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Managing Spectrum through the Market |
8 October 1998
New proposals to manage the radio spectrum more effectively and advance the knowledge-driven economy are published today by the Radiocommunications Agency in a consultative document, ‘Managing Spectrum through the Market’.
The consultative document proposes that licences should be made tradeable subject to necessary regulatory safeguards. For example, spectrum trading could provide an added incentive for greater spectrum efficiency by allowing businesses who use spectrum more efficiently to trade any surplus. Potential advantages include:
an economically more efficient distribution of radio spectrum;
The timing of its introduction would depend on changes to UK, and, in some cases, European legislation.
Welcoming the consultation, Telecoms Minister Barbara Roche said:
"Radio spectrum is the raw material for one of the most dynamic and successful sectors of the economy. The management of that resource delivers major economic benefits and is key to realising the Government’s vision of the knowledge-driven economy. The proposal to introduce spectrum trading demonstrates our commitment to working through markets to deliver growth, enterprise, consumer benefits and jobs.
"We have already acted to reform spectrum pricing to base licence fees on spectrum management objectives rather than the cost of issuing licences. We now wish to explore the further opportunities offered by spectrum trading to increase the benefits gained from radio and boost the knowledge-driven economy.
"The proposals in the consultative document aim to provide a measured, practical extension of market forces within a continuing framework of effective spectrum management and market regulation. They deserve serious consideration from all who are interested in the use and future development of the radio spectrum. I hope that as many as possible will take the opportunity to respond, either directly or through trade associations."
Notes to editors
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 is used by a range of businesses throughout the economy and for non-business purposes. 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 Wireless Telegraphy Act 1998, the first major spectrum management reform for 50 years, allowed licence fees to be set by regulation or by auction with the objective of promoting the optimal use of the radio spectrum. Previously, fees were tied to administrative costs, which was unfair to smaller radio users and contributed to inefficient use of the finite spectrum resource. Ministers made clear during the passage of the legislation that spectrum trading could offer advantages and the Green Paper on regulating communications stated the intention to consult.
4 Under present legislation, licences to use radio spectrum cannot be transferred except through the Agency. By allowing licences to be traded, spectrum trading would complement and reinforce pricing as a tool to promote more efficient use of the finite spectrum resource and reduce burdens on business. The draft Regulatory Impact Assessment published with the consultative document estimates the economic benefits of spectrum trading to range from hundreds of thousands of pounds to billions, depending on how spectrum trading is implemented and used.
5 The document makes clear there could continue to be a need for 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 and ensure continued access to spectrum by essential services; and to protect against market practices that prevent or distort competition.
6 The document identifies a number of forms of spectrum trading and proposes that they should be applied selectively to different radio services depending on their technical and market characteristics.
7 The document is available free of charge from:
Radiocommunications Agency,
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 Responses are requested to be sent in written or electronic form to the address given in the document by 5 February 1999.
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