Radio Spectrum Policy in Europe

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Radio Spectrum Policy in Europe
T-109.510 Research Seminar on Telecommunications
Business

• Timo Smura
• Henrik Saksela

2
Radio spectrum is

• Valuable
• 2 2.5 of EU GDP
• 85 of value by mobile and broadcasting
• A scarce resource
• Need for regulation
• Increasing in demand
• Rapid development of new technologies

3
Major drivers of European policy

• Radio Spectrum Decision
• Policy and legal framework
• Radio Spectrum Committee
• Radio Spectrum Policy Group Decision
• Radio Spectrum Policy Group

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Radio Spectrum Policy Group

• Advice to EC on policy and strategy
• Spectrum trading
• Spectrum technology neutrality
• Impact of digitalisation of broadcasting

5
Spectrum situation today

• Broadcasting spectrum plan
• Defined in 1961
• Becoming obsolete replacement planned
• Mobile spectrum plan
• Frequencies for GSM proposed by ITU in 1982
• European Community adopted them in 1987
• First network in 1991 (Radiolinja)
• Long-term process

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Spectrum situation tomorrow

• Broadcasting goes digital
• Estimated 50 75 of current broadcast spectrum
  free for other uses
• New mobile services
• Flash-OFDM already being deployed
• WiMAX likewise
• UWB
• ?
• More flexible management needed!

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Spectrum management approachesthree issues

• Spectrum allocation
• What types of uses should be allowed?
• Spectrum assignment
• Who should be allowed to operate the frequencies?
• Centralised vs. decentralised decisions
• Allocation assignment decided by state or by
  users?

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Spectrum policy approaches
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Command-and-control

• Traditional way
• Government decides everything
• First-come-first-served
• WiMAX frequencies in Finland
• Beauty contests
• TV, Radio, 3G in Finland and Sweden
• Auctions
• 3G in Britain, Germany

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Market-based approach

• Primary assignment by government by e.g. auctions
• Secondary trading allows rights to be sold
• Owner decides how to use spectrum
• Limitations to avoid interference
• European Commission plans to introduce spectrum
  markets in the EU by 2010

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Commons approach

• Government allocates license-exempt spectrum
• Anyone can utilize the spectrum
• Limitations
• Transmission power levels to avoid interference
• Parts of spectrum for specific technologies
• Fertile ground for innovations
• WLAN, Bluetooth
• Further harmonisation on EU-level considered

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Outlook

• Each approach has its strengths and weaknesses
• Future policy undoubtedly a combination of
  approaches
• Which combination is optimal?
• Which bands should be open for trading /
  liberalisation?
• Which bands should be unlicensed?
• Which bands should be managed by the government?

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Spectrum policy impacts

• Market-based management increases innovativeness
  and competitiveness?
• Analysis of industry responses to public
  consultation by the European Commission
• Public consultation on secondary trading of
  rights to use radio spectrum

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Spectrum policy impacts cont.

• One group completely opposed to change
• Satellite operators
• Spectrum trading without change-of-use better
  than complete liberalisation

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Spectrum policy impacts cont.

• Perceived benefits of secondary trading
• Lower entry and exit barriers
• Increased competition
• Driver for market consolidation
• Increased efficiency of spectrum usage
• Operators can balance their needs by trading
  spectrum
• Surplus capacity put to other use in sparsely
  populated areas, e.g. wireless broadband

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Spectrum policy impacts cont.

• Negative effects of secondary trading
• Spectrum hoarding
• Uncertain availability of spectrum
• Smaller incentives for long term research by
  device manufacturers
• Replacement of low revenue public interest
  services by higher revenue services

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Spectrum policy impacts cont.

• Technology neutrality without service neutrality
• Upgrade path utilizing available spectrum
• Faster time-to-market for new technologies
• Increased competition between technologies

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Spectrum policy impacts cont.

• Negative effects of liberalisation
• Smaller economies of scale for device
  manufacturers
• Interworking and roaming difficult
• Higher prices for end users

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Spectrum policy impacts - Summary
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In conclusion

• Transition to more flexible spectrum management
  will happen, but in stages
• Important to consider effects of trading and
  change-of-use separately
• Questions and comments are welcome!