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Overview - Spectrum

1.6 Spectrum

1.6.1 Introduction: an important component of the communications market

The availability and efficient use of spectrum is important in a well-functioning communications market. Figure 1.35 below shows that the defence sector still commands the greatest single proportion of available spectrum (despite the release of parts of its allocation to the commercial sector over the past ten years). The next largest user of spectrum is the fixed/satellite sector – this includes point-to-point microwave communications links which form part of the telecoms network, and satellite uplink/downlink. Interestingly, cellular spectrum (i.e. the spectrum used for mobile communications) comprises only 5% of the total.

Figure 1.35: UK spectrum use weighted by frequency (weighted)

Source: Ofcom

Note: This has been weighted such that a 1MHz allocation at 100MHz is given equal weighting to a 10MHz allocation at 1GHz.

1.6.2 New uses of spectrum

Over the past two decades, a number of new technologies which make more efficient use of spectrum have emerged. These technologies have evolved from research laboratories through to full commercial availability, and many now play an important part in consumers’ everyday lives. They include:

Digital Audio Broadcasting (DAB), a technology developed by a group of manufacturers and broadcasters to provide radio services in a digital format. In 1995, the BBC carried out the first DAB broadcast in the UK and services now operate in VHF Band III (217.5-230 MHz).

DAB uses spectrum more efficiently and is based on a standard which utilises techniques to make the radio signal robust against sources of interference and weather conditions – unlike FM transmissions, where these adverse effects are translated into a hissing or crackling sound.

Wireless Fidelity (WiFi), a wireless technology, operating in the licence-exempt bands at 2.4 GHz and 5 GHz, that allows users to connect to an access point to from a wireless local area network (WLAN). Users can also access the internet if the access point has appropriate connectivity. WiFi access points (also known as hotspots) typically have a range of about 100 metres. As WiFi operates in licence-exempt bands, it is subject to power restrictions to minimise the effects of interference.

WiFi is based on variants of the IEEE 802.11 standards and latest versions support a data rate of around 100Mbit/s using MIMO (multiple input multiple output) technology. BT Openzone was one of the earliest service providers to offer WiFi hotspots in the UK in 2003, and as of mid 2006 there were approximately 14,600 public hotspots in the UK, in locations such as airports, hotels, railway stations and town centres.

Bluetooth, a short-range wireless communication technology aimed at replacing the use of cables for connecting mobile and/or fixed devices such as mobile phones, headsets, MP3 players, printers and PDAs.

Like WiFi, Bluetooth operates in the 2.4GHz licence-exempt band. However, to minimise interference with other wireless technologies operating in the same band, Bluetooth uses an adaptive frequency-hopping technique to detect and avoid the frequencies used by neighbouring devices. Bluetooth is a low-power technology: most Bluetooth-enabled devices have a range of about 10 metres and support data rates of 1-3Mbits/s.

3G, or the Universal Mobile Telecommunications System (UMTS), the third generation mobile communication system and the successor to the 2G Global System for Mobile communication (GSM) standard. Both UMTS and GSM have been widely adopted in Europe and beyond, which has led to economies of scale and made roaming easier for users who travel internationally.

3G services are licensed in the UK in the frequency bands 1900-1980 MHz and 2110-2170 MHz. The former band is used to transmit signals from the mobile to the base station (uplink) and the latter to send signals from the base station to the mobile (downlink). In March 2000, the Radiocommunications Agency (RA) held an auction for five 3G licences in the UK, raising just under £22.5 billion, while similar auctions were subsequently held in other European countries. Three years later, 3UK started the first commercial 3G network in the UK.

3G services support higher data rates than GSM (up to about 384 kbit/s), which has enabled use of new services such as mobile video telephony and mobile music track downloading. As UMTS establishes itself further, operators are already looking to boost its speed using HSDPA (High Speed Downlink Packet Access) and HSUPA (High Speed Uplink Packet Access) technologies.

1.6.3 Spectrum auctions

The first spectrum auction since Ofcom was established took place on 20 April 2006. This was in line with the recommendations made by the Spectrum Framework Review to allow market forces to have a greater say in determining how spectrum is used. Following publication of a consultation document and a statement in July and November 2005 respectively, Ofcom made available for auction twelve licences at the frequencies 1781.7-1785 MHz paired with 1876.7-1880 MHz. The licences are technology neutral but are on a low-power basis. Possible uses include private GSM mobile phone networks in office buildings or campuses. Fourteen companies participated in the single-round sealed bid auction, and the total licence fees paid were £3.8 million.

Further UK-wide auctions are in the pipeline for a number of bands including:

412-414 MHz paired with 422-424 MHz
872-876 MHz paired with 917-921 MHz
1452-1492 MHz
10, 28 and 32 GHz

A further spectrum auction in conjunction with the Republic of Ireland’s telecoms regulator, ComReg (Commission for Communication Regulation), is planned for the 1785-1805 MHz band, with one licence being made available in Northern Ireland and one in the Republic of Ireland.

1.6.4 Spectrum trading

Towards the end of 2004, Ofcom authorised spectrum trading – allowing the holders of certain categories of wireless telegraphy licences to transfer all or part of their rights and obligations under a licence to another party.

The first spectrum trading in the UK occurred in 2005-2006. Fourteen applications for licence trading were received by Ofcom during the year. Eight of these trades had been completed by May 2006, and consent had been granted by Ofcom for the remaining six. This represented a little under 2% of the licences for which spectrum trading was available during the year.

In April 2006, Ofcom published a consultation document on spectrum usage rights (SURs) proposing a new way of specifying the emissions that a licence holder might transmit in neighbouring bands and locations.

1.6.5 Digital Dividend Review

In September 2005, the UK Government announced that analogue television would be gradually phased out between 2008 and 2012, and replaced by its digital counterpart which is about six times more efficient. The switchover to digital services will result in the release of up to 112 MHz non-contiguous spectrum in the UHF band. This freed-up spectrum – known as the ‘digital dividend’ – could enable the launch of a wide range of services encompassing advanced business and broadcasting services, wireless broadband services and additional television channels using standard or high definition.

In November 2005, Ofcom announced the launch of its Digital Dividend Review, which will examine issues such as possible uses for the digital dividend, technical limits on spectrum use to prevent interference, and mechanisms for making this spectrum available to the public. Ofcom aims to publish a consultation document before the end of 2006, before taking its final decision by mid-2007.

1.6.6 Ultra Wideband (UWB)

At the beginning of 2005, Ofcom consulted on the position it should adopt in Europe on ultra-wideband devices in the 3.1-10.6 GHz band. Following feedback from manufacturers, operators, other national stakeholders and results from research projects, we outlined the UK position with respect to UWB. This was then used as an input to broader discussions on UWB at European level.

1.6.7 Cave audit

In 2002, Professor Martin Cave published a study, “The Review of Radio Spectrum Management”, dealing with the application of market forces to commercial spectrum management. More recently, in December 2005, an audit of public spectrum holdings was carried out by Professor Cave and a team of experts based at Ofcom.

The audit was intended to encourage the public sector to make more efficient use of its spectrum holdings, by identifying spectrum where immediate or medium-term reallocation is feasible. It also investigated the possibility of extending market mechanisms to the public sector, and the provision of incentives for more effective spectrum management.

In an atmosphere of ever-increasing demand for limited spectrum, the Cave audit recognised that public spectrum holdings represent the majority of spectrum which will have to be made available for additional commercial use in the future. In this respect, the audit recommended that ‘Recognised Spectrum Access’ should be used to define the spectrum rights of Crown bodies. Furthermore, it recommended an increase in bandsharing through appropriate incentives to bodies managing the bands, and the investigation of new technologies to allow bandsharing in bands that were previously excluded for such purposes. In case public bodies lack the commercial expertise to engage with commercial organisations, the report suggested the appointment of a third party to liaise between the public and commercial sectors.