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What is the policy and legal framework?

Basics

What is spectrum trading?

Spectrum trading allows the holders of certain wireless telegraphy licences, granted by Ofcom under section 1 of the Wireless Telegraphy Act 1949 to transfer all or part of their rights and obligations under their licences to another party. Trading is entirely voluntary. Ofcom is not concerned with the underlying contractual arrangements which relate to the transfer of rights. Therefore, companies are free to structure these arrangements as they wish.

How does spectrum trading relate to Ofcom’s overall spectrum strategy?

Spectrum trading is a key mechanism in Ofcom’s approach to management of the radio spectrum. One of Ofcom’s principal statutory duties is to secure optimum use of spectrum. Spectrum trading complements a number of other spectrum management processes which aim to ensure optimal spectrum use – including use of auctions, use of licence exemption, spectrum pricing (AIP) and liberalisation.

The Spectrum Framework Review (SFR) sets out Ofcom’s high level vision for spectrum management, including a proposed balance between the different processes and the expected implications of new technologies. The SFR consultation document setting out Ofcom’s thinking was published in November 2004. The SFR Implementation Plan, a consultation document with more detailed proposals regarding the use of a number of under/ un-used spectrum bands, has been published on 13 January 2005. www.ofcom.org.uk/consult/condocs/sfrip

Why is spectrum trading important?

It is Ofcom’s statutory duty to secure the optimal use of spectrum. Spectrum trading plays an important part in securing this duty, because it enables spectrum to migrate to users that will use it most efficiently. In combination with spectrum liberalisation, which enables spectrum to be put to the best use, it will thus benefit the economy. Spectrum trading and liberalisation should facilitate greater innovation, investment and competition in the supply of wireless services. Consumers should have access to new services more quickly, and pay less for the services they already buy.

A recent report produced for the European Commission estimates that the benefits to the European Union of spectrum trading and liberalisation could amount to as much as €9bn per year (which would equate to about £1bn per year for the UK ).

Study on conditions and options in introducing secondary trading of radio spectrum in the European Community, May 2004

Who will be able to trade spectrum licences?

There are no restrictions on who may apply to participate in a trade for any of the currently tradable licences. Ofcom, however, is unlikely to permit a trade to any person to whom it would not normally issue a licence for that licence class.

When is trading officially possible?

Spectrum trading is possible once the Spectrum Trading Regulations come into force. These regulations, and the accompanying Register Regulations, came into force in December 2004. As of this date, trading is permitted for certain licences for transmission in the UK (but not for licences for transmission in the Channel Islands and the Isle of Man ).

Have other countries introduced spectrum trading?

Spectrum trading has been introduced in some other countries around the world, most notably in New Zealand , Australia and the USA . It has also been introduced in a limited way in some European countries, for example Norway , although not to the same extent as it is introduced in the UK . Spectrum trading is likely to be introduced more widely across Europe in the coming years; a recent report commissioned by the European Commission found that two-thirds of European countries are considering implementing spectrum trading, and have already made provisions in their national legislation for this possibility.

Study on conditions and options in introducing secondary trading of radio spectrum in the European Community (May 2004)

Legislation

What is the legislative framework for trading in the UK ?

Article 168 of the Communications Act 2003 enables the introduction of spectrum trading in the UK . Wireless telegraphy (Spectrum Trading) Regulations 2004 (hereafter referred to as “the Trading Regulations”), which entered into force on 23 rd December 2004, actually implement this possibility with regulations detailing possible transfers, tradable licence classes, trading procedures etc.

Communications Act 2003
http://www.ofcom.org.uk/radiocomms/ifi/trading/legislation/

The Trading Regulations – Wireless telegraphy (Spectrum Trading) Regulations December 2004
http://www.ofcom.org.uk/radiocomms/ifi/trading/legislation/

Are there EC requirements in this area?

Spectrum trading is permitted in the EU by Article 9 of the EC Framework Directive (2002/21/EC). It requires;

that transfers are notified to the national regulatory authority;
that such transfers are carried out in accordance with procedures laid down by the national regulatory authority;
that such transfers are made public, and
that competition is not distorted as a result of any transfer.

Framework Directive 2002/21/EC
http://www.ofcom.org.uk/radiocomms/ifi/trading/legislation/

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