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Spectrum Management: Into the 21st Century
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Spectrum Management: Into the 21st Century
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9.1 The consultative document sought views on the definition of the core functions of the RA and the devolution of non-core functions to private sector SMOs.
9.2 The Government has concluded that, because of the strategic and economic importance of the radio spectrum and in the light of the UK's international radio obligations, the following core functions need to be carried out by a public sector body accountable to Ministers and to Parliament:
· international representation and coordination;
· national spectrum planning at the strategic level to ensure that effect is given to wider Government policies and objectives, especially in relation to competition, telecommunications and broadcasting, and to ensure that economic benefits are taken into account;
· ensuring access to spectrum for military, national security and emergency service users;
· strategic research management and policy development to expand the usable spectrum and increase opportunities for spectrum sharing;
· oversight of SMOs;
· enforcement.
9.3 Outside these core functions, there is considerable scope for private sector involvement, for example in making technical assignments. The RA has already encouraged the introduction and development of a number of private sector bodies to plan blocks of spectrum used by particular user groups. These cover pbr in the water and energy industries, spectrum used for programme making and radio microphones in theatres and concerts. Within their target markets, these bodies can provide a level of flexibility and responsiveness that the RA would find it difficult to match.
9.4 The Government is keen to encourage more of these bodies in future. The RA will continue to react positively to any further suggestions, either from self-management clubs of users or third parties wishing to provide a service to others. It will be necessary for them to demonstrate ability to deliver efficient use of spectrum under their control, technical competence, impartiality, independence and financial viability. They must also have the ability to provide quality of service and value for money benefits to users compared with present arrangements. The fees for licences distributed under these arrangements would continue to be governed by regulations made by Parliament.
9.5 Where it is not feasible to involve private sector bodies in technical assignment, the RA will be devolving further assignment work to local offices as soon as possible. The timescale will depend on factors such as the installation of the necessary information technology systems and staff training. The move to local processing of standard pbr assignments has led to considerable improvements in service and has been warmly welcomed by users. There is every reason to expect similar benefits from local processing of other licence categories.
9.6 A review by Coopers and Lybrand recommended against the involvement of the private sector in the RA's local customer services (enforcement, monitoring, interference resolution and standard pbr assignments). They concluded that the disbenefits and the loss of synergy of the work with the rest of the RA outweighed any possible financial benefits that were likely to be achieved; and that any financial benefits would be likely to be obtainable within the current structure. A subsequent efficiency study by the PA Consulting Group endorsed the productivity of the field force but recommended savings in the management and support structure. The Government has accepted the recommendations of both reviews.
9.7 This White Paper describes the Government's plans to introduce legislation to permit the selective use of spectrum auctions and administrative pricing to meet pressing spectrum management challenges that must be overcome in order to deliver continuing growth and success into the 21st century. They are important and vital developments in their own right but also open the door to further reform.
9.8 Spectrum pricing is a necessary first step towards more fundamental change. Once spectrum pricing is established and has brought supply and demand for spectrum more into balance, conditions will exist for an orderly market in spectrum. This will allow a further extension of market mechanisms and private sector participation in spectrum management. The Government sees considerable attractions in this. It is possible to foresee a situation in which rights to blocks of spectrum are auctioned to commercial SMOs with freedom to price spectrum commercially and in which assignable licences are freely tradable on a secondary market.
9.9 Regulation would still play a central role, however, and safeguards and mechanisms would be put in place to:
· ensure that the national interest in strategic spectrum management was taken into account and that national security and essential services were not compromised;
· oversee compliance with international obligations;
· prevent anti-competitive practices and monopolies on the part of large users. This would become even more important if market mechanisms played a larger role than under the spectrum pricing proposals set out in preceding chapters;
· regulate the conduct of SMOs to ensure they did not abuse their positions as monopoly suppliers of a vital resource;
· protect diversity of radio use, including scientific, cultural and social applications.
9.10 Future spectrum management could involve a range of privatisation options for technical assignments, as well as alternative structures for strategic decision-taking on spectrum matters. These could include options outside, as well as inside, central Government. Some or all of the RA's core functions could conceivably be transferred to an independent public sector body rather than retained within the DTI or an Executive Agency of the DTI.
9.11 Measures such as those set out in preceding paragraphs would require fundamental changes to spectrum management and a wholesale revision of the present legislation. The Government will monitor closely the effects of the introduction of spectrum pricing and will keep under active consideration the possibility of further steps such as those described above.
9.12 The Government will also continue to keep under review the arrangements for coordinating the strategic management of the civil radio spectrum and the possibility of combining responsibility, which is currently fragmented as described in chapter 2, in a single organisation.
9.13 The Government does not propose extending the role of spectrum pricing to the allocation level. The issues tend to be strategic in nature and are also constrained by international obligations. However, the Government believes that economic benefit analysis is a potentially valuable input to decisions on the allocation of spectrum to alternative uses competing for access to the same bands and should be given greater weight than hitherto.
9.14 There are indications that other administrations are increasingly sharing this view. The UK is in the forefront of research into the application of economic benefits analysis to spectrum management. The economic impact survey mentioned above was the first comprehensive attempt to map the economic benefits accruing from the different applications of radio. The RA intends to build on and develop that work so that economic factors can inform allocation decisions in the UK and internationally.
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