Bespoke licence fees for aeronautical VHF communications frequencies – a further consultation

We have decided to implement bespoke fees broadly as we proposed in March this year.

1.1 In this statement we are setting out our decision that fees for some aeronautical ground station licences should be derived on a bespoke basis which takes into account the service coverage and wider separation zone of each particular assignment. A proposal to make this change was set out in a consultation document which we published in March this year.

1.2 This approach is in contrast to the alternative generic methodology which underpinned the fees set out in a statement which we published on 14 December 2010. Under the generic approach the same fee, reflecting typical coverage of a particular licence type, is applied uniformly to all licences. Under bespoke pricing, licensees with a relatively small Designated Operational Coverage (DOC) and associated separation zone will pay less than licensees with relatively large DOCs.

We have decided to apply bespoke pricing to a wider range of service types than proposed

1.3 We proposed in March to apply bespoke pricing only to licences for frequencies used to support Air Ground, Aerodrome Flight Information Service, Tower, Approach and Automated Terminal Information Service. We selected these service types as coverage varies widely between assignments and fees which vary with coverage would provide incentives to reduce spectrum use where this is consistent with operational needs.

1.4 We noted that, in contrast, the coverage of frequency assignments used to support Area Control, VOLMET, VHF Data Links (VDL) and Aircraft Communications Addressing and Reporting System (ACARS) currently prevents any re-use of the frequency across the whole of the UK. Under the bespoke pricing proposals which we set out, all of these assignments would, therefore, attract the same bespoke fee. We therefore considered that there might be little value in notionally deriving fees on a bespoke basis. We acknowledged, however, that there may be a case for future proofing fees so that if sub national assignments of these service types became feasible, fees would reflect the variation. This latter view was supported by a number of stakeholders and we have decided to extend bespoke pricing principles also to Area Control, VOLMET, ACARS and VDL assignments.

1.5 We maintain the view that there would little value in attempting to apply bespoke pricing principles to other service types, including Operational Control (OPCs), Aerodrome Surface, Offshore assignments and Sporting frequencies as these are usually assigned on a very localised and/or non exclusive basis.

Fee increases will be phased in during the 5 years to May 2016

1.6 As proposed, we will phase in fee increases over the period to May 2016. During that time bespoke fees will be capped at the level of the equivalent generic fees set out in our statement published in December 2010. The first fee changes will be implemented from May 2012. Revised fees will apply from that date as and when annual fees are payable for existing licences or new licences are granted. There will be no retrospective adjustment of fees already paid.

1.7 The overall impact of implementing bespoke fees instead of generic fees will be a reduction of about £ 450k per year in the fees payable by the aeronautical sector, when fees have been fully implemented in 2016. Over the medium term, we also anticipate that licensees will review their spectrum needs, reducing coverage where this is consistent with operational requirements. This is likely to reduce further the fees payable for the current population of assignments, while freeing up frequencies for assignments to support new uses within the sector.

The full document is available below