Third Meeting of the Broadband Fixed Wireless Access Consultative Group at Wyndham House on 10 March 2000

Those Present:

Dave Toman Chairman RA
Jacqui O’Mahoney Secretary RA
List of all those present at Annex A (42 members and 7 Officials)

Apologies were received from Ahmad Atefi (ITC), Nicky Sutton (Invention Marketing Ltd), Catherine Martin (Teligent), John Wood (P-Comm), Rory Ardagh (Formus), Scott Marin (Spectra Point Wireless), Peter Gibson (DMC) and Alexander Peschkoff (ChoiceGroup UK).

I Agenda BFWACG(00)10
		The Agenda was agreed.

II Minutes of the meeting on 14 February – BFWACG(00)9
	1.	A BFWACG member requested amendments to paragraphs 2, 5 and 7. Miss O’Mahoney agreed to make the amendments and re-circulate revised minutes to members. Action: Miss O’Mahoney

III Matters arising
		UK licensing Policy in the 25GHz band (24.5-26.5GHz) – BFWACG(00)11
	2.	Mr Sonke said when examining what spectrum should be made available for BFWA the RA had to take account of existing users and future strategy. As explained in the paper 26GHz was allocated to Fixed Services to meet growing demand. The Agency therefore chose the 28GHz band, which was also one covered by the CEPT recommendation on MWS. Some responses to the consultative document touched on the 26GHz band but most were happy with 28GHz for BFWA. A BFWACG member encouraged the use of 28GHz for BFWA but asked if the Agency would review their policy on 26GHz. Local Delivery Operators at 40GHz
	3.	Mr Toman said that the Agency proposed to write to all LDO licensees on the following: clarifying their detailed plans for using the 40GHz band; restricting the amount of spectrum available for use; Setting clear timetables for taking up WT Act licences including "use it or lose it" clauses; Setting the licence fees by administrative pricing on the basis of either a BFWA auction or the application of spectrum pricing following a beauty contest; Closing the 17GHz band as a dedicated band for cable trunking given the lack of take up
IV Progress report on Market Evaluation by KPMG
	4.	KPMG gave a presentation on the market evaluation and the outline project plan. Copies of the slides would be available on the Agency website. KPMG were still engaged in detailed market analysis. Early indications at 28GHz were for: Seven regions plus Wales, Scotland and Ireland 3 or 4 licences in each region and at least one National equal spectrum packages award of licences by auction Use or lose it obligations
	5.	A BFWACG member asked if the market evaluation had also been aimed at the residential market. KPMG said that the evaluation was based on SMEs and that the residential market may come later when the technology was cheaper. A BFWACG member asked if the Agency would be imposing a rule preventing an operator holding more then one licence in a region. Mr Toman said that this would depend on the number of licences and bandwidth available. A BFWACG member thought that there was a risk of ending up with over capacity in the market or competition being very severe. A BFWACG member asked if a licence had been earmarked for common carrier use only, opening up the market to more competition. Mr Toman said that the Agency needed to be as non-prescriptive as possible. A BFWACG member asked if any players would be excluded from bidding. Mr Toman said that this was one of the key issues being debated at the moment along with the area coverage – national or regional – that would be set out in more detail at the next meeting. A BFWACG member suggested that it was possible for a party to make a national licence by aggregating regional licences, irrespective of whether any national licences were made available.

V Outline Project Plan by KPMG
	6.	KPMG presented outline timetables for the project, showing separate timings for auction and beauty contest. A beauty contest would take longer, mainly because of the time required to prepare business plans and to assess the bids. A BFWACG member disagreed; he felt that companies had to be more careful with a business plan for an auction. Mr Sonke pointed out that it took the French six months to assess the bids in their beauty contest and that a beauty contest was open to legal challenge, which could also slow down the process.

	7.	A BFWACG member asked when the decision would be made on auction/beauty contest and whether members would be consulted on the spectrum packaging. Also, where was 40GHz on the agenda. Mr Toman said that members would be consulted on the spectrum packaging when the market analysis had been completed. A decision on how the Agency would award the 28GHz licences would be taken in April. The Agency was aiming to run the award for 40GHz licences in the autumn. A BFWACG member asked whether, if it was an auction, would it be the same as the 3G auction as the first phase was the same as a beauty contest? Mr Toman pointed out that the first phase was the pre-qualification process which was not the same as a beauty contest. Mr Green said that this was a different product to 3G, which would need to be reflected in the design of the auction. A BFWACG member pointed out that UMTS had a defined market whereas BFWA was not as straightforward.

VI Award Process – Auction or Beauty Contest – (BFWACG(00)12)
	8.	Mr Sonke introduced document BFWACG(00)12. The document set out the advantages and disadvantages of both processes. An auction was transparent, objective, quick and the asset was placed in the right hands without the risk of legal challenge. The main danger was the selection procedure for a beauty contest as setting the criteria would be very difficult and could leave the Agency open to judicial review. Furthermore, the criteria would need to include soundness and technical experience that may well work against a new entrant. Lawyers would need to be employed to assess the risk. All these issues would be put to ministers. He welcomed members written views on the arguments set out in the document within two weeks so that he could present them at the next Consultative Group meeting. He would also welcome members’ views on what is a "new entrant". Action: members
	9.	A BFWACG member thought that the Agency was too preoccupied with judicial review. He believed that a beauty contest would identify the right people rather then an auction, which favoured those with the deepest pockets. Mr Toman felt that an auction would place the spectrum in the hands of the operator who valued it most. A BFWACG member referred to the need not to endlessly debate the issues but to reach a conclusion, of whatever form, as soon as possible. Mr Sonke said that it was important that these arguments were resolved before going to ministers. A BFWACG member said that the consensus in the responses to the consultative document was 60% in favour of a beauty contest but now the consensus was being manipulated. Mr Sonke said that the support for a beauty contest would be a factor in the decision but the arguments for and against the two processes would need to be carefully weighed.

VII Any Other Business
	10.	Mr Toman said that at the next meeting of the Consultative Group members would be presented with the proposed spectrum packaging and whether to award the licences via an auction or beauty contest. 40GHz would also be on the Agenda.

VIII Date of the next meeting
	11.	The next meeting (fourth) would be held on 3 April at 14.00 at Wyndham House. The fifth meeting of the group would be held on 2 May at 14.00 at Wyndham House. [N.B. not 28 April, as suggested at the meeting].

Annex A

Organisation	Contact
Albera Networks	Iain Brodie/ Dr.Stephen Ungar
Alcatel	Phil Larke
B.T	Chris Cheeseman
Cable & Wireless	Tom King
Crown Castle	Bob Tyler
Denton Hall	Charles De Bunsen/Rosemary Jackson
Digital Microwave corp.	Peter Gibson
Eircom	Stephen Czudej
ECSPONENT	Peter Spark
Energis Comm	Simon Downs
Ericsson	John McPherson
Eurobell	Stephen Lowe
Federation Of Electronics Industry	Simon Wilson
First Mark Comm	Roy Titchmarsh
Filtronic Cable Comm Ltd	Dr.Michael Thornton
Highwayone corp	David Pearson
Kingston Comm	Mike Crowther
Lucent Technologies	Clive Twinn
Marconi Comms	Donald Browne-Marke
Media Channel	Neil Harris
MLL Telecom	Godfrey Wilson
Motorola	Tim Cull
Newbridge Networks	Ms Diament/ Tim Walsh
Newtel Solutions	David Axford
Norweb Telecom	David Mckone
OPAL Telecom	Andy Monk
Orange	Jane Cooper
Skylink Comm	David Evans
Tele2 UK	Donald Pearce
Teledesic	Dr.P.T.Thompson
The Convergence Group	Peter Williams
TTP Comm	Dr.John Haine
Unknown	Marking
Unknown	Swift
BWA	John R Norbury
KPMG	Errol Babington
RA.	Dave Toman
RA.	Joe Sonke
RA.	Jim Nixon
RA.	Margeret Aitchison
RA. RA. RA	Jacqui O`Mahoney Lawrence Green Cliff Mason

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BFWACG(00)14
5 April, 2000