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Response to "Proposals For
The Licensing Of Radio Spectrum At 28 GHz" - BT
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BT welcomes this second opportunity
to comment on the Licensing of the 28GHz Radio Frequency band for Broadband
Fixed Wireless Access. Our general views have been previosuly set out in the
response made to the first consultation which can be found on the RA's web site.
This response contains additional material specifically addressing this latest
Consultation Document and should be seen in that context and read in conjunction
with the initial response. We have also participated in the discussions held
within the RA Ad Hoc consultative committee.
Background: Competition
BT commends the Government and RA
on the speed with which they have sought to allocate this spectrum. Particularly
since, as noted in the RA document, the demand for fixed broadband access appears
to be increasing rapidly. We also note and agree with the comment that this
market may be satisfied by a range of competing technologies, although of course
it remains unclear for now, how widely some of these technologies will be deployed.
This position would seem to indicate that some operators may be interested in
offering broadband services in general and have an interest in regional licences
to infill gaps where other technologies they may be utilising already do not
reach, while other potential operators may be interested specifically in operating
BFWA technology itself, and seek to do so on a wider geographical basis. We
believe it is doubtful that an incumbent operator of either cable or telephony
could find significant benefit from this radio spectrum in an area they already
serve through other technologies. Nevertheless, BT is pleased to note that the
RA proposals are able toaccommodate any of these possible approaches. However,
given this position BT would question whether it
is essential to see competing BFWA services (as opposed to competing
broadband service offerings generally) in a given area, since BFWA would be
only one of a number of already competing technologies and operators. In general
the customer will not be concerned whether he is receiving broadband services
from BFWA or another technology.
Scope of Services
BT also concurs with the view that
this is an unproven market with unproven technology. This, coupled with the
emergence of other competing technologies, leads us to the view that it will
be doubly difficult for potential operators to estimate the value of spectrum
for this purpose with any degree of accuracy, and especially within the proposed
timescales. We therefore note and support the fact that there is no proposal
to limit the technology selected or to restrict network architecture, e.g. to
point to multipoint.
Detailed Comments
- Exact frequencies to be allocated:
As noted, we support the decision to use an auction as the method of allocation
and understand the reasons for wishing to expedite this allocation as swiftly
as possible. However, we note that there has been a slight variation and increase
in the spectrum planned to be auctioned over that previously considered. It
would be helpful if the exact frequency limits of the spectrum to be auctioned
could be confirmed in the very near future, this will then allow any conflict
with BT's presently licensed use of frequencies within the 28GHz band for
fixed analogue video links to be identified and properly addressed. As discussed
in previous consultations, it is important to the success of this method of
spectrum allocation that spectrum to be auctioned is as clean as possible
and presents the potential buyer with a clearly known quantity.
- Number and location of licence
regions: We recognise the advantages and dissadvantages of the various
options discussed within the consultation group, and the fact that any number
of solutions could be selected. However, we would agree that the most recent
KPMG proposal of 12 English regions plus Scotland, Ireland and Wales seems
a reasonable way forward. To cover the event that bidding on some licences
does not reach the reserve price, we would propose that it should be made
clear at the outset that these licenses would be re-auctioned later, when
market conditions are right, rather than simply being allocated to operators
for a nominal fee. To do otherwise would be to lose many of the benefits of
holding an auction, and furthermore would ultimately be discriminatory.
- Open and equal opportunity:
In this regard we also support the proposal to extend the opportunity to bid
to all interested parties, and believe firmly that given the relatively
unknown quantity of all aspects of this allocation, including market size
and technology, together with levels of interest from, and types of, operators;
there is no sound rationale for differentially sized licences. It is also
unclear to us precisely how "new entrant" would be defined in the context
of regional licences: Would an operator with no operations in that region
be considered new, or would the criteria be wider, say the UK? On balance
there seems little to commend this approach, given that one of main drivers
for this auction is speed to market, which will be served best by simplicity,
as the Consultation Document implies. Provided competition is facilitated,
and three licences per region would seem to do this amply given the existence
of other technologies too, it should be born in mind that this is a new market
which is already promising to be fiercely competed for so that the whole concept
of "incumbent operator" is somewhat questionable in itself.
- Use it or lose it: BT would
agree wholeheartedly with the proposal to include a "use it or lose it" provision
in the licences. We would suggest that the Radiocommunications Agency should
expect to be pro-active in taking back with a view to re-allocation, any licence
which was not being utilised. Not only would this prevent spectrum hoarding
for either speculative or strategic regions, it would also ensure that this
valuable slice of spectrum will not inadvertently be lost to efficient use
in the event that the market in any given region or more generally turns out
other than predicted. It may be observed that other European countries have
used a time period of 1 year in this regard, however, "effective" utilisation
might be hard to determine at the limits, and flexibility may need to be exercised
in this matter in the expectation that it will be more obvious when the occasion
arises, as to whether or not efforts are still being genuinely made by the
licensee to use the spectrum effectively.
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