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

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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

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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
Approach Spectrum allocation Spectrum assignment
Command-and-control approach Centralized, use of spectrum pre-defined Centralized, trading not allowed
Market-based approach Liberalized, license holders may choose how to utilize the spectrum Primary assignment centralized, secondary trading allowed
Commons approach Centralized, restrictions on technology and Tx power levels Unlicensed spectrum, no assignments
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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!