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Spectrum liberalisation

Consultation published: 17|09|2004
Consultation closes: 12|11|2004

Executive summary

Spectrum liberalisation is the reduction or removal of restrictions on the use that can be made of spectrum

1.1 Traditionally, wireless telegraphy licences have specified, often in considerable detail, the use to which spectrum can be put and the means by which that spectrum can be exploited - including for example details of the service that can be offered and the technology that can be deployed. Spectrum liberalisation involves the reduction or removal of these restrictions.

Ofcom believes that spectrum liberalisation will be of significant benefit to UK citizen-consumers

1.2 Ofcom expects that spectrum liberalisation and trading will make it easier for entrepreneurs and innovators to enter the market, deploy new technologies and applications, and compete with existing players; they will make it easier for spectrum to migrate from relatively low value uses to higher value ones. Although spectrum trading and liberalisation are distinct developments, they are complementary. A recent report for the European Commission¹ estimated the benefits of spectrum trading with liberalisation to be some €9bn per year across the EU, predominantly arising from the earlier adoption of new technologies and applications that trading and liberalisation would allow. The benefits of spectrum trading alone, without liberalisation, were estimated to be about one tenth of this.

But spectrum liberalisation is not without risk

1.3 Some restrictions on the use of spectrum are essential, in order to prevent unacceptable interference between neighbouring spectrum users. Certain restrictions may also be necessary in order to comply with international obligations and to promote certain other public policy goals. The challenge is to maintain sufficient control over the use of spectrum to ensure that interference is kept under control (and other obligations and objectives are met), while allowing as much flexibility of use within those constraints as possible, thereby maximising the potential value that can be derived from the use of spectrum for the benefit of UK citizen-consumers.

Two mechanisms are available to Ofcom to implement spectrum liberalisation

1.4 The first involves requests from licensees for changes to licences to reduce or remove restrictions. This document presents specific variations, for a number of licence classes that are considered to be intrinsically unproblematic on spectrum management grounds and to which Ofcom would therefore normally expect to be able to agree. Ofcom would welcome requests for other types of variation although there would be greater a priori uncertainty about whether or not Ofcom would be able to agree to those without more detailed assessment. To facilitate this process, Ofcom will give guidance about the considerations it would apply when considering licence variation requests.

1.5 The second mechanism involves Ofcom changing existing licences generically to make them less usage and technology specific. This would allow licensees to make certain types of change to their use of spectrum without needing the prior consent of Ofcom. Changes outside those permitted by the liberalised licence would still require Ofcom's consent.

1.6 Of these two mechanisms, the first allows Ofcom to exercise control over interference (and other issues) on a case-by-case basis and to minimise the risk of unacceptable interference. However, licensees (and the industry more generally) will not have certainty about what will be permitted until Ofcom has given its consent to a specific change. This mechanism is also administratively burdensome.
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1.7 The second mechanism is superior to the first in that it provides more certainty and is less burdensome administratively. However, implementation is more challenging as spectrum usage rights need to be defined generically in a way that is more technology and usage neutral while maintaining the necessary degree of control over interference.

1.8 Ofcom plans to use both mechanisms when liberalisation is introduced later this year. But for practical reasons we propose to rely more on the first approach initially. The second approach should be introduced for certain types of licence in 2005, when a new assignment tool is available. More radical changes to licences to make them more technology neutral will be discussed in Ofcom's forthcoming Spectrum Framework Review published later this year.

Protection for neighbouring users

1.9 This document sets out a number of protections for existing spectrum users. One proposal is that we should publish guidance for licensees about the levels of interference that Ofcom expects could be encountered from other services. It will be used by Ofcom as a key criterion in deciding whether to allow changes to licence terms, such as those relating to transmission power or geographical coverage, and will serve as a reference for Ofcom in resolving interference complaints. This guidance will be based on the existing criteria used when deciding whether or not to make new assignments.

1.10 Ofcom would not expect to agree to the removal of a restriction where the change would result in the lowering of spectrum quality of neighbouring licensees below the benchmark level. There will be no guarantee for users that interference will fall within these levels in practice, but Ofcom will continue to investigate and resolve interference complaints.

Scope and responses

1.11 This document discusses our general approach to liberalisation, and how it might be applied in detail in three licensing sectors in 2004 and 2005: business radio, fixed wireless access, and terrestrial point-to-point fixed links. 2G and 3G services are not discussed as Ofcom expects to publish a further document relevant to these classes before the end of 2004. However, the general issues discussed here are relevant to all spectrum users.

1.12 Your comments are invited by 12 November 2004.

The full text of this consultation is available in PDF format via the link at the top right of this page.