1. The Changing World of Spectrum Management 25 October 2002 IEE Conference, London Mike Goddard BSc CEng FIEE Director, Spectrum Policy Radiocommunications Agency, UK

2. Earlier developments in spectrum management Before 1998: –planning by Radiocomunications Agency –cost based pricing –comparative selections –limited licence exemption Wireless Telegraphy Act 1998 introduced: –administrative incentive pricing –auctions –spectrum efficiency scheme

3. Recent activities Spectrum auctions for 3G and broadband Progressive phasing in of administrative incentive pricing including for defence and other government users Attention to use of licence exempt spectrum Published spectrum strategy

4. A changing world Convergence of broadcasting, telecommunications and internet Fast and unpredictable changes in technology and consumer demand

5. Preparing for the future Published Spectrum Strategy - regularly updated Independent Review of Radio Spectrum Management by Professor Martin Cave - published March 2002 –broadly welcomed –UK government response published October 2002 Draft Communications Bill published May 2002 Scenario planning: Four endstates have been developed for 2010

6. UK Spectrum Strategy Published and regularly updated Covers entire radio spectrum and all radio services Describes current usage and planned developments Current version available in hard copy, on CD-ROM and on RA web site (www.radio.gov.uk) Feedback welcome

7. Independent Spectrum Review Commissioned by Chancellor of the Exchequer and Secretary of State for Trade and Industry Remit “to advise on the principles that should govern spectrum management and what more needs to be done to ensure that commercial and non-commercial users are focused on using spectrum as efficiently as possible”.

8. Independent Review: Timetable Commissioned March 2001 Consultation Paper published June 2001 Review published 6 March 2002 Comments invited by 10 May 2002 Government response published 15 October 2002

9. Independent Review: Key Principles Importance of effective management to maximise economic and social benefits Maximise use of market-based mechanisms to supplement regulation Reserve spectrum for public services and use pricing as incentive for efficient management Minimise technical and regulatory restrictions on use of spectrum where practicable

10. Recommendations and Government Response Spectrum Management Tools Introduce Spectrum Trading as soon as possible All classes of users should face incentive through Spectrum Pricing at realistic levels Remove restrictions on use of licence-exempt, PMR and FWA bands Trading to be introduced through Communications Bill Roll-out of Spectrum Pricing to continue, subject to criteria in 1998 Act Removal of restrictions to be considered case by case - action already taken in some cases

11. Recommendations and Government Response International Issues UK should seek greater flexibility in International allocations Proposals for harmonisation should be rigorously justified Current harmonisation measures should be regularly reviewed Government agrees with these recommendations, subject to further study of technical and economic implications of greater flexibility in international allocations

12. Recommendations and Government Response Defence Government to publish Peacetime Frequency Allocation Table MoD to carry out comprehensive audit of frequency assignments MoD to pay full opportunity costs of spectrum but retain income generated by leasing Will publish PFAT by end 2002 initial audit programme to be completed by end 2002 MoD will continue to pay on comparable basis to private sector - financial implications of leasing to be studied

13. Recommendations and Government Response Other Public Services Spectrum Pricing should be applied to broadcasters, taking account of existing regulatory agreements Spectrum Pricing to apply to UK based radars Public safety users to have guaranteed spectrum access but subject to full Spectrum Pricing Pricing for tv spectrum after full consultation - not before 2006 (analogue) 2010 (digital) Government agrees in principle but need for full consultation with users Government accepts recommendations on public safety users

14. Draft Communications Bill - 1 Will be revised as needed to accommodate UK Government response to Independent Review Draft Bill aims to: –create most dynamic and competitive communications industry in the world –ensure universal access to a choice of diverse services of the highest quality –safeguard citizens and consumers

15. Draft Communications Bill - 2 : New Regulatory Framework Establishment of new independent statutory body Ofcom, to be responsible for media ownership rules, public service broadcasting and regulatory regimes for telecommunications and use of spectrum Ofcom will be responsible for economic regulation, content regulation and spectrum management Ofcom will comprise RA, Oftel, ITC, RAu and BSC Ofcom will have concurrent powers on competition with OFT Ofcom will adopt open and participatory approach

16. Draft Communications Bill - 3 : Ofcom duties (all co-equal) Furthering consumer interests Dynamic and competitive markets Encouraging optimal use of radio spectrum in interests of all Wide range and high quality broadcast content Protection from harmful or unfair content and unwarranted invasions of privacy

17. Draft Communications Bill - 4 New spectrum management tools –Spectrum Trading –Recognised Spectrum Access

18. Spectrum Trading - 1 What is it: facility to allow licences to be transferred directly from one user to another within a regulatory framework with safeguards. Simple forms of trading allow change of ownership only, more complex forms can allow eg change of use and leasing What can it do: provide the benefits trade brings to many markets

19. Spectrum trading - 2 What are the benefits of spectrum trading –Lets those who are nearest to radio spectrum use make decisions in a clear regulatory framework with competition oversight –Allows spectrum to move quickly from lower value to higher value users and services. At each trade both buyer and seller gain. –Lowers the transaction costs of accessing spectrum, increases competition and facilitates innovative products and services –Facilitates quick response to changing demand with sources of spectrum other than the national regulator

20. Spectrum trading - what are the safeguards and problems? Not all spectrum is suitable for trading eg essential public safety All trade in all markets takes place within a regulatory regime to achieve benefits and avoid problems eg anti-competitive outcomes Important requirements in EU Framework Directive (notification, making public, competition not to be distorted and no change of use of harmonised frequencies)

21. Spectrum trading- next steps 1 Believe success or otherwise of spectrum trading lies in the detail and there are many areas eg: –how to define licences (eg specified transmitters, or by boundary limits on emissions) –types of trade to allow eg sale, lease –what to allow alongside trade eg change of use –what information the regulator should make available eg about current licences, about other trades –how should trade start eg auction or not –fees payable to regulator and their effect

22. Spectrum trading- next steps 2 Experience from spectrum trading in other countries, and from trading in other markets, is being taken into account UK Government consultation closed in early October 2002. Thank you to all who sent in responses, these are now being analysed. Consultation details are on www.radio.gov.uk

23. Recognised Spectrum Access 1 New concept to complement licensing RSA would confer formal recognition for spectrum planning purposes on services not subject to licensing, eg satellite downlinks Where appropriate would provide a mechanism for charging such services for spectrum access RSA would offer operators enhanced security that their spectrum use is officially recognised

24. Recognised Spectrum Access 2 Would allow trading of spectrum shared between terrestrial and satellite transmitters, because RSA’s would be tradable and interchangable with licences UK Government consultation closed in early October 2002. Thank you to all who sent in responses, these are now being analysed. Consultation details are on www.radio.gov.uk

25. Spectrum management tools for an unpredictable future Scenario planning –impossible to predict the future –possible to predict alternative futures (scenarios) and evalute the impact of each Four scenarios for the converged world of 2010 –Internet Convergence –Digital Islands –Total Mobility –Broadband Revolution New spectrum management tools can be referenced against the scenarios

26. New Approaches to National Spectrum Management The regulator must continually seek new tools, evaluate their effectiveness, adjust the tools and keep both the tools and the toolkit under review in order to get the most out of the Radio Spectrum. UK’s plans for spectrum trading and recognised spectrum access are part of this process of developing, using and improving spectrum management tools.