Radio Spectrum Policy in Europe Research Seminar on Telecommunications Business Radio Spectrum Policy in Europe Timo Smura Henrik Saksela

Radio Spectrum Policy in Europe 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 20.4.2006 Radio Spectrum Policy in Europe

Major drivers of European policy Radio Spectrum Decision Policy and legal framework Radio Spectrum Committee Radio Spectrum Policy Group Decision Radio Spectrum Policy Group 20.4.2006 Radio Spectrum Policy in Europe

Radio Spectrum Policy Group Advice to EC on policy and strategy Spectrum trading Spectrum technology neutrality Impact of digitalisation of broadcasting 20.4.2006 Radio Spectrum Policy in Europe

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 20.4.2006 Radio Spectrum Policy in Europe

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! 20.4.2006 Radio Spectrum Policy in Europe

Spectrum management approaches: three 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? 20.4.2006 Radio Spectrum Policy in Europe

Spectrum policy approaches allocation 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 20.4.2006 Radio Spectrum Policy in Europe

Radio Spectrum Policy in Europe 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 20.4.2006 Radio Spectrum Policy in Europe

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 20.4.2006 Radio Spectrum Policy in Europe

Radio Spectrum Policy in Europe 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 20.4.2006 Radio Spectrum Policy in Europe

Radio Spectrum Policy in Europe 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? 20.4.2006 Radio Spectrum Policy in Europe

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” 20.4.2006 Radio Spectrum Policy in Europe

Spectrum policy impacts cont. One group completely opposed to change Satellite operators Spectrum trading without change-of-use better than complete liberalisation 20.4.2006 Radio Spectrum Policy in Europe

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 20.4.2006 Radio Spectrum Policy in Europe

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 20.4.2006 Radio Spectrum Policy in Europe

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 20.4.2006 Radio Spectrum Policy in Europe

Spectrum policy impacts cont. Negative effects of liberalisation Smaller economies of scale for device manufacturers Interworking and roaming difficult Higher prices for end users 20.4.2006 Radio Spectrum Policy in Europe

Spectrum policy impacts - Summary 20.4.2006 Radio Spectrum Policy in Europe

Radio Spectrum Policy in Europe 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! 20.4.2006 Radio Spectrum Policy in Europe