1 On-going work in ITU-R Study Group 1 on market-based spectrum management issues Mr Terry Jeacock (United Kingdom) Former Chairman ITU-R Study Group 1 Former Co-chairman JG WTDC Resolution 9 Regional Seminar on Economic aspects of spectrum management for Arab States

2 Regional Seminar on Economic aspects of spectrum management for Arab States Future of national spectrum management ?? “Property Rights” (a.k.a. “the MARKET”) - “Market knows best” - Auctions/Secondary trading - High flexibility - Pro “Big Business” “Command & Control” (a.k.a. “GOSPLAN” ) - “Government knows best” - “first come, first served” - Beauty Contests - Low flexibility - Pro “Government” “Licence-free” (a.k.a. “the COMMONS”) “Nobody knows best” - No Legal Protection - Technical Protection - High flexibility - Pro- “Innovation” - “Optimists” Economists: “maximise value” Engineers: “avoid interference”

3 SG 1 studies on market-based spectrum management Regional Seminar on Economic aspects of spectrum management for Arab States Mechanisms to assist financing national spectrum management?  Additional tools to assist when demand exceeds supply?  Opportunities to decrease national regulation?  Mechanisms to increase flexibility to respond quickly to market needs?  A “Spectrum Tax” to raise revenue for the government?  A complete replacement for “traditional” spectrum management? 

4 Scope of Study Group 1 (relevant to this workshop): Development of principles and techniques for effective spectrum management; Sharing criteria and methods; Techniques for spectrum monitoring and long-term strategies for spectrum utilization and economic approaches to national spectrum management; Assistance in matters within its competence to developing countries in cooperation with the Telecommunication Development Sector. Regional Seminar on Economic aspects of spectrum management for Arab States

5 Work programme of Study Group 1 (relevant to this workshop): Spectrum economics Alternative methods of national spectrum management Increased flexibility in spectrum allocation Role and task of radio monitoring in a liberal environment In co-operation with ITU-D SG2: development of the “Spectrum Fees” database in accordance with WTDC-02 Resolution 9 and Question 21/2 Regional Seminar on Economic aspects of spectrum management for Arab States

6 Key Questions under study: Q.206: Strategies for economic approaches to national spectrum management and their financing; Q.207: Assessment, for spectrum planning and strategic development, of the benefits arising from the use of the radio spectrum; Q.208: Alternative methods of national spectrum management; Q.216: Spectrum redeployment as a method of national spectrum management; “Flexible” spectrum use: - Q.224: Technical convergence (for WRC-10), - Q.229: International regulatory framework (for WRC-07) ITU-D Q.21/2: Calculation of Spectrum Fees Regional Seminar on Economic aspects of spectrum management for Arab States

7 Results of studies: ITU-R Report SM Economic aspects of spectrum management Consists of five Chapters which describe the different economic approaches for spectrum management activities; Includes case studies on administrations’ experience regarding the economic aspects of spectrum management; intended for the use by administrations of both developing and developed countries in their development of strategies on economic approaches to national spectrum management and to the financing of this activity; analysis of the benefits of strategic development and the methods of technical support for national spectrum management. Regional Seminar on Economic aspects of spectrum management for Arab States

8 ITU-R Report SM : Strategies for economic approaches to national spectrum management and their financing Spectrum pricing Provides transparency in national assignment; Discourages spectrum stockpiling and hoarding; Provides an incentive for spectrum refarming; Method to quickly assign spectrum when there is a high level of competition and demand; Approaches Spectrum fees: Incentive, Opportunity Cost - based on actual spectrum use and estimated market value Auctions -Market forces fully determine the value of the spectrum Regional Seminar on Economic aspects of spectrum management for Arab States

9 ITU-R Report SM : Spectrum Rights and Spectrum Trading As a consequence of Spectrum Pricing, need to consider: Spectrum Rights obtained by the licencee: Definition of what the licencee may use the spectrum for, Protection from interference etc.. Spectrum Rights retained by the administration: All international obligations and Spectrum Trading Trade all or part of the spectrum associated with the licence Transferrable spectrum rights. Regional Seminar on Economic aspects of spectrum management for Arab States

10 ITU-R Report SM : Assessment, for spectrum planning and strategic development purposes, of the benefits arising from the use of the radio spectrum Requirement for assessment Assessment of the economic benefits are useful in making spectrum planning decisions and in the comparison of different options Quantification of these benefits is required for spectrum planning and strategic development Methods gross domestic product (GDP) and employment; consumer and producer surplus. Regional Seminar on Economic aspects of spectrum management for Arab States

11 ITU-R Report SM : Alternative methods of national spectrum management As consequence of market based approaches, administrations should consider options and requirements to transfer spectrum management resonsibility to (e.g.): communication groups with a direct interest in spectrum such as advisory committees, trade associations; professional organizations, and quasi-governmental associations; frequency coordinators (and coordination groups) and designated spectrum managers; and spectrum management consultants, and support contractors. Regional Seminar on Economic aspects of spectrum management for Arab States

12 Results of studies:Recommendation SM.1603 “Spectrum redeployment “refarming” as a method of national spectrum management” Definition: “A combination of administrative, financial and technical measures aimed at removing users or equipment of the existing frequency assignments either completely or partially from a particular frequency band. The frequency band may then be allocated to the same or different service(s). These measures may be implemented in short, medium or long time-scales.” Contents: An analysis of the requirements, methods, costs, funding and compensation arrangements, potential problems. A case study. Regional Seminar on Economic aspects of spectrum management for Arab States

13 “Flexible” spectrum allocation? Likely requirement of spectrum trading because: the less restrictions on applications that can use a spectrum range, the greater its value; Opportunities to apply RR No. 4.4 ? But no protection rights and non-interference obligations = less value, especially in border areas; Broader Service definitions in RR? Improved methods for co-ordination between Services with dissimilar technical characteristics? Must maintain administrations’ rights and equitable spectrum access principles. Regional Seminar on Economic aspects of spectrum management for Arab States

14 Results of studies: Flexible spectrum allocation Approved Recommendations: SM.1133: Spectrum utilization of broadly defined services SM : National alternative allocation methods In preparation: Report to WRC-07: International regulatory framework Report to WRC-10: Technical convergence (mobile, fixed broadcasting) Regional Seminar on Economic aspects of spectrum management for Arab States

15 Role and task of radio monitoring in a liberal environment Q.225: Inspection of radio stations to verify compliance with license parameters Q.215: Monitoring of the radio coverage of land mobile networks to verify compliance with a given license Regional Seminar on Economic aspects of spectrum management for Arab States

16 WTDC-02 Resolution 9 and Question 21/2 “Calculation of frequency fees” Study: Analysis of the various principles, methods, formulas and approaches used by administrations for calculating spectrum use fees; Output: An electronic document structure and links enabling users to have easy access to data on frequency fee calculation formulas for the users of the radio frequency spectrum in different countries; Output: Case studies and examples of use. Regional Seminar on Economic aspects of spectrum management for Arab States

17 Regional Seminar on Economic aspects of spectrum management for Arab States Spectrum Fees Data Base: Query screen

18 Regional Seminar on Economic aspects of spectrum management for Arab States Formula: K1*K2*(Total Frequency Band / 25 KHZ)* € K1=frequency band coefficient: 1 = below 470 MHz, 0.8= MHz etc….. K2=geographic coverage coefficient: actual coverage area / total area of country

19 Handbook on National Spectrum Management Chapter 6: Spectrum Economics (Written to be low on theory, high on practice!) Spectrum licencing approaches Spectrum pricing Spectrum rights Annex 1: An application of spectrum pricing Annex 2: Cost of spectrum redeployment Regional Seminar on Economic aspects of spectrum management for Arab States Cost of Handbook 73 CHF

20 Finally Thank you for your attention! Regional Seminar on Economic aspects of spectrum management for Arab States Terry Jeacock has retired from the UK Administration and is attending this Workshop as an independent expert. He does not represent Ofcom, the United Kingdom or the ITU. He has resigned his ITU chairmanships. The information presented has been obtained from publicly available sources, including: ITU (Study Group 1) ( European thematic portal (europa.eu.int/information_society) European Radiocommunication Office (