1. ©Ofcom The Spectrum Framework Review A consultation on how radio spectrum should be managed 23 November 2004

2. ©Ofcom1 Contents The Scope of the Review The Radio Spectrum & its Current Allocation Ofcom’s Spectrum Management Agenda The Key Strategic Issues Our Vision for Spectrum Management

3. ©Ofcom2 The aims of the Review To enable current and future users of the radio spectrum to have enough information and certainty to make major investment decisions To provide a framework which Ofcom can apply to specific spectrum issues

4. ©Ofcom3 How the Review relates to other activities The Spectrum Framework Review: Setting out our overall strategy for managing radio spectrum November 2004 Spectrum Trading and Liberalisation A sequence of documents setting out how we will implement trading of licenses November 2003 – December 2004 Detailed policy statements 2005 onwards The SFR Implementation Plan: Detailed plans for realising the vision of the SFR December 2004 Time Issues feeding through

5. ©Ofcom4 Contents The Scope of the Review The Radio Spectrum & its Current Allocation Ofcom’s Spectrum Management Agenda The Key Strategic Issues Our Vision for Spectrum Management

6. ©Ofcom5 Medium Wave Radio The Radio Spectrum Electric Waves Radio Waves Infra-red Visible Light Ultra Violet X-Rays Gamma Rays Cosmic Rays 303 300 Long Wave Radio FM Radio GSM 3G Microwave Radio Links TV VLFLFMFHFVHFUHFSHFEHF Radio Spectrum kHzMHzGHz 330300 DECT WiFi Bluetooth TETRA LMDS Decreasing Range Increasing Bandwidth Increasing Range Decreasing Bandwidth 3 “Sweetspot”

7. ©Ofcom6 Current Allocation of the Radio Spectrum Note: Weighted by Frequency

8. ©Ofcom7 Contents The Scope of the Review The Radio Spectrum & its Current Allocation Ofcom’s Spectrum Management Agenda The Key Strategic Issues Our Vision for Spectrum Management

9. ©Ofcom8 Ofcom’s Spectrum Management Agenda The Given: Fulfil our statutory duties The Ambition: Make the UK the leading country for wireless investment & innovation Ensure optimal use of the spectrum Take account of the needs of all spectrum users Maximise economic benefits of the spectrum A better signposted approach to spectrum, giving more certainty in the market A flexible approach to spectrum, providing opportunity for innovation A competitive communications market, providing opportunity for returns on investment

10. ©Ofcom9 We operate in an international framework ITU Radio Regulations harmonise allocations at a broad level - eg fixed, mobile, broadcasting. The NATO treaty commits us to allowing exclusive use for some military bands UK has signed up to numerous (non- binding) CEPT frequency harmonisation measures There are binding EU Directives/ Decisions covering cellular and paging services

11. ©Ofcom10 Contents The Scope of the Review The Radio Spectrum & its Current Allocation Ofcom’s Spectrum Management Agenda The Key Strategic Issues Our Vision for Spectrum Management

12. ©Ofcom11 There are three possible ways to manage spectrum Command & Control Zone Ofcom manages it Market Forces Zone Companies manage it Licence-exempt Zone Nobody manages it Approach that is currently adopted for about 94% of the spectrum Approach advocated by Cave and implemented by trading and liberalisation Approach currently adopted for 6% of spectrum, some argue for radical increase We need to decide the right balance between the Zones Zones are currently demarcated by frequency. However, there are also dimensions of power and time C&C MF L-E

13. ©Ofcom12 The Command and Control Zone Still needed in some areas – Spectrum controlled internationally, eg HF, satellite – Spectrum where international roaming is essential, eg maritime, aeronautical – Uses we wish to preserve, eg radio astronomy The status quo – The regulator decides on how much spectrum is needed for each application and who gets it. – No variations are allowed – The approach followed for the last 100 years But no longer the preferred option – The regulator cannot know as much as the market and so cannot make decisions as well as the market – The Cave Report strongly recommended moving away from this model C&C MF L-E Today94%21%2010

14. ©Ofcom13 The Market Forces Zone Allocation (what the best use is for the spectrum) Assignment (who the best user is of the spectrum) Existing spectrum: Trading between users “New” spectrum: Auctions Liberalisation Phase 1: Users ask Ofcom if they can change the use Liberalisation Phase 2: Technology-neutral spectrum usage rights to allow users to make the change without consulting Ofcom C&C MF L-E Today0%72%2010

15. ©Ofcom14 The Licence-exempt Zone Increasing licence-exempt allocation to 7% of total spectrum allows enough for everyone to install equipment capable of delivering 100Mbits/s data services in homes or offices C&C MF L-E Key area for innovation but we do not need much more Focus on removing restrictions, eg higher power in rural areas Today6%7%2010

16. ©Ofcom15 Deregulation of existing licence classes There are a number of areas where we cannot allow change of use but do not need to actively manage the band Users in these bands may not need to be directly licensed by Ofcom However, there are many complexities – eg call signs are often linked to licenses We currently issue 209,000 licences, 75% in areas where we might be able to reduce the needs for licensing Aviation Amateur Maritime CB 9,000 63,000 61,000 19,000 Areas under consideration

17. ©Ofcom16 Interference limit Upper power limit Power Frequency UWB Should we allow it? The subject of a separate consultation to be issued shortly C&C MF L-E C&C ZoneMF ZoneL-E Zone Upper power limit Power C&C ZoneMF ZoneL-E Zone Frequency Exploiting the power dimension - UWB

18. ©Ofcom17 Cognitive radios access the spectrum at full power during the time the licence holder is not using it We could allow this as an “easement” to property rights – However, licence holders could act in a manner to make it worthless (eg by transmitting constantly) – We are not sure it can be implemented technically in this fashion We would rather allow the licence holders to permit it in a direct transaction with the cognitive radio user C&C MF L-E Power C&C ZoneMF ZoneL-E Zone Time Power C&C ZoneMF ZoneL-E Zone Time Frequency Accessing the time dimension - Cognitive radio

19. ©Ofcom18 Contents The Scope of the Review The Radio Spectrum & its Current Allocation Ofcom’s Spectrum Management Agenda The Key Strategic Issues Our Vision for Spectrum Management

20. ©Ofcom19 The Ofcom 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

21. ©Ofcom Next Steps

22. ©Ofcom21 The Implementation Plan The Spectrum Framework Review: Implementation Plan will be published before Christmas, covering: – Ofcom views on a group of interrelated mobile spectrum policy issues relating to trading and liberalisation – Ideas for awarding unused or under-used spectrum Our approach reflects the constraints on us from: – The use of spectrum in the past to achieve policy goals – Industry structures created in the past by spectrum regulation – The need for an orderly transition to the new approach – European regulatory structures – Resources within Ofcom and in the market to award new spectrum

23. ©Ofcom22 Forthcoming proposals and statements Policy proposals in the Implementation Plan – Applying Ofcom’s trading and liberalisation policies to spectrum used for mobile services Spectrum awards proposed in the Implementation Plan – 15 bands which will be made available over the next few years Trading and liberalisation initiatives – Trading Regulations will come into force mid-December – Liberalisation Statement will be published in the next two months

24. ©Ofcom Spectrum Framework Review Q&A