Euro GPR Into to Ofcom Andy Gowans Head of Exempt Technology Team

Ofcom’s Duties Under the Communications Act 2003: Art. 3(1) It shall be the principal duty of Ofcom, in carrying out their functions; (a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition Six areas of specific duties - ensuring: optimal use of the electro-magnetic spectrum a wide range of electronic communications services - including high speed data services - throughout the UK a wide range of TV and radio services of high quality and wide appeal plurality in the provision of broadcasting adequate protection for audiences against offensive or harmful material adequate protection for audiences against unfairness or the infringement of privacy

Ofcom launched in 2003 & assumed the duties & activities of 5 previous regulators & took on 135 new statutory duties Spectrum management Broadcasting standards Television regulation Telecoms regulation Radio regulation

Ofcom launched in 2003.. Responsibilities Duties Approach Governance Assumed duties of 5 previous regulators and took on 135 other statutory duties Telecoms regulation TV & Radio Regulation Spectrum Management Broadcasting Standards Competition Authority (concurrent competition powers with Office of Fair Trading) Duties ‘Further interests of citizens’ ‘Further consumer interests’ Approach Bias against intervention Evidence-based decision making, consultation Governance Statutory public corporation – independent of Govt. Accountable to Parliament (not ministers) Ofcom staff are public servants (not civil servants) PLC Board Structure Board subject to Code of Ethics & Standards Duties to consult, publish annual plan and reports. Funding Funds raised by industry licence fees Ofcom retains a % of revenue from spectrum licenses rest passed to Treasury Staff 861 in Ofcom (July ’09) (from 1152 staff in legacy regulators); Background: Public/private 60/40

Ofcom Board Millie Banerjee (Non Exec) Mike McTighe (Non Exec) Tim Gardam (Non Exec) Philip Graf Deputy Chair (Non Exec) Colette Bowe Chairman (Non Exec) Ed Richards CEO (Executive) Peter Phillips (Executive) Stuart McIntosh (Executive) Background/ Experience Telecoms (Private/Public) Telecoms (Private) Broadcasting (Private/Public) Newspaper Ind (Private/Public) Economist (Private/ Public) Broadcasting (Private/Public) Broadcasting (Private/Public) Telecoms (Private/Public) Non-executive members are appointed by a representative from BIS + DCMS + Ofcom Chairman + Independent assessor (Ofcom chooses recruitment consultants and runs advertisement process Chairman appointed by a representative from BIS + DCMS + Independent assessor CEO appointed by Chairman (Subject to approval by BIS+ DCMS) Executive Members appointed by Chairman and Non Executives Appointment Process The Board’s policy & technical expertise across the sector and independent appointment process

Ofcom – Organisational structure Chairman Chief Executive Director of CEO’s Office General Counsel, communications International Nations & Regions Secretariat Content and Standards Strategy & Market Development Competition Policy Group Spectrum Policy Group Chief Operating Officer Chief Technology Officer Nations & Regions International Secretariat Content Standards Radio & Convergent Media Media Literacy Strategy Research and Market Intelligence Chief Economist Consumer Policy Competition Policy Investigations Competition Finance Telecoms Technology Competition Economics Spectrum and International Policy Spectrum Markets Operations Licensing Operations Contact Centre HR Field Operations Technology

Ofcom’s current strategic framework (2005-2010) Driving forward a market-based approach to spectrum Delivering public interest objectives as platforms and services converge Empowering citizens and consumers and improving regulatory compliance where necessary Promoting competition and innovation in converging markets 9 9

Ofcom’s spectrum duties Ofcom’s duty is to further the interests of citizens … … and to further the interests of consumers, where appropriate by promoting competition OFCOM are required to secure in the carrying out of their functions the optimal use for wireless telegraphy of the electro-magnetic spectrum Communications Act 2003

Spectrum’s value to the UK economy Spectrum is a finite and valuable natural resource. It is the essential input for all forms of wireless communication. Business activity that is largely dependent on spectrum contributed £37bn or 3% to the UK GDP in 2005/6 +59% in real terms SLIDE 4 A hundred years ago this resource had barely begun to be used. Now changes in technology, and the way we live, mean that it is of enormous importance to the modern economy and modern society. Analysis suggests that business activity that is dependent on spectrum usage accounts for around £37bn or over 3% of UK GDP – more than the electricity and water industries combined. And the benefits from use of spectrum have increased by roughly 50% in the last 3-4 years. So the way that spectrum is managed matters hugely, to businesses, policy-makers like us – and ultimately to the citizens and consumers whose interests we are here to serve. *estimate of consumer + producer surplus Source: Europe Economics, 2006

Why is spectrum regulated? ► To prevent harmful interference ◄ But….. In practice, governments and regulators have also pursued many other objectives: public policy – secure delivery of public services, often in lieu of funding industrial policy – equipment standards goals for industry structures & competition Historically, the management of spectrum has been very interventionist: regulatory control over who may use spectrum, for what, and how present distribution of the spectrum is a product of regulation over many decades severe scarcity in critical bands

There are three ways to manage spectrum Command & control All decisions made by the regulator Market mechanisms Decisions made in the market Licence-exemption Regulator sets rules, but users not licensed Approach that has historically been adopted for over 90% of the spectrum Approach advocated by Cave Reviews in UK. Trading, liberalisation, technology & use neutrality Approach currently adopted for 9% of spectrum. Some argue for radical increase

Ofcom’s spectrum vision Spectrum should be free of technology, policy and usage constraints as far as possible It should be simple and transparent for licence holders to change the ownership and use of spectrum Rights of spectrum users should be clearly defined and users should feel comfortable that they will not be changed without good cause Spectrum Framework Review, June 2005

Ofcom’s implementation plan Spectrum Trading – Allow licensees to buy and sell (and lease and hire) some or all of their spectrum usage rights Spectrum Liberalisation – the progressive removal of restrictions on technology and usage and replacement with minimum technical conditions needed to prevent harmful interference Spectrum Awards – Make unused spectrum available to potential users as quickly as possible, compatible with an orderly process.

Regulatory harmonisation – with exclusive access Regulatory harmonisation – without exclusive access Market-led harmonisation Standardisation Interoperability Technology and service neutrality available Technology and service specific Increasing opportunity for markets to determine spectrum use Increasingly flexible types of harmonisation

Other spectrum activities – R &TTE directive Under EU New Approach for supporting a single market About placing products on the market Aims to remove/prevent barriers to trade Allows the creation of an internal EU market for all products Based on the free circulation of goods, services and people R & TTE Directive BIS has the lead with Ofcom support Currently being reviewed – still in early stages allows different routes to placing products on the market based on declaration of conformity Main Committees / Interfaces TCAM & R&TTE review sub committees ADCO and EMC working group European Standards Organisations (CENELEC, ETSI)

Overview of spectrum developments in EU Spectrum summit and the RSPP Revised European Directives adopted December 2009 Member States have 18 months to implement New Digital Agenda Commissioner, Neelie Kroes (NL) Took office 10th Feb 2010 Spectrum Summit (22-23 March) Hosted by European Commission and Parliament Workshop(s) and plenary session Output to feed into RSPP Radio Spectrum Policy Programme (RSPP) RSPG Opinion Commission proposals (expected mid 2010?) Subject to Council and Parliament co-Decision procedure 20

EU Activities - Radio Spectrum Policy Group (1) Change to RSPG working arrangements in new institutional set up RSPP and advice to European Parliament Chairing arrangements Multi-annual Radio Spectrum Policy Programme (RSPP) Hungary leading Input to both Spectrum Summit and RSPP Digital Dividend Ireland leading 2 reports (June and Nov) Report structure agreed, will include chapters on spectrum efficiency, frequency planning and cognitive technologies.

EU Activities - Radio Spectrum Policy Group (2) EU participation in international negotiations France lead Focus likely to be on preparations for WRC-12 Competition aspects in spectrum assignment and usage (joint with ERG) Italy/UK lead Likely to involve three pieces of work Market definition and spectrum Transitional issues arising from implementation of revised GSM Directive Effects on competition of sharing (infrastructure or spectrum) Continuation of work on cognitive technologies Work on radio issues Next meeting 9 June (or possibly in March)

EU Activities - Radio Spectrum Committee 800MHz Decision 2010 Work programme Implementation of the 3.4-3.8GHz Decision Vote on SRD amendments and next update cycle Spectrum implications of Lisbon Treaty Next meeting 17-18 March 23