Deregulation in wireless communications services
17 September 2004
Ofcom today announced proposals that will allow users and providers of wireless communications services greater flexibility in changing the way they use their licences governing access to the airwaves.
Providers of a broad range of services - from taxi two-way radios to mobile phones, TV and radio and radar - are required to hold Wireless Telegraphy Act licences. Those licences set out specific limitations on the kind of services offered on specified bands of radio frequencies within the electromagnetic spectrum. Wireless Telegraphy Act licences are divided into the following sectors:
- Aeronautical and Maritime
- Amateur and Citizens Band
- Broadband Fixed Wireless Access
- Fixed Wireless Services
- Business Radio
- Programme Making and Special Events
- Public Wireless Networks
- Space Science
- Non-Operational Licencing
Regulators have traditionally adopted a 'command and control' approach in dictating Wireless Telegraphy Act licence terms, imposing a variety of restrictions depending on the service. Ofcom proposes instead to introduce greater flexibility by reducing restrictions on type of use.
Under the proposals, which are subject to public consultation, three key licence types - Business Radio, Fixed Wireless Access and Fixed Wireless Services - will be addressed as a priority. Holders of these licence types could benefit from these changes before the end of 2004.
Section 3 of the Communications Act 2003 requires Ofcom to secure the optimal use of the electro-magnetic spectrum and to secure a wide range of electronic communications services throughout the United Kingdom.
Ofcom's latest proposals are part of its wider policy to reduce the role of the regulator and give more responsibility to the market for deciding how spectrum should be used. Ofcom believes that these proposals will benefit consumers and businesses by encouraging greater innovation and enabling greater competition between providers, thereby helping to drive down prices and increase the scope for new services to come to market.
Ofcom also recognises that increased flexibility could lead to an increase in interference between different users' transmissions. The proposals outline various measures that will enable the regulator to maintain control over interference to avoid disruption to services.
The closing date for responses to the consultation is 12th November 2004.
The electromagnetic spectrum - a range of radio frequencies over which numerous kinds of wireless services are received and transmitted - is a finite resource which plays an integral role in the day-to-day lives of many individuals and organisations. There is increasing demand for access to it from private and commercial organisations, as well as the armed forces and emergency services who share it with them.
This consultation follows a statement made by Ofcom in August laying out a timetable for the launch of spectrum trading in the UK. This will allow companies and individuals holding spectrum licences to buy and sell their rights in an open market.
Both initiatives build on the findings of the 2002 independent review of radio spectrum led by Professor Martin Cave and commissioned by the Department of Trade and Industry and HM Treasury. Those findings were subsequently reflected in the Communications Act 2003.
Spectrum trading and liberalisation will make it easier for businesses to develop higher-value applications to run over their spectrum allocation or to sell their licence in an open market to a company that is better placed to use it. Ofcom plans to publish proposals on bands used for mobile services before the end of 2004.
Spectrum liberalisation is not without risk, as radio signals can interfere with each other, resulting in a poor experience for the user and loss of revenue for the operator. To offset this risk, Ofcom intends to begin by looking at licence change applications on a case-by-case basis to determine the potential for interference.