2 August 2001www.spectrumreview.radio.gov.uk1 Independent review of radio spectrum management: presentation to the Fixed Links Consultative Committee (Radio Systems and Specifications WG) 2 August 2001 Daniel Storey Secretary to the Review

2 August 2001www.spectrumreview.radio.gov.uk2 Overview Rationale: why the review Terms of reference: what’s in, what’s out Consultation process

2 August 2001www.spectrumreview.radio.gov.uk3 Rationale Why review? –Radio spectrum a finite resource facing increasing demands –So greater premium on encouraging dynamically efficient use across the spectrum –RA achieved much in spectrum management innovation in recent years: opportunity to look forward to future framework

2 August 2001www.spectrumreview.radio.gov.uk4 Rationale Why now? –3G auction a £22 billion ‘wake up call’: spectrum management matters to UK GDP; at least £20bn benefits annually from radio –Communications Bill and OFCOM creation: opportunity to set statutory framework –convergence of data, communication and entertainment services, challenging current approach to spectrum and broadcast regulation

2 August 2001www.spectrumreview.radio.gov.uk5 Terms of reference: what’s in “The review will advise on the principles that should govern spectrum management, and what more needs to be done to ensure that all users, including non-commercial users, are focused on using their spectrum in the most efficient way possible. In doing so, it will consider the use of spectrum management tools such as spectrum valuation, pricing and trading.”

2 August 2001www.spectrumreview.radio.gov.uk6 Terms of reference: what’s in “The recommendations that the review produces need to be practical as well as desirable. It will consider not only analytical issues but also the incentives facing different users and realistic mechanisms for improving spectrum management”.

2 August 2001www.spectrumreview.radio.gov.uk7 Terms of reference: what’s out The Review will not –revisit decisions about the creation of OFCOM and the transfer of spectrum management functions to the unified regulator –make recommendations on the resourcing and internal organisation of RA/OFCOM activities devoted to spectrum management

2 August 2001www.spectrumreview.radio.gov.uk8 Consultation process Initial round of consultation meetings, April-May Review consultation paper published 18 June Responses sought by 17 August Bilateral meetings with interested parties, July- October Report to DTI and Treasury Ministers, December 2001

2 August 2001www.spectrumreview.radio.gov.uk9 Consultation paper Guiding principle: all users should face some financial incentive reflecting opportunity cost of spectrum Non-commercial users: –application tailored to particular sector –focus on scope for spectrum charging in broadcasting, defence and some aeronautical services to encourage efficiency and sharing

2 August 2001www.spectrumreview.radio.gov.uk10 Consultation paper: market mechanisms Spectrum auctions: supportive - but how to release more spectrum into the market Spectrum trading: supportive - but restrictions on use hinder trading, innovation, new entrants Spectrum pricing: supportive - realistic pricing can complement where auctions and trading are not politically feasible

2 August 2001www.spectrumreview.radio.gov.uk11 Consultation paper: public services Defence: –more positive incentives (revenue retention) to spectrum release/sharing with the private sector Broadcasting: –inject spectrum valuation into decisions on frequency plan for public service broadcasting –unbundle spectrum charge from competitive bids for commercial TV and radio franchises

2 August 2001www.spectrumreview.radio.gov.uk12 Consultation paper: other issues Transparency: –spectrum licence assignment register? Delegation: –scope for commercial band managers? Deregulation: –scope for commercial services in licence- exempt spectrum, where technology and power constraints deal with interference?