REPORT URGES EUROPEAN UNION TO MANDATE SPECTRUM TRADING

Under the new EU regulatory framework, all member states have the option of introducing secondary trading, the report said. A few, including the U.K., Austria and Sweden, are exploring the possibilities of spectrum trading, liberalization or both, it said. But in many areas of Europe, demand for access to particular frequencies now outstrips supply, and existing spectrum management systems fail to promote efficient use of spectrum, analysts said.

European countries have traditionally taken a “command- and control” approach, with govts. making all decisions about spectrum allocation and assignment, the report said. That approach, while effective in controlling the use of spectrum to avoid interference, “places a huge responsibility” on authorities to pick appropriate services, technologies and uses, it said. Some spectrum management authorities (SMAs) have experimented with other management models, such as allocating spectrum for unlicensed use, letting low-power users share the same spectrum with no protection from interference, and holding auctions to let the market decide primary assignment where spectrum usage rights are scarce. However, analysts said, “existing spectrum management approaches cannot be relied upon to distribute spectrum efficiently.” The report recommends both trading and relaxation of restrictions on services and technologies associated with spectrum usage rights as a possible solution.

Five countries -- the U.S., New Zealand, Guatemala, Canada and Australia -- now have liberal spectrum management regimes and their experiences have been generally positive, the report said. But up to 1/3 of European countries haven’t implemented spectrum trading, and countries that plan to so do are taking different approaches, analysts said. And while EU member states generally support the idea of spectrum trading, the report said, “judgment is more reserved on liberalisation.” Given the divergence of thought, the report said, pan-European coordination of spectrum trading by bodies such as the Radio Spectrum Policy Group and Radio Spectrum Committee is desirable.

The report recommended: (1) Member states create tradable rights, basing the definition on a minimum set of characteristics such as geographical extent and frequencies coordinated via a technical implementation measure. (2) The EU introduce binding measures to prevent member states from putting prior restrictions on the type of transfer permitted. (3) The EU require member states to introduce interference management regimes suitable for trading and liberalization, with each country retaining discretion over the details. (4) Member states be required to adopt a common approach to preventing monopolistic abuses based on general EU competition law.

Analysts also recommended that member states permit both trading and liberalization in frequencies currently allocated to broadcasting-satellite, fixed links where usage rights are assigned exclusively to individual users, fixed wireless access, land mobile-private mobile radio where usage rights are assigned to individual users, land mobile-public mobile networks, satellite-fixed and mobile, and special users groups such as the military and public safety, “subject to ensuring that essential services are not disrupted.” The report recommended trading (with optional liberalization) in terrestrial broadcasting, land mobile-private mobile radio where users share usage rights and the SMA undertakes coordination of individual users, and fixed links where spectrum rights are shared between users and the SMA undertakes coordination.

Last Nov., the U.K. Office of Communications (OFCOM) launched a consultation on spectrum trading. The consultation, which closed in Feb., drew many comments which OFCOM is still working through, a spokesman said. Based on the responses, he said, the agency intends to run further consultations on more specific aspects of spectrum trading. The new consultations are expected to appear “later in the year -- maybe this summer,” the spokesman said. It’s too early to say what areas they will address, he said. The regulator proposed both trading and liberalization of spectrum use, saying the former would allow holders of Wireless Telegraphy Act licenses to buy and sell all or part of their rights to use spectrum, and the latter give licensees a mechanism for changing the use of their licensed spectrum, “subject to some constraints.”

OFCOM proposed to introduce both policies “quickly and pragmatically” in a band by band rollout over 4 years. However, it said, “spectrum trading is not an end in itself.” A well-designed system could yield substantial benefits to the U.K.’s economy and consumers, OFCOM said, while a poorly designed one could hamper the management of the radio spectrum.