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BT
Cellnet
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Cliff Mason Esq
Radiocommunications Agency
Wyndham House
189 Marsh Wall
London E14 9SX
7 January 2000
Dear Mr. Mason
Spectrum Pricing: implementing the Third Stage and Beyond
I apologise for the delay in sending you our comments on this consultation exercise.
The basic spectrum fees, with and without modifiers, are given in Appendix 6, table Tl.
We note that spectrum modifiers are to be applied throughout the period covered by the consultation. We anticipate that some of the modifiers should apply serially, for example, in the BT Cellnet 1800 MHz band it is reasonable to propose that the Fragmentation, Geographic Restriction and Propagation modifiers apply giving an overall modifier of 0.42.
There remains a fundamental disparity between the 1800 and 900 MHz band fees - particularly between the BT Cellnet/Vodafone 1800 MHz and the One2One/Orange 1800 MHz. Furthermore, we do not believe that the current basis of pricing recognises the substantial advantage that accrues to One2One and Orange by virtue of each having a larger assignment of spectrum, which is contiguous in each case, than BT Cellnet (and Vodafone). This advantage will increase significantly once ETACS spectrum has been handed back to the RA, when BT Cellnet and Vodafone will have to manage three build levels: primary GSM, extension GSM and GSM1800.
The basis of building the fee total can be subject to various interpretations. We propose that the total spectrum fees should be based on the number of usable channels, that is excluding guard bands. Fees to be reduced in proportion when spectrum is returned to the RA (including fees in the year of hand-back), for example as ETACS spectrum is returned to the RA.
We support the RA proposals to examine the charging basis of broadcast spectrum. Certainly broadcast and cellular have much in common in that there is a high demand for services in both bands. We urge the RA to develop a pricing regime that is fair and equitable for all users.
We support RA proposals to extend spectrum pricing to cover public services. We support also plans that will treat all spectrum users in the same way.
Now that the principle of hypothecation has been established, we would encourage the RA to work with the Treasury to ensure that at least a reasonable proportion of the monies raised from spectrum fees is used for the benefit the radio community as a whole, e.g.: to enhance spectrum efficiency, demonstrate the safety of radio transmissions and reduce interference.
On a point of detail the last line of the "Actual Tariffs" table in Appendix 6, table Tl looks a little odd. Are both the last two lines intended to refer to the Channel Isles/loM? Also we are somewhat surprised to see UMTS included. Would you confirm (a) whether this is intentional, and (b) why the rate has been set at this level now rather than waiting to set a fee level on the basis of the values that will be identified in the forthcoming auction process?
I trust you find these comments helpful.
Yours sincerely
Sent via e-mail
Graham Kersting
General Manager, Regulation
Tel: 01753 565409
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