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Executive summary

1.1 Introduction – What this statement covers

There has been a considerable proliferation in the licence-exempt use of the radio spectrum in recent years, ranging from communications applications via personal and local area networks to radio frequency identity tags and remote locking systems. The pace of growth in this sector looks set to continue with the emergence of many new technologies for applications such as ultra-high-speed personal area networks, home automation and short-range anti-collision radar.

The Spectrum Framework Review (SFR)^(-1-) sets out Ofcom’s overall strategy for the management of spectrum through a market-based approach involving spectrum auctions, trading of licences, and spectrum liberalisation. It also outlines, at a high level, our approach to determining whether spectrum use should be licensed or licence-exempt, based on criteria such as economic value derived from spectrum, risk of congestion, required quality of service, and Ofcom’s legal and international obligations.

In accordance with our duties to maximise the value and efficiency derived from the spectrum, the SFR suggests that spectrum use should be licence-exempt if the value that is expected to be derived from the spectrum under such an approach is predicted to be greater than if spectrum use were licensed. It also notes that where harmful interference is unlikely (e.g. where the demand for spectrum in a given frequency band is less than the supply), then licensing may present an unnecessary overhead and a licence-exempt model may be more appropriate. These guidelines are taken as the starting point for this Licence-Exemption Framework Review (LEFR). All the measures proposed in this document are intended to further enhance the efficiency of the licence-exempt use of spectrum, increasing the value that it generates for the UK.

The SFR leaves unanswered a number of more specific issues concerning the management of spectrum used by licence-exempt devices, as listed below.

1. Should spectrum be reserved for exclusive licence-exempt use by a single wireless application (i.e. application-specific spectrum)? Or should multiple applications be allowed to share the spectrum (i.e. spectrum commons)?
2. What type of rules, if any, should be used to manage licence-exempt use of spectrum (e.g. rules of entry and operation within a spectrum commons)?
3. What is the relationship between light-licensing and licence-exemption? What are the circumstances under which one regime is preferable over the other?
4. Is there a frequency limit above which all spectrum use can be made exempt from licensing? If so, what is the value of this limit?
5. Is there a transmission power limit below which all emissions can be made exempt from licensing? If so, what is the value of this limit and how should it vary as a function of frequency?
6. What should our international stance towards licence-exemption be?
7. Should there be any degree of protection towards licence-exempt users of spectrum beyond our current legal obligations?

The LEFR provides a framework within which decisions concerning the management of licence-exempt use of spectrum can be made. By examining the issues listed above, it develops an overall strategy for future licence-exempt authorisations. The LEFR is a guide to be consulted as questions surrounding licence-exempt use of spectrum arise; in just the same manner as the SFR is used as an overall guide on spectrum policy issues.

It is important to emphasise that, while the LEFR presents broad proposals with regards to the licence-exempt use of certain segments of the radio spectrum, any future authorisations of licence-exempt use by Ofcom will generally be subject to specific consultations with associated impact assessments, as appropriate, for the concerned bands.

1.2 A framework for managing licence-exempt use of spectrum

Today some 18 GHz of spectrum is allocated to licence-exempt use in the UK supporting a range of diverse applications, with telemetry services predominantly occupying bands below 1 GHz, broadband wireless communications between 2 GHz and 6 GHz, and short-range radars and relays at 10 GHz and beyond.

Note that transmissions by certain devices such as cellular handsets are exempt from licensing but use spectrum that is licensed to the associated network operator. Such devices fall outside the scope of the LEFR, as their operation is reliant on the existence of licensed transmissions by the network.

Studies commissioned by Ofcom indicate that the contribution to the UK economy of licence-exempt applications is significant. As an example, they assess that the net present value of public Wi-Fi local area networks (without taking congestion and interference costs into account) might be as high as £100bn over the next 20 years. While this is estimated to be only a quarter of the net present value that could be generated by licensed cellular networks over a similar period, it does emphasise the importance of licence-exempt use of the radio spectrum, and the need for an appropriate framework for its management.

In this context, Ofcom has examined a range of relevant issues as outlined earlier. Our conclusions are summarised below.

Application-specific spectrum vs. spectrum commons and associated rules

Ofcom believes that, in general, application-specific spectrum allocations for licence-exempt devices result in inefficient utilisation and fragmentation of spectrum. Ofcom prefers the “spectrum commons” model, where a block of spectrum can be shared by as wide a range as possible of devices, subject to regulatory-defined mandatory constraints on radiated power profiles as functions of frequency, time, and space (i.e. politeness rules), in addition to standardised or proprietary polite protocols. We believe that this model would maximise the value derived from any spectrum set aside for licence-exempt uses.

We also believe that with the emergence of robust interference mitigation technologies, and their incorporation into the radio protocol stack at the design stage, licence-exempt devices will be capable of tolerating far greater levels of interference in the future. However, in order to further mitigate the impact of interference among wildly diverse applications, we propose the adoption of multiple “classes” of spectrum commons. Within each class, applications would have broadly similar interference generating characteristics, as enforced through regulatory-defined politeness rules. In summary, each class would be associated with a particular portion of the spectrum, with licence-exempt devices subject to a specific set of regulatory-defined politeness rules, as well as standardised or proprietary polite protocols.

We nevertheless note that in certain circumstances, for example where safety issues are at stake, application-specific authorisations may be necessary.

Ofcom does not propose the retrospective application of the spectrum commons model to existing licence-exempt authorisations, as this would in many cases result in harmful interference towards legacy technologies which may not be sufficiently tolerant of interference. Such retrospective applications of the model might, however, be envisaged in the future as part of a process of spectrum re-farming and where supported by a favourable impact assessment.

Light-licensing and licence-exemption

Light-licensing is a mechanism whereby the users of a band are awarded non-exclusive licences which are typically available to all, and are either free or only have a nominal fee attached to them. There may be further obligations associated with the provision of a licence such as the need to register the location of any transmitters and possibly to co-ordinate their deployment with other registered users.

By requiring the registration of transmitter locations, and possibly their technical characteristics, light-licensing provides an efficient means for: a) the protection of incumbent services in a band from interference due to new services; and/or b) explicit interference co-ordination among multiple light-licensed operators.

In its latter role, light-licensing is particularly helpful in conjunction with services involving fixed transmitters (e.g. point-to-point radio links), and interference co-ordination among similar applications. We believe that light-licensing is less effective for the management of spectrum where:

• the transceivers are owned and operated by parties who do not have the capability to perform interference analysis (e.g. short range consumer devices);
• the transceivers are operated by a large number of parties, and interference planning cannot be performed in an efficient manner;
• the transceivers correspond to a diverse range of applications, and interference planning is technically complex; and
• the transceivers are mobile, and result in a highly dynamic interference environment.

We believe that in such cases, licence-exemption is more appropriate. We also believe that with the emergence of autonomous self-deployment and sensing technologies, the boundaries between light-licensing and licence-exemption will be increasingly blurred.

Licence-exemption above 40 GHz

The radio spectrum above 105 GHz remains mostly unused due to constraints in transceiver technologies and radio-wave propagation. Future uses of this spectrum are likely to be either short-range (order of metres) links for consumer devices, or medium-range (order of tens to hundreds of metres) point-to-point fixed links. We estimate each of these categories to require between 10 to 15 GHz of spectrum over the next 20 years. Such demand is unlikely to result in congestion and we believe licensing to be an unnecessary burden.

However, not all the spectrum above 105 GHz is suitable for licence-exemption. Focusing on the 105-275 GHz band, we exclude from consideration all frequencies exclusively assigned by the ITU-R Radio Regulations for passive services (via Footnote 5.340)^(-2-). We also exclude from consideration all frequencies assigned for primary use by amateur and amateur satellite services. For the remaining spectrum, we propose a mix of licence-exemption and light-licensing. The latter regime is proposed for frequencies where there exists a potential risk of interference towards future passive services.

With regards to the 40-105 GHz band, we believe that the existing spectrum used in the UK for light-licensed applications is more or less sufficient to satisfy demand for the next twenty years. For licence-exempt use, however, we believe that there will be demand in this band for additional spectrum. For this reason we propose that the 59-64 GHz and 102-105 GHz bands be considered for licence-exempt use. The former band is already available for licence-exempt use in the US and Japan, and is currently being studied by CEPT SE19 and SE24 for Multiple Gigabit wireless systems and intelligent transport systems.

Licence-exemption of low-power transmitters

Subject to a recent EC decision, ultra-wideband (UWB) devices, as characterised by high-bandwidth (greater than 50 MHz) transmissions at power spectral densities below specific limits, are exempt from licensing and may operate on a non-interference, non-protected basis.

It is logical to conclude that any non-UWB device (i.e. of bandwidth less than 50 MHz) that transmits at a power spectral density which is not greater than the UWB limits, and that also complies with all UWB operational constraints, would cause no greater interference than a UWB device. Consequently, it follows that any such transmitter, irrespective of its bandwidth, would be a likely candidate for licence-exemption.

We further note that the path loss experienced by radio waves grows as a function of frequency. In fact, ignoring atmospheric absorption effects, the free-space radio link-budget alone deteriorates with the square of frequency for a specific receiver antenna gain. This implies that a high-frequency high-power transmitter can generate the same amount of co-channel interference as a low-frequency low-power transmitter.

Based on the above arguments, we believe that it is possible to specify generic power limits, such that transmissions at levels below these limits may be exempt from licensing. We propose that such limits should be equivalent to the UWB limits (including all operational constraints other than minimum bandwidth), with a relaxation for frequencies above 10.6 GHz to account for increased path loss with frequency.

International positioning and harmonisation

Harmonisation is to be understood as the common designation of frequency bands for specific uses by a number of countries and the designation of common minimum requirements to avoid harmful interference. It can be achieved by regulatory intervention or through market mechanisms and can be exclusive or non-exclusive.

Harmonisation can be beneficial in terms of achieving economies of scale and facilitating international roaming but can also impose costs if alternative applications or technologies are excluded from the harmonised spectrum. As a general rule, Ofcom believes that harmonisation should be led by market mechanisms as these are more likely than regulation to secure the optimal outcome. However, there may be circumstances which make regulatory intervention necessary in order to achieve the benefits of harmonisation.

Each case needs to be considered individually and be subject to a proportionately rigorous and in-depth impact assessment but, in general, Ofcom considers that the application of market forces to licence-exempt usage is problematic as a regulatory decision is required to make usage exempt from licensing. Hence regulatory harmonisation is likely to be justified. Where this occurs, Ofcom has therefore supported, and will continue to support, the making of EU Decisions regarding harmonisation of exempt usage and supports measures made under the R&TTE Directive^(-3-).

Investigation of interference in relation to licence-exempt devices

The use of spectrum by licence-exempt devices is allowed on the basis that Ofcom would investigate and where necessary take enforcement action in cases concerning non-compliance with the regulations, and thereby, leading to harmful interference. This includes investigating and preventing use of transmitters that are non-compliant with the relevant UK Interface Requirements or R&TTE Regulations^(-4-), as amended.

We do not anticipate that any additional regulatory instruments would be required for the protection of licence-exempt equipment. Harmonised technical standards are expected to be sufficient for mitigating the impact of interference caused by compliant radio transmitters, particulary at high frequencies where radio propagation conditions and the abundance of bandwidth imply a low probability of congestion.

1.3 Proposals for management of spectrum for licence-exempt devices

Based on the analysis reported in this document, we propose the following recommendations with regards to licence-exempt use of the radio spectrum.

1. Where possible, any spectrum released in the future for licence-exempt devices should be used based on the spectrum commons model, wherein devices for multiple applications share the same frequencies, subject to politeness rules^(-5-) and polite protocols^(-6-). While spectrum commons will be the default approach, exclusive licence-exempt use of spectrum by a specific application will be considered on a case-by-case basis where technical constraints, international obligations, or safety issues require such use.
2. Multiple classes of spectrum commons should be considered, with regulatory-defined mandatory politeness rules restricting the diversity of applications within the bandwidth of each class (thereby easing co-existence), and with polite protocols micro-managing intra- and inter-application interference. The specification of polite protocols should be undertaken by appropriate technology standardisation bodies or individual equipment manufacturers, and is beyond the scope of the regulatory bodies.
3. Light-licensing regimes should only be adopted when explicit co-ordination among the operators of the radio devices is both feasible and a technical necessity (i.e. when limitations in technology prevent autonomous self-coordination among the devices). Licence-exemption should be adopted otherwise, subject to adequate protection of incumbent users.
4. The status of operational light-licensed regimes should be regularly reviewed, on a case-by-case basis, with a view to conversion to licence-exemption only if autonomous self-coordination among the light-licensed radio devices is technologically feasible, economically viable, and provides adequate protection of incumbent users.
5. Spectrum in the 275-1000 GHz frequency range should be considered for wide-scale release to allow use by licence-exempt devices. This is with the exclusion of frequencies allocated for spectral line measurements specified by Footnote 5.565.
6. In the 105-275 GHz frequency range, 94 GHz of unused spectrum should be considered for a phased release to allow use by licence-exempt devices.
7. In the 40-105 GHz frequency range, the 59-64 GHz band (currently managed jointly by the MoD and Ofcom)^(-7-), and the 102-105 GHz band (currently unused) should be considered for use by licence-exempt devices.
8. Radio devices transmitting at sufficiently low power spectral densities do not cause harmful interference to incumbent services, and should be exempted from licensing. A power spectral density lower bound for the licensing of radio devices should be considered which: a) is equal to the UWB limits for frequencies below 10.6 GHz; and b) is extrapolated from the UWB limits for frequencies above 10.6 GHz (accounting for increased signal attenuation with frequency). Transmissions below the specified limits may be exempt from licensing^(-8-), subject to compliance with all UWB operational restrictions (other than minimum bandwidth) as specified in EC Decision 2007/131/EC.
9. Ofcom should develop its strategies within harmonisation frameworks both at the European level (CEPT and EU) and at a global level (ITU), proceeding on a case-by-case basis, and supporting each harmonisation decision by an impact assessment. Ofcom should also support initiatives by the EC aimed at speeding up the harmonisation processes where such harmonisation is judged to be beneficial. Harmonisation should impose a minimum of restrictions and be as application-neutral and technology-neutral as possible.

1.3.1 Impact on stakeholders

In developing the above recommendations Ofcom has paid utmost attention to the potential impact they might have on stakeholders. Ofcom has accounted for the interests of existing users, as well as those of future users of currently unused spectrum via the following measures:

• Requirements for frequencies exclusively assigned by the Radio Regulations for passive services (via Footnote 5.340) have been taken into account in our considerations.
• In proposing licence-exemption above 105 GHz, we have excluded bands (used or unused) with primary assignments to amateur, amateur satellite, earth exploration satellite (passive), radio astronomy (passive), and space research (passive) services.
• In proposing licence-exemption of low-power transmissions above 10.6 GHz, we have specified radiation limits which we anticipate would not have a significant impact on existing users of spectrum.

Ofcom is aware that the impact of its Framework Review recommendations will mainly be felt by future users of spectrum. Based on its analysis, Ofcom anticipates that this impact will be beneficial because the recommendations strive to optimise the efficiency and value of the licence-exempt uses of spectrum. In addition, Ofcom believes that these recommendations help to create an environment in which industry stakeholders are made aware of the likely directions of licence-exemption policy development, and find it easier to invest as a result.

Any future authorisations of licence-exempt use by Ofcom will be subject to specific consultations and impact assessments for the relevant bands. Although the above recommendations will form the basis for our future consultations, Ofcom will assess each case individually on its merits.

In general, authorisations for licence-exempt use would be for an indefinite period, but there might be specific circumstances under which we would wish to revoke an authorisation. This would only occur following a detailed review and consultation, and would typically require an appropriate notice period.

1.3.2 Citizens and consumers

We believe that the approaches set out in this document will deliver significant benefits to citizens and consumers. This is because we believe that the right way to further the interests of citizens and consumers is not to unduly restrict the range of applications and technologies that are allowed to use the spectrum, but instead allow the market (rather than the regulator), to decide the best use. In the case of licence-exempt devices, we believe this can be achieved by adopting a “spectrum commons” model of use, where a range of different applications are allowed to share a common set of frequencies subject to appropriate rules and protocols.

Furthermore, under the approaches set out in this document, a significant amount of currently unused spectrum above 105 GHz would be made available for licence-exempt use by short-range devices. We will also exempt from licensing all devices which transmit below specific power levels. These changes will encourage industrial research and development, and bring benefits to consumers and citizens through increased competition in the provision of new and innovative radio communication goods and services.

1.4 Next steps

We expect to publish more detailed consultations on some of the specific issues addressed in this document. The areas of consultation and indicative timelines include:

• How flexible politeness rules for licence-exempt use might be defined and enforced in practice (2008).
• Wide-scale release of spectrum above 275 GHz for licence-exempt use subject to appropriate politeness rules (2008).
• Release of the 102-105 GHz band for licence-exempt use subject to appropriate politeness rules (2008-2009).
• Phased release of the 105-275 GHz band for licence-exempt use (2008-2012).
• Limits on EIRP spectral densities for licence-exemption of low-power transmitters (2008-2009).

Furthermore, Ofcom will support various initiatives at the European level which address issues related to the licence-exempt use of the radio spectrum. Examples of such initiatives include the RSPG Working Group on the collective use of the spectrum, and the CEPT SRD Maintenance Group.

Footnotes:

1.- “Spectrum Framework Review: A consultation on Ofcom’s views as to how spectrum should be managed,” Ofcom, November 2005. See: http://www.ofcom.org.uk/consult/condocs/sfr/.

2.- Note that this exclusion does not apply to licence-exemption of very low-power underlay transmitters, as discussed in Section 7 of this document.

3.- http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=celex:31999L0005:en:html.

4.- http://www.opsi.gov.uk/SI/si2000/20000730.htm#sch9 as amended by http://www.opsi.gov.uk/SI/si2003/20033144.htm.

5.- Politeness rules are constraints on radiated power profiles as functions of frequency, time, and space (e.g. spectral density, duty cycle, and beamwidth).

6.- Polite protocols are interference avoidance mechanisms implemented at the physical layer (PHY) and/or medium access control (MAC) layer of the radio protocol stack, that enable multiple autonomous devices to share the radio resource. An example is the listen-before-talk protocol of Wi-Fi.

7.- Any future licence-exempt authorisations in the 59-64 GHz band would be subject to approval by the MoD, and would correspond to appropriate limits on radiated power characteristics in order to allow co-existence with MoD (and other) use.

8.- The proposed limits are greater than those specified in the EC Decision 2007/131/EC for UWB devices (i.e. bandwidths greater than 50 MHz) at frequencies above 10.6 GHz. As a result, Ofcom would envisage supporting any future EC initiatives to relax the radiation limits for UWB equipment at frequencies above 10.6 GHz. For non-UWB devices (i.e. bandwidths less than or equal to 50 MHz), the proposed limits could apply except at frequencies where EU law requires exclusive use by certain applications.

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