Cable & Wireless - Response to the Consultation Document: 3.4 and 10 GHz: Scenarios For Spectrum Packaging and Delivery

Dear Steve

Re: 3.4 and 10GHz: Scenarios For Spectrum Packaging and Delivery

Cable & Wireless is pleased to have this opportunity to provide input to the decisions on proposed scenarios for spectrum packaging and delivery. C&W agrees that the five key objectives are useful evaluation criteria and it is these that we have used as a benchmark in our comments.

Spectrum Packaging

Before deciding how to package the spectrum, it is first necessary to decide what the spectrum will be used for, and then the most appropriate packages will possibly be identified. Clearly the five key objectives help in this matter. We agree with the RA assessment that scenario 1 would potentially sterilise rural areas and that spectrum could potentially be difficult to claw back if awarded in licences which cover large areas of geography.

It is our belief that scenario 3 offers the best opportunity to realise immediate economic value for the spectrum where there is likely to be higher demand and to reduce risk of rural sterilisation where demand is reduced. Timing is a key issue, as potential applicants may require geographic contiguity between rural and urban areas for operational, technical and economically efficient roll out. Therefore we suggest that that although developing mechanisms for awarding licences in rural areas requires further work, this should be carried out before any licences (in non-rural areas) are awarded.

Although Cable & Wireless concurs with the objective to limit sterilisation of rural areas, we do not agree with licences in rural areas attracting any level of Government funding. The debate for Universal Broadband Access is a complex issue, pre-empting this debate and its outcome would be premature and potentially damaging. To offer Government funding for this spectrum would discriminate in favour of broadband wireless technology again other fixed access mechanisms, which in our understanding is not current Government policy.

Means of Assignment

It is our belief that maximum value from the spectrum would be delivered through use of spectrum to deliver innovative services or offer services to new markets. Therefore assignment of spectrum should incentivise efficient use of spectrum and should not overly constrain those willing to take a risk.

We support the allocation in rural areas by a first come, first served process, with minimum but efficient level of audit by RA, of operators' proposed activity. Where demand for this spectrum is likely to outstrip supply, first come, first served allocation methods would not be appropriate.

Comparative selection techniques would be fairly difficult to implement in this instance. The possible uses for this spectrum coupled with consequential social and economic benefits proposed by equally well-developed submissions, could only be differentiation through arbitrary decisions. However, Cable & Wireless has concerns that allocation by auction could scare off potential users, due to uncertainty of outcome. On balance in this instance we support the implementation of an auction allocation process, provided that it does not inhibit innovation.

Means of Payment

Cable & Wireless supports annual payment for spectrum allocations. Coupled with the introduction of secondary spectrum trading, inefficient use of spectrum should be minimised. The ability to return the licence on an annual basis or trade to a third party any unused spectrum should encourage efficient use of spectrum. Royalties based payments are likely to be difficult to implement, as the spectrum is likely to form just one medium (and depending on the service, may not be the primary medium) over which services are delivered.

Licence Conditions

C&W believe that there should be no roll-out obligations attached to licences, however secondary trading and annual licence fees would encourage either the efficient use, resale or return of spectrum. It would not be in the interest of any parties to hoard spectrum with no future intent to use. Imposing Licence Conditions could potentially increase the cost of delivering services, or constrain the use of the spectrum or other resources of the company using the spectrum.

Please do not hesitate to contact me if you have any questions or require any clarification.

Yours sincerely

Karen Wray,
Manager, Regulatory Strategy