Home > Consultations > Consultation Documents > Business Radio Trading  > Executive Summary

Executive Summary

Ofcom’s approach to spectrum management

1.1 Ofcom has set out its approach to spectrum management in the Spectrum Framework Review (SFR).The central theme of the SFR is that the management of the radio spectrum can be carried out most effectively if market forces are harnessed to a significantly greater degree than in the past.

1.2 Key policies designed to further the development of this new approach include:

• spectrum trading - allowing holders of wireless telegraphy licences to transfer all or part of their rights and obligations under their licence(s) to another party;
• spectrum liberalisation - the reduction or removal of restrictions on the use that can be made of spectrum while continuing to avoid unacceptable increases in interference, and;
• spectrum awards – releasing un-used spectrum into the market.

1.3 This document details plans to take forward the implementation of spectrum trading and liberalisation in relation to the Business Radio sector. Ofcom is consulting separately on proposals to review wireless telegraphy licence fees for a range of sectors, including Business Radio. Details of this exercise can be found at http://www.ofcom.org.uk/consult/condocs/pricing06/, although an overview of proposals, as they relate to Business Radio, is provided in this document.

A phased approach to change

1.4 Ofcom believes that a phased approach to liberalising spectrum management is appropriate. Phasing allows the appropriate balance to be struck between establishing a flexible market based approach to spectrum management as quickly as possible, and ensuring appropriate preparation is completed prior to changes being introduced.

1.5 Phase one is currently in place. In this phase, users are able to ask Ofcom to change their licence, for example to remove the restriction to a particular technology. Ofcom will consider each request on its merit but has indicated the various categories of change to which Ofcom would normally expect to agree while making clear that it also encouraged applications outside these categories.

1.6 Phase 2 of liberalisation involves further extending the scope of trading and making licences more intrinsically flexible (i.e. users can make certain changes to the characteristics of their operations without seeking Ofcom approval). This document deals with Phase 2 measures as they apply to the Business Radio sector.

1.7 Going forward Ofcom is consulting on a new approach that could possibly be taken to the next phase of liberalisation – specifying technical restrictions in licences in terms of spectrum usage rights (“SUR”) which is available on: http://www.ofcom.org.uk/consult/condocs/sur/

Proposals for the Business Radio Sector

1.8 The Business Radio sector encompasses a wide range of services and users from High Street taxis and couriers to large businesses and the Emergency Services. As previously highlighted significant progress has already been made in this sector with certain classes of licence already tradable and a range of liberalisation measures already implemented. Ofcom proposes to continue with a progressive extension of its liberalisation approach and specifically the proposals set out in this document detail how Ofcom plans to:

• introduce significant additional liberalisation to the sector through the adoption of more flexible licences and spectrum management techniques;
• extend the ability to trade spectrum to a considerably increased range of licence classes and licensees;
• simplify and rationalise our licensing arrangements to make them simpler and more flexible, adopting more deregulatory approaches to authorisation where appropriate;
• update our approach to setting fees to reflect a liberalised Business Radio environment.

Extending Spectrum Trading

1.9 In 2004 Ofcom introduced trading to the Business Radio sector. This initial implementation focussed on licence types that were for large geographical areas and assigned exclusively to a single user. The licence classes in question were analogue PAMR, National Paging, Data Network, CBS and National & Regional PBR.

1.10 Ofcom now proposes to extend trading to a far greater range of licence classes in the Business Radio sector, and in so doing provide the facility to trade to over thirty five thousand licences. Exhibit 1.1 details the current licence classes that we now propose to make tradable in 2007.

1.11 Ofcom proposes to support a wide range of different types of transfer for these licences including the ability to partially trade parts of their spectrum and, for certain licence classes, by allowing the partial trading of geographical areas. Such changes allow licensees the flexibility to trade unused elements of their spectrum to those who might wish to make use of it.

Introducing more flexible licences

1.12 Ofcom’s general policy is to set technical restrictions that are the minimum necessary to provide adequate protection against harmful interference. This is because optimal use of the radio spectrum is more likely to be secured if users decide, rather than Ofcom dictates, what technology to use or service to provide in a particular frequency band. Imposing the minimum necessary constraints will increase users’ flexibility and freedom to respond to changing conditions, and to make best use of the valuable spectrum resource.

1.13 In January 2005, Ofcom liberalised elements of its approach to the management of licences in the Business Radio sector. These changes included more flexibility and equipment choice enabled by the introduction of a single set of equipment requirements and, for certain licence classes, the removal of distinctions based upon the type of use spectrum may be put to. For the most part, licensees wishing to take advantages of these new flexibilities are required to apply to Ofcom for a variation to their licence.

1.14 Ofcom now wishes to extend liberalisation further in the Business Radio sector by:

• making licences intrinsically flexible – removing the need for licensees to seek individual approval from Ofcom for some specific changes to the way they wish to use spectrum;
• removing much of the current usage based segmentation of Business Radio spectrum – allowing users far greater choice as to what purpose spectrum is put to.

1.15 To do this we plan to use the technical capabilities of a new assignment and spectrum management tool, MASTS (Mobile ASsignment Technical System), to achieve this increased flexibility whilst ensuring the risk of interference is properly managed. The tool, combined with a range of other measures, will enable us to greatly reduce the number of different licence types (from the current 21) replacing them with fewer, more flexible and better licence classes.

1.16 We also plan to greatly improve the level of information available about the expected quality of spectrum. We will do this through the use of improved Spectrum Quality Benchmarks (SQBs) and by providing greater clarity as to the rights and obligations of licences and the flexibilities they can offer. Exhibit 1.1 also summarises our proposals for liberalising licensing in the Business Radio sector.

Simplification and rationalisation

1.17 Currently in the Business Radio sector there are 21 licence classes. Ofcom proposes to greatly simplify current arrangements by delivering fewer, more flexible licence classes. We have also examined ways in which the current licensing approach could be improved to remove unnecessary restrictions and reduce the regulatory burden on licensees and this document sets out proposals for ways in which we intend to streamline and simplify our licence administration.

Extension of licence term

1.18 Ofcom intends to vary those licence classes which are made newly tradable to have an indefinite a rolling licence term, with a 5 years minimum notice period for revocation for spectrum management reasons except for certain cases such as a breach of licence terms, non payment of the annual fee, the grounds set out in paragraph 4(5) of the Wireless Telegraphy Act 1998 (national security or compliance with an EU or International obligation), breach of spectrum regulations or a direction by Ofcom or the Secretary of State.

1.19 This approach is designed to give licensees greater certainty. The changes would bring the newly tradable licences into line with those classes made tradable in 2004.

Publication of Information

1.20 Ofcom recognises that access to a range of accurate and up-to-date information is a prerequisite for a successful market. Ofcom currently publishes a range of information about licences and transfers through its Spectrum Licensing Portal (and specifically the Wireless Telegraphy (WT) Register). This information is restricted to licence classes that are currently tradable. With the extension of trading we also propose to extend publication of this information to the newly tradable licence classes.

Scope and Responses

1.21 This document discusses specific proposals for the extension of our liberalisation policies to the Business Radio Sector. Proposals to extend trading to licences within a range of new classes, to liberalise licensing arrangements, and to rationalise and simplify our approach in this sector are detailed. In addition related proposals to move licences to a minimum notice period and extend the WT Register to include all newly tradable licences are also set out.

1.22 Your comments are invited by 15 September 2006.

Current Products	Proposals
Business Radio (Public Wide Area Paging) Business Radio (Public Mobile Data, Non-Voice) Business Radio (National and Regional) Business Radio (Tetra Digital PAMR) Business Radio (CDMA Asset Tracker) Business Radio (Remote Meter Reading Operator) - Exclusive channel	Trading measures Outright transfers of all rights and obligations under a licence. Extension of trading to UHF1 (420-450 MHz). Partial transfers Spectrum segmentation to a minimum channel width of 6.25 kHz. Geographical segmentation to a minimum trading unit (50 km square grid). Liberalisation measures Merge existing classes into single Area Defined licence class giving users wider flexibility to change use and application without reference to Ofcom. Single set of flexible technical requirements. Administration Move to on-line application.
Business Radio (Analogue PAMR) Business Radio (Common Base Stations) Business Radio (Remote Meter Reading Operator) - Shared channels Business Radio (Wide Area Speech and Data Systems) Business Radio (Wide Area One-Way Paging and Speech Systems) Business Radio (Wide Area Distress Alarms) Business Radio (Band 1 and Band III CBS) Business Radio (IR2008 Data) Business Radio (On-Site Speech and Data Systems) Business Radio (On Site Hospital Paging and Emergencies Speech Systems)	Trading measures Outright transfers of all rights and obligations. Extension of trading to UHF1 (420-450 MHz). Partial transfers Spectrum segmentation to a minimum channel width of 6.25 kHz. Liberalisation measures Merge existing classes into single Technically assigned licence class. Introduction of MASTS tool allowing greater change of use, application and mobile number without Ofcom consent. Single set of flexible technical requirements. Administration Move to on-line application.
Business Radio (Standard)	Product withdrawn from July 2007
Business Radio (UK General) Business Radio (On-Site Local Communications) Business Radio (On-Site One-Way Paging and Speech) Business Radio (Self-Select) Business Radio (Suppliers)	Liberalisation measures Single set of equipment requirements. Administration Rationalisation of product structure. Adoption of a single application process. Move to five years payment period. Move to on-line application.

• Business Radio Trading & Liberalisation [pdf]
  Full Print Version

Back to top