Appendix 4 - Aeronautical and Maritime Sectors

Your views on the proposals set out in this document are sought by 31 December 1999. Comments should be sent to the address below. It would be helpful if lengthy written documents could be sent via email of on disk in Word 7:

Contact Details:

Paul Fonseka
Radiocommunications Agency,
Wyndham House,
189 Marsh Wall,
London,
E14 9SX.

Email: paul.fonseka@ra.gsi.gov.uk

Fax: 020 7211 0228

APPENDIX 4: Aeronautical and Maritime Sectors

The Agency issues Aircraft radio licences allowing access to the civil aeronautical spectrum by aircraft, and aeronautical licences which have a channel assigned and are approved by the Civil Aviation Authority. Many mobile aeronautical frequencies are determined and protected by international agreement and therefore there is limited scope for administrative pricing.

The Agency currently collects a licence fee from all aeronautical and aircraft radio users to cover its costs in administering the licence document, protecting the aeronautical spectrum from interference and abuse and representing UK aeronautical interests internationally. There have been two prosecutions arising from aeronautical abuse over the last twelve months.

These licences are issued directly by the Agency and require no frequency approval or assignment. The licence authorises the use of radio equipment and frequencies that are appropriate to UK registered aircraft.

HF and VHF frequencies allocated to aeronautical mobile used for air to ground communication and vice versa are heavily used and thus are subject to congestion. This is not helped by the world-wide use of these frequencies and increasing demand to use them.

The fee for an aircraft radio licence is currently determined by the take off weight of the aircraft. There are three tiers and the fee ranges from £30 for light aircraft to £550 for the heaviest. This charging structure was introduced about 10 years ago and was intended to differentiate between general and commercial aviation. It was then assumed that larger commercial aircraft using more spectrum would normally fall into the highest fee tier, and it would thus be equitable to have these charging tiers.

However, on grounds of administrative cost of issuing licences, it costs the same to issue every licence. More importantly, the fact is that all aircraft have to use the same spectrum overall, which is commonly assigned worldwide. Consequently the Agency agrees with the recommendations of the Smith NERA study that incentive spectrum pricing would not benefit the management of this spectrum, and the purpose of the fee would therefore be to cover the basic costs of licence and spectrum administration. It therefore appears inappropriate to now continue to have such a difference between the three aircraft radio licence fees. A possible solution to this would be to unify the licence fee at the lower level of £30 or introduce a new two tier system, differentiating between general and commercial aviation or aircraft fitted with VHF and/or HF/radar band equipment (to reflect different spectrum use).

[There is also the possibility that the Agency could issue a licence for a longer term than one year. However this is only seen as a possibility if licences become transferable, which current legislation does not permit.]

The Agency is currently working with the Civil Aviation Authority to look at ways to streamline the radio licensing process. There is a possibility that the CAA may be delegated the administration of aircraft licensing and should this happen, they would collect licence fees on the Secretary of State’s behalf. Any change in licence fee would have to be in consultation with the CAA, as the fee would have to take some account of both the CAA’s and the Agency’s costs. However this does not necessarily signify that there would be any significant change in fees overall, and indeed some savings may be possible.

Aeronautical

These licences are issued by the Agency, following the approval and assignment of a suitable frequency from within the aeronautical allocation by the Civil Aviation Authority. Licences are issued for ground stations, Sports and Recreation stations such as balloons, gliders and hang gliders, and for navigational aids.

With the exception of AGS (General) licences, which are used for air traffic control, channels are allocated on a shared basis. However, in the majority of cases, there is sufficient spectrum to meet demand and shared users are geographically separated.

There are currently a number of different fees for aeronautical licences, ranging from £20 for a navigation aid licence up to £275 for an Aeronautical Ground Station (special) licence, which allows a business frequency. At present the Civil Aviation Authority does not receive any revenue from its assignment or allocation work.

The Agency is currently working with the CAA to look at ways both organisations can work together to streamline the licensing process. There is a proposal that the CAA be delegated the licensing function and collect licence fees on the Secretary of State’s behalf. Should this happen the CAA's costs would need to be considered before any new fees were set.

It is the Agency's intention to reconsider its licence fees for aeronautical licences, however it is unlikely that the cost of a navigation licence or sports and recreation station licence would be lowered as both fees currently do no more than cover the Agency's costs. However some adjustment may be possible on Aeronautical ground station licences. There are relatively few new applications for these licences, with most customers applying for a licence with the intention of using the service for a number of years. The Agency only issues a licence when the original application is made and does not send out a new one at renewal each year. As part of the licence fee covers the cost of administering the licence (including assignment work), it could be argued that licensees renewing an AGS licence should pay a reduced fee, with the full licence fee only being applicable to new applications.

The Agency issues maritime licences to cover the use of maritime mobile, public correspondence and radio-navigation frequencies. Much of the spectrum is subject to international agreement and as such, there is limited scope to apply administrative pricing. The licences are issued under three categories - Ships and Transportable, Coastal Station Radio and Navigation Aids.

The Agency collects a fee from all maritime radio users to cover its costs in administering the licence document, protecting the maritime spectrum from interference and abuse and representing UK interests internationally. There have been two prosecutions arising from unlicensed use over the last twelve months.

Ship Radio and Transportable Radio licences

Ship Radio licences allow the licensee to install any approved maritime radio equipment on a ship station and access the maritime spectrum. Transportable licences allow the use of a VHF portable maritime radio on multiple vessels.

Maritime mobile frequencies can be heavily used in peak boating seasons and thus are subject to congestion. The frequencies are used world-wide and there is high demand for their use.

Up until April 1998 there were two licence fees differing between pleasure and commercial use. The annual fee has now been unified at the lower level of £22.

The number of ship radio licences on issue has increased to around 62,000 over the last two years. It is therefore suggested that the licence fee is simplified to £20.

An alternative would be to extend the term of the licence, for example to three years, however there are two problems with this. Firstly, licences are currently not transferable and secondly, it is crucial that information on vessels and their owners is given to the ITU and the UK Coastguard. By insisting on a yearly renewal the Agency is able to stay in contact with its customers and ensure that any changes in details are noted.

CSR licences authorise coastal stations to use internationally agreed maritime frequencies and UK maritime business channels. There are three types of licence each with its own fee.

The first is CSR (International) for port operations and ship movement. This licence carries a fee of £100 per station per allocated frequency and channels are allocated from the 156MHz to 163MHz band.

CSR (UK) licences allow businesses to communicate with ship stations. The licence is charged at £180 per station per channel and there are 40 channels available for allocation in the 156MHz to 163MHz band.

Finally, CSR (Marina) allows sailing clubs and marinas to use the radio for berthing and race control. The licence allows access to three maritime channels, which have been set aside for this purpose. The annual licence fee is £75.

CSR (International) channels are subject to high use and demand, particularly in areas such as the Thames Estuary and the Solent. Many licensees are subject to channel sharing because of demand and can receive interference. Smith NERA were asked to consider whether there is a case for using incentive spectrum pricing to help manage this demand. Whilst they consider there may be a case, the fact that channels are subject to international agreement, that the potential levels of co-channel interference are high and because in most areas the fees are already comparable with the equivalent land radio fees, the Agency consequently does not intend to make any significant change to the fee levels.

The three CSR (Marina) channels are subject to heavy traffic, are relatively unprotected and in high demand. The current licence fee is high in comparison with other licences where the Agency does not carry out any frequency assignment work and the Agency therefore proposes to make a reduction. A possible solution here would be to reduce the fee to £50 (which would appear to be sufficient to cover basic administrative costs) or to introduce a longer-term licence to reduce administrative costs (eg for 3 years at, say £100) .

The Smith NERA study recommended that CSR (UK) licensing could potentially be a candidate for incentive spectrum pricing. They suggest that consideration be given to encouraging new or narrowband technology and pricing could be used to encourage its adoption. Views would be welcome on this issue, before the Agency reflects further.

Navigation Aids

Again due to the constraints of international allocation of navigation aid frequencies, this licence class is not a suitable candidate for incentive spectrum pricing.

There is a great deal of variance in the licence fee, ranging from £40 for a radar licence up to £250 for a VHF/DGPS licence and £1000 for a MF/HF DGPS licence. The Agency proposes to simplify the pricing to a more equitable level.

The majority of licensees apply for a licence with the intention of operating the service for at least several years and there are only a small number of new applications. It may therefore be possible to introduce a longer-term licence.

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Appendix 5