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Annual Report & Accounts 1998 - 1999 |
The Agency is responsible for managing most non-military radio spectrum in the UK and representing the UK in international discussions on radio spectrum. It aims to develop its role at the centre of one of the most dynamic sectors of the economy.
The Agency's fundamental aim is to excel as a world-class spectrum manager in support of the Government's aim of making the UK the best environment for electronic trading in the world by 2002. Key elements of its strategy for achieving this include:
supporting Government policies on competitiveness and the knowledge driven economy through effective management of the radio spectrum, including licensing spectrum for Third Generation mobile telecommunications at 2 GHz and Interactive Multimedia Services at 40GHz;
1 To support Departmental objectives by managing spectrum in accordance with a clear strategic plan, which:
and by carrying forward innovative and progressive approaches to spectrum management.
2 To improve the Agency's business processes and operations in order to:
3 Successfully to implement, and make the most of the opportunities provided by, the public-private partnership Radio Spectrum International (RSI) to acquire fully integrated modern information systems that meet the Agency's business requirements and enable it better to:
4 To seek improvement in global and regional spectrum management co-ordination to the benefit of the UK; and, through RSI to exploit commercially the Agency's reputation and expertise through the provision of international consultancy services.
5 To promote a programme of contracted research to underpin developments in the utilisation of the radio spectrum.
6 To ensure compliance with spectrum management requirements imposed for the benefit of all radio users in order to keep the spectrum clear of undue interference, through:
7 To ensure the efficiency, effectiveness and integrity of the Agency's business processes, through:
8 To be a caring and considerate Investor in People and to develop the skills of the Agency's staff and unleash their creativity and talents to:
Strategic Spectrum PlanningStrategic planning is at the heart of successful spectrum management. In the spirit of Open Government, the Agency regularly publishes its Spectrum Strategy for customers' information and to obtain feedback. The fourth edition was published in June 1998. As usual, this presented a broad overview of the whole range of spectrum uses, both civil and military, and identified important future developments both in the UK and internationally. It also gave summaries of market forecasts of future demand for public mobile communications, private business radio and fixed links. Strategic planning is assisted by the Spectrum Management Advisory Group (SMAG), which was established to provide independent advice to Ministers and the Agency. Members are selected on the basis of professional expertise and ability to think strategically about issues concerning the UK's radio spectrum. Their primary aim is to use their collective expertise to further debate, highlight potential areas of concern and take a forward look. The SMAG first met in May 1998 and held five meetings during the year. Topics discussed included Third Generation mobile telecommunications, broadband wireless, spectrum trading, convergence and spectrum pricing. |
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Spectrum Management |
The Agency has continued the process of updating its business processes and refining its range of licence and licence-exempt products. It has also started using the new spectrum management tools provided by the Wireless Telegraphy Act 1998 to help meet increasing demand for spectrum, encourage spectrum efficiency and promote innovation and competition.
Administrative Spectrum Pricing
The first stage of implementation commenced in July 1998 and tackled the worst distortions of the previous pricing regime. A new licence class was introduced for on-site private business radio with significant fee reductions for thousands of small businesses. At the same time, a first step was taken to increase fees for cellular mobile telephony. This started to bring licence fees for large and small business users of mobile radio more into balance on a pro rata basis.
Major preparatory work for the second stage of spectrum pricing implementation continued throughout the year. A consultative document was issued in September which contained proposals for continuing the rebalancing mentioned above and the extension of spectrum pricing principles to other mobile radio and point-to-point fixed links, the areas where spectrum pressures are greatest. The proposals increase licence fees for those requiring exclusive and congested assignments while encouraging those willing to use uncongested spectrum or invest in more spectrum-efficient technology. Thousands of smaller business users would benefit from fee reductions. The proposals received general support and are being developed into regulations planned to take effect in July 1999.
The final stage of administrative pricing is planned to commence in July 2000.
Spectrum Auction for 'Third Generation' Mobile Telecommunications
The Agency, in consultation with industry, continued to develop plans for an auction of Third Generation mobile tele-communications operators licences. First Generation mobile telephone networks provided simple analogue voice telephony. Second Generation added data services like fax and e-mail to basic voice service, with higher rate data capabilities expected over the next few years. Third Generation should be capable of providing much higher data rates, in addition to conventional voice, fax and data services. This offers the prospect of high-resolution video and multimedia services on the move, such as mobile office services, virtual banking and on-line billing, home shopping, video conferencing, on-line entertainment and Internet access.
Experience overseas has shown that the traditional licensing method of comparative selection or 'beauty contests' tends to favour incumbent operators. By contrast, auctions are a fast, transparent, fair and economically efficient way of allocating the scarce resource of radio spectrum. In May 1998, Barbara Roche MP, then Telecommunications Minister, announced to Parliament the objectives for the auction: to utilise the spectrum in the most efficient way; to promote effective and sustainable competition; and, subject to those objectives, to realise the full economic value of the spectrum to consumers, industry and the taxpayer.
In February 1999, Telecommunications Minister Michael Wills MP announced two measures to encourage a new entrant to the mobile telecommunications market. These were, first, that the Government would mandate roaming to enable customers of a new operator access to existing networks nationwide, while the new entrant rolled out its own network. Second, that five licences would be auctioned, one more than the existing number of operators, with the largest licence reserved for a new entrant. Mr Wills also announced that the likely timing for the auction would be the second half of the 1999/2000 financial year.
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Spectrum Trading Subject to necessary changes being made to EU and UK law, the introduction of spectrum trading would provide an additional mechanism for users to gain speedier access to spectrum for new services. Responses to a consultative document, Managing Spectrum through the Market, issued in October indicated broad support for spectrum trading in principle. The Agency will be developing detailed proposals with industry.
Left:Telecoms Minister,Michael Willis MP. |
In order to manage the spectrum effectively, the Agency requires up-to-date information systems and IT tools. To provide these, the Agency launched in June 1998 a ground-breaking public-private partnership in the form of Radio Spectrum International Consulting Limited (RSI).
RSI is jointly owned by Government (30%) and CMG plc (70%) - a leading European IT services company. RSI provides strategic IT services and systems development to the Agency and, through its international business division, is able to offer consultancy services and systems to spectrum managers internationally.
The formation of RSI has had a major beneficial impact on the provision of IT support for Agency business. RSI has provided the Agency, via its Intelligent Customer interface, with access to the substantial resources and expertise of a major IT services provider. Although the process of transferring the provision of IT services from an in-house team to RSI continues and various practical problems and issues have arisen, the underlying will by all concerned to resolve them and deliver high quality IT services to users is manifest. This spirit of partnership has been further evidenced by tangible achievements such as progress with the critically important RULES Unified Licensing system and the ongoing implementation of the EROS (Standard Office System) Project.
On the international side, RSI won its first international business in Russia and has several bids pending in other markets. Interest in RSI's activities has been received from around the world and the next year looks particularly promising as RSI bids for further international business. The company's main strength is its ability to offer a unique mix of spectrum management experience (from the Agency), design and development of spectrum management systems (through CMG plc) as well as specialist input from two leading spectrum management consultancies, The Smith Group and NERA (National Economic Research Associates).
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