Trading Airwaves: Industry Support for Government Proposals to Introduce Radio Spectrum Trading

DTI Press release - 25 May 1999

UK businesses could be buying and selling their own radio spectrum licences by the middle of the next decade, DTI Telecoms Minister Michael Wills said today.

Publishing responses to Managing Spectrum through the Market, a consultation document on radio spectrum trading, Mr Wills welcomed widespread industry support for Government proposals to speed up access to the radio spectrum by letting businesses buy and sell rights to use the airwaves.

Subject to the necessary changes being made to EU and UK law, spectrum trading could benefit both business and consumers, by increasing growth, competitiveness and offering faster access to new services.

Mr Wills said:

"Radio spectrum is an essential raw material for building the UK’s knowledge driven economy but is a finite resource subject to increasing and competing demands.

 "I am aware that, despite our best efforts businesses can sometimes find it difficult to gain speedy access to the spectrum they need for innovation and growth. This not only hampers business, it denies faster access to new services for consumers.

"The UK has an excellent record of making spectrum available for new digital services, such as mobile phones and broadcasting to keep us at the forefront of the Information Age. This track record must be maintained.

"Creating a spectrum market would help make spectrum available more quickly for new services as business could bypass spectrum shortage bottlenecks. Our aim is to create a strong and competitive market that provides access to radio spectrum for a broad diversity of radio users, complements strategic spectrum management and enhances the long term contribution of radio to competitiveness, enterprise and the knowledge driven economy.

"I therefore welcome the widespread support we have received for our consultation. The Radiocommunications Agency will now work closely with the industry to develop detailed plans, taking full account of the comments we have received, particularly those relating to spectrum access for small and medium enterprises and essential public services".

1 The Radiocommunications Agency is an executive agency of the Department of Trade and Industry. It is responsible for managing most non-military radio spectrum in the UK and takes the lead for the UK in international discussions on radio spectrum matters.

2 The radio spectrum makes a considerable and fast-growing contribution to the economy. Spectrum-based industries were estimated in 1995-96 to contribute over £13bn a year to GDP, increasing at a rate of 11% real a year; to generate £12-15bn a year of efficiency gains and consumer benefits; and to support over 400,000 jobs, increasing at a rate of over 1,000 a week.

3 The consultative document Managing Spectrum through the Market (published 8 October 1998) sought views on the creation of a market in radio spectrum. At present, spectrum licences can be transferred only through the Agency (except where the share capital of a company is acquired). This can be cumbersome and uncertain. The document sought views on the introduction of spectrum trading as a tool to help manage the spectrum more efficiently and reduce regulatory burden on businesses. The draft Regulatory Impact Assessment published with the consultative document estimated the economic benefits of spectrum trading to range from £300,000 to £billions, depending on how spectrum trading was implemented and used.

4 The document identified a number of forms of spectrum trading, ranging from simple transferability to more complex forms involving division or amalgamation of assignments and freedom to change the technology used or service provided. It proposed that these different forms should be applied selectively to different radio services depending on their technical and market characteristics. The introduction of spectrum trading would, in most cases, require changes to EU and UK law, which could take a few years to implement.

5 The document made clear that there would continue to be a need for clear and effective regulatory safeguards to ensure compliance with international obligations on the use of radio; to prevent harmful radio interference; to uphold spectrum management objectives, including spectrum efficiency; to maintain diversity of radio use by small businesses; to ensure continued access to spectrum by essential services; and to protect against market practices that prevent or distort competition.

6 The responses showed widespread support for spectrum trading. The independent Spectrum Management Advisory Group described spectrum trading as "an essential and inevitable progression". Over 90% of the submissions received were in favour of the introduction of a range of spectrum trading variants, including the more complex models, provided that this was done within an effective and clear regulatory framework. There were differences of view on the extent to which a spectrum market would need to be regulated in order to meet concerns expressed in some responses on behalf of various classes of radio users, such as small and medium businesses. The Agency will work closely with the industry to produce detailed and workable proposals to meet the concerns that were expressed.

7 The document and summary of the responses are available free of charge from:

Radiocommunications Agency,
Library and Information Service,
New King’s Beam House,
22 Upper Ground,
London SE1 9SA

(telephone 020-7211 0211)

or the Agency’s Internet site at: www.radio.gov.uk

8 The full responses (except where confidentiality was requested) are available on the Agency’s web site.

Press Enquiries: 020-7215 6409

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