Home > About Ofcom > Accountability > Annual Reports and Plans > Ofcom Annual Report 2006 - 07 > Core areas of activity > Spectrum

Spectrum

Radio spectrum is a valuable and finite resource that underpins all modern communications as well as essential services such as defence, transport, the emergency services and healthcare. The importance of this resource to society is growing; consumers are demanding and using more wireless services, and communications companies are responding to that demand with new products and services.

Research commissioned by Ofcom showed that business activity that is largely dependent on spectrum contributed £37bn, or three per cent, to the UK’s GDP in 2005/6. The research also demonstrated that the economic impact of spectrum use had increased by 50 per cent in just over three years.

In January 2005, Ofcom published its Spectrum Framework Review: Implementation Plan. This set out a programme to release around 400 MHz of prime spectrum in the next few years; to introduce measures that will enable organisations to buy and sell rights to use spectrum; and to reduce or remove the restrictions that limit the use of spectrum for a particular purpose or technology.

In 2006/7, Ofcom made significant progress in delivering the Implementation Plan, with the first Ofcom spectrum auctions, progress in preparing for future awards, and steps taken to deregulate and liberalise the use of the spectrum.

Spectrum release and efficiency

Digital Dividend Review

One of the most significant releases of spectrum in the UK will result from the switch to all-digital television broadcasting beginning in October 2007 and ending in 2012. Digital broadcasting is more efficient in the use of the radio spectrum than analogue. Switchover will therefore allow both a large expansion in the capacity of terrestrial broadcasting and the release of a significant amount of spectrum for potentially new and innovative uses.

The spectrum that can be released – the so-called digital dividend – is in the sought-after UHF band. Transmissions in these bands cover large geographical areas with relatively few base stations, offering network rollout at lower costs when compared to services delivered using higher frequencies. In addition, the amount of spectrum released through switchover is one of the largest in the UK for many years, making the review into the most effective use of the spectrum one of the most important decisions Ofcom will take.

In December 2006 Ofcom published its Digital Dividend Review (DDR) for public consultation, setting out proposals for the most effective use of this radio spectrum.

Ofcom’s primary duty is to further the interests of citizens and consumers. To do this it is required to secure the optimal use of the spectrum. These duties (among others) defined Ofcom’s principal objective for the DDR – to maximise the value of the digital dividend to society.

Ofcom research identified many possible uses – or combinations of uses – of the spectrum. Those include: local digital television; new national digital television in standard or high definition; mobile television; radio microphones; wireless broadband; mobile communications; and low-power applications, such as wi-fi in the home.

Ofcom proposed that the most effective way to maximise the value to society of the spectrum was to give freedom to spectrum users, with appropriate incentives, to decide how these frequencies should be put to use. The consultation document proposed to award licences to use the spectrum by auction as the most open and transparent mechanism available.

Subject to the outcome of the DDR, licences may be awarded in early 2009, with spectrum becoming available on a region-by-region basis as each phase of the digital switchover programme is completed.

In a number of cases, Ofcom made specific proposals that were relevant for particular spectrum uses:

Wireless microphones for community use, such as in places of worship, schools and small theatres. Ofcom proposed to continue making spectrum available for this use, but to deregulate it by making access free of charge and licence-exempt.
Programme-making and professional wireless microphone use. Programme- and film-makers, theatres and events organisers currently use reserved UHF spectrum. This requires co-ordinated access to the spectrum to prevent interference. In the consultation document Ofcom proposed to make a number of UK-wide packages of spectrum available at least until 2012 to ensure smooth transition to a market-based approach. Ofcom published a second, targeted consultation document that set out further proposals for access to spectrum by programme- and film-makers, theatres and events organisers in June after the reporting period.
Local television broadcasting. This is particularly suited to interleaved UHF spectrum – the ‘white spaces’ that exist geographically between the television transmitters to prevent interference. Ofcom proposed to release more than 40 assignments of interleaved spectrum that would be suitable for this use (but not limited to it) in particular geographic areas.
Reserving spectrum for innovation. Ofcom said it was consulting on whether to hold back a small amount of spectrum until after digital switchover, to ensure that new developments – such as low-power wireless uses – have access to UHF spectrum.

Ofcom received nearly 750 written responses to the consultation from a wide range of organisations and members of the public. The views will inform how Ofcom will take forward the proposals, with further publications on the digital dividend later in 2007.

Details of Ofcom’s work in relation to digital switchover can be found on page 31.

2.6 GHz and related bands

In November 2006 Ofcom published proposals for the UK's largest single release of radio spectrum, which could be used for a range of innovative mobile services and other applications.

The consultation sought views on proposals to auction licences for three spectrum bands: 2500-2690 MHz; 2010-2025 MHz; and 2290-2300 MHz. In total, 215 MHz of spectrum would be available.

Ofcom's research identified a number of possible uses for the bands, including: mobile broadband wireless services, using technologies such as WiMAX; mobile multimedia services, such as mobile television; advanced mobile services using technologies such as UMTS; and mobile broadcast, such as wireless cameras for outside broadcasts.

Ofcom proposed to release the spectrum in two separate auctions:

The bands 2500-2690 MHz and 2010-2025 MHz would be packaged into a number of lots and auctioned together, with participants able to bid online for multiple lots.
The bands 2290-2300 MHz would be packaged as a single lot, and auctioned through a sealed-bid process.

For the award of the bands 2500-2690 MHz, multiple licences would be granted and all licences would be tradable.

Other proposed spectrum awards

During 2006/7 Ofcom published proposals for two further spectrum auctions.

In April 2006 Ofcom announced proposals to auction a single licence for the frequencies at 872-876 MHz paired with 917-921 MHz. Possible uses of the spectrum include a range of mobile radio, public safety communications and local mobile voice and data services. The licence would cover the whole of the UK.

In June 2006 Ofcom published proposals to auction licences at the 10 GHz, 28 GHz and 32 GHz frequencies. Potential uses include: video link broadcasting and wireless cameras; high-capacity, high-speed data connections for mobile and fixed broadband networks; and broadband access networks.

During 2006/7, Ofcom also worked closely with the Government to create new opportunities for using the frequency bands occupied by the public sector. The Government is committed to opening up a significant proportion of its holdings by 2010 and, as recommended by the Independent Audit of Spectrum Holdings led by Professor Martin Cave, Ofcom is playing a key role in achieving this by extending market mechanisms to this spectrum. In 2006/7 Ofcom commissioned and, shortly after the reporting period, published a consultants’ report on extending Administered Incentive Pricing to the aviation and maritime sectors. Ofcom also supported trials to develop criteria for public bodies to share the use of certain bands with other users.

Completed spectrum awards

On 20 April 2006 Ofcom completed its first spectrum auction, awarding Wireless Telegraphy Act licences to 12 companies for the 1781.7-1785 MHz paired with 1876.7-1880 MHz bands.

The licences to use the 6.6 MHz of spectrum on a low-power basis were awarded on a technology and service neutral basis, which means that the licensees have the freedom to use the spectrum how they wish, within certain technical limits. In total the auction raised £3.8m. The first products have now been launched using these licences, for example by the Private Mobile Networks business of Teleware.

A second auction was held on 5 October 2006, for the 412-414 MHz paired with 422-424 MHz frequencies. The auction was for 4 MHz of spectrum in four lots, with a single buyer Arqiva securing all four with a bid of £1.5m. Arqiva has said that it is now considering where networks could be deployed using this spectrum, and the scope for acting as a band manager.

After the reporting period, Ofcom completed its third spectrum award in May 2007, issuing a licence to Personal Broadband UK Limited to use the 1785-1805 MHz frequencies in Northern Ireland. This was a coordinated award between Ofcom and the Commission for Communications Regulation in the Republic of Ireland, which also held an auction to use the same frequencies in the Republic. Personal Broadband also won the licence to operate in the Republic, offering the opportunity for the development of wireless services on an all-Ireland basis.

Access to new spectrum frequencies

In 2006/7 Ofcom announced proposals to increase opportunities for the use of the higher-frequency spectrum bands of 71-76 GHz and 81-86 GHz. These bands were not previously in commercial use. However, due to technological developments the bands could be used for very high capacity, point-to-point wireless networks - a potential alternative to fibre-optic cable.

Ofcom announced that because it does not expect demand for the spectrum to exceed supply it would introduce a flexible, light licensing system to use the spectrum. Licensees would pay £50 per link per year, with an unlimited number of assignments possible in the spectrum band. The licensing system was introduced in March 2007.

Spectrum pricing

In July 2006, Ofcom published proposals to introduce pricing for spectrum used for digital terrestrial radio and television.

Known as Administered Incentive Pricing (AIP), the proposals would bring radio and television users in line with most other spectrum users, such as the emergency services and the Ministry of Defence. AIP would reflect the value of spectrum to other potential users and its introduction is designed to ensure that spectrum is used efficiently.

In June 2007, after the reporting period, Ofcom announced that it would introduce AIP for spectrum used by digital terrestrial broadcasting in 2014.

Deregulation and licence exemption

Simplifying licensing

As part of its aim to reduce regulation of radio spectrum and introduce new flexibility, Ofcom announced proposals in July 2006 to streamline the licensing of private radio communications. These are used by many businesses, from taxi and courier firms to major utilities and supermarkets.

Following a consultation, the proposals were introduced in January 2007 and included measures to: reduce the number of licence classes; remove restrictions on technology use; simplify licence administration; and increase the number of licences that can be traded.

In December 2006, Ofcom launched a new online licensing service for ships’ and amateur radio users. The new system reduced the administration and cost for over 130,000 individual licensees.

Ships’ radio licences are now free of charge when obtained online and are valid for the life of the vessel. Licensees are required to verify their details at least once every ten years.

Amateur radio licences are valid for life, with holders also required to confirm their details at least once every five years. Licences obtained online are free of charge.

For key performance indicators on spectrum licensing, see page 64 of Section C.

Legalising low-power FM transmitters

With the increasing number of MP3 players and other personal audio devices, and a growing public demand to be able to connect these devices to radios and in-car entertainment systems, Ofcom announced in July 2006 plans to legalise the use of certain low-power FM transmitters.

Ofcom led negotiations in Europe to develop a common set of technical standards for these devices to limit the potential for interference to other radio equipment. Following a public consultation, Ofcom introduced the Wireless Telegraphy (Exemption) (Amendment) Regulations 2006 on 8 December which legalised the use of certain low-power FM transmitters.

The Regulations also deregulated the use of Citizens' Band services, allowing short-range transmitters – currently used by around 20,000 people – to be used without the need for an Ofcom licence.

Spectrum trading

Spectrum trading allows the transfer of rights to use the spectrum, granted by a Wireless Telegraphy Act licence, from one organisation to another. Trading is one way to ensure the optimal use of the spectrum.

Spectrum trading was introduced at the end of 2004. Approximately 900 licences are currently tradeable, of which approximately 40 have UK-wide coverage and/or comprise significant quantities of spectrum. Thirty-two applications for trades have been made to Ofcom since 2005; 24 trades have been completed, seven applications have been withdrawn and one trade is pending.

During 2006/7 Ofcom authorised 15 spectrum trades. In addition, Ofcom increased the number of licences that can be traded: the licences granted from the three completed spectrum auctions are tradeable and in January 2007 Ofcom announced that it would be increasing the number of existing licences that can be traded in future from around 900 to nearly 35,000. Eleven of the 40 larger licences have now changed hands through trading.

Spectrum enforcement

Illegal broadcasting

Illegal broadcasting, or so-called pirate radio, causes serious interference to the radio spectrum - to the communications systems used by safety-of-life services such as air traffic control and the fire brigade, and to legitimate radio broadcasters such as commercial, community and BBC radio.

Ofcom employs a field force to investigate and take off-air illegal broadcasters. Ofcom takes enforcement action by raiding the studios of the illegal broadcasters and removing the transmitters used for this criminal activity.

In 2006/7, Ofcom undertook 707 separate enforcement operations against illegal broadcasters; this included 48 raids on studios used by illegal broadcasters and the seizure of 661 illegal radio transmitters (see Tables 1 and 2 below). During the year Ofcom secured 61 successful convictions.

In addition, in April 2007 Ofcom published detailed research into illegal broadcasting, which examined levels of listening and measured consumer awareness of interference to safety-of-life services and licensed broadcasters caused by illegal broadcasting. The research informed further work Ofcom conducted later in the year into ways of tackling illegal broadcasting.

Illegal equipment

Ofcom is responsible for taking action against the sale and manufacture of equipment that is not compliant with the European Radio and Telecommunications Terminal Equipment Regulations, the Electromagnetic Compatibility Regulations and the Wireless Telegraphy Act 2006. Non-compliant equipment can cause interference to legitimate radio users.

In 2006/7, Ofcom undertook 63 separate enforcement operations, which led to the removal of 51,000 illegal items from the marketplace. Illegal items seized included mobile phone jamming devices, bugging equipment and low-power, short-range transmitters.

For key performance indicators on spectrum operations, see page 66 of Section C.

Table 1 Illegal broadcasting transmitters seized 2006/7
April 06:	60
May 06:	43
June 06:	40
July 06:	72
August 06:	57
September 06:	46
October 06:	34
November 06:	63
December 06:	54
January 07:	100
February 07:	38
March 07:	54
Total:	661

Table 2 Raids on illegal broadcasting studios 2006/7
Name of illegal broadcaster	Location	Date of raid
Flashback	London	April 06
On Top	London	April 06
Lightning	London	April 06
People’s FM	Leeds	April 06
Sweet FM	Hull	May 06
Rude Awakening	London	May 06
Podgy	London	June 06
Select	London	June 06
Ice Cold	London	July 06
Fresh FM	Leeds	July 06
Underground	Wolverhampton	July 06
Metrolove	London	August 06
Streetz	Birmingham	August 06
Vibe FM	Barrow	August 06
On Top	London	September 06
Surprise	London	September 06
Twilight	Hull	September 06
Renegade	Coventry	September 06
Shine	London	October 06
Extreme	London	October 06
Ice Cold	London	October 06
City Limits	Birmingham	October 06
Streetz	Birmingham	October 06
Streetz	Birmingham	October 06
Asian Air	Birmingham	October 06
Club FM	Glasgow	October 06
Laser Hot Hits	London	November 06
Sweet	London	November 06
Kasapa	London	November 06
Asian Air	Birmingham	November 06
Addictive	Birmingham	November 06
Frontline	Wolverhampton	November 06
Unknown	Oldham	November 06
Rhythm	London	December 06
Bizim	London	December 06
Havit	London	December 06
Hot FM	Birmingham	December 06
Real FM	Birmingham	December 06
Live FM	Norwich	December 06
Powerjam	Manchester	December 06
New Bash	Melksham, Wiltshire	February 07
Underground	Wolverhampton	February 07
Smooth	Willenhall, W Mids	February 07
Hot FM	Birmingham	February 07
Powerjam FM	London	February 07
NRG	London	March 07
Bizim	London	March 07
Lightning	London	March 07