) in general spectrum use trajectory, which would lead to positive mass-market effects

10 ITU Regional Workshop, Amman, 5-7 Dec What is re-farming A tool, a process: –used by the NRAs spectrum management policy and frequency planning functions, –whenever it becomes necessary to change the current use of spectrum, including recovering spectrum from existing users for the purpose of re-assignment

11 ITU Regional Workshop, Amman, 5-7 Dec Types of re-farming Service level: - refarming process Fixed Mobile Applications level: P-P links PMP links PMRCellular Technical level: 2G3G 12.5 kHz25 kHzDigitalAnalogue See ECC Report 16

12 ITU Regional Workshop, Amman, 5-7 Dec Implementing re-farming Two steps: –deciding on necessity of re-farming –organising the process, choice of instrument

13 ITU Regional Workshop, Amman, 5-7 Dec Implementing re-farming (II) Administratively managed re-farmingRe-farming through spectrum trading (*) Triggering considerations Legal criteria Financial criteria Political criteria Socio-economic criteria Technical and efficiency criteria Overall analysis performed and decision taken by NRA Choosing instrument of re-farming Business criteria Financial criteria Analysis performed and decision taken by spectrum owner (**) Revoking licence with compensation Incentive pricing of spectrum use Licence termination upon its expiry Voluntary withdrawal Equipment re-tuning Combination / other tools Contract between private entities (**) * - presuming existence of flexible spectrum use clause ** - may be subject to approval by the administration (NRA) See ECC Report 16

14 ITU Regional Workshop, Amman, 5-7 Dec Compensation options New user pays: compensation arrangement is made between the incumbent and new user, usually with mediating role of administration Government pays: compensation to be paid directly from state budget or from NRA income derived from spectrum licensing fees National re-farming fund established: NRA administers a fund created either from the payments by new operators, from licence fees or from the state budget. This fund could be then used for paying compensations for network re- deployment, financial incentives to accelerate re-farming processes, etc.

15 ITU Regional Workshop, Amman, 5-7 Dec Fund: French case study Managed by ANFR Strictly separated from agency budget Ministry of Finance provided initial instalment ANFR first pays the re-location costs to incumbent New users pay to the fund upon receiving authorisations, i.e. already after completion of re-location of incumbent

16 ITU Regional Workshop, Amman, 5-7 Dec Fund: French case study (II) ANFR functions: –proposes schedule –evaluates cost components –supervises carrying out of the process –controls the funds, administers payments Fund active since 1998, initial seed from the state budget: 3 M Funds net capital ultimo 2010: 27.3 M Practical details in ITU-R Rec. SM.1603

17 ITU Regional Workshop, Amman, 5-7 Dec Re-farming results in France Source: ANFR New systemSpectrum amountFormer incumbent

18 ITU Regional Workshop, Amman, 5-7 Dec Conclusions Spectrum use liberalisation is normally intrinsically linked with allowing flexible spectrum use and secondary trading – the practical implementation of these principles and mechanisms would help the more efficient, market-driven use of spectrum Re-farming is additional tool that may assist to resolve collision with obsolete uses, make way for innovative services

19 ITU Regional Workshop, Amman, 5-7 Dec Thank you and farewell! ITU: Committed to connecting the World


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