1. mec1595 ERG/RSPG Joint Session Göteborg, Sweden Spectrum Policy for the Many Possible Futures of Broadband in Europe February 27 2008 Martin Cave Warwick Business School, UK Martin.Cave@wbs.ac.uk

2. mec1595 2 The Issue is High Speed Broadband

3. mec1595 3 Platform Endowments in Europe 2F + WUpgraded cable system, ubiquitous DSL, 3G networks (30-40%) F + W(Near) ubiquitous DSL, 3G (50-60%) W Wireless only- 2G/3G (3-8%)

4. mec1595 4 Cable and DSL in the EU15 (millions and %) 200320052007 Cable Incumbent DSL Competitive DSL - resale - bitstream - ULL 4.1 9.6 2.8 54% 23% 8.2 24.3 16.5 30% 28% 42% 11.8 37.0 31.3 25% 17% 56%

5. mec1595 5 What Triggers NGA Investment? Revenue loss to current competitors Fear of pre-emption by rival NGA Regulatory certainty (cf. Australian approach) Prospect of adequate (non truncated) return

6. mec1595 6 Key Issue for Regulators How many competitors are enough? -2F + wireless (US generally, WBA in Malta) - 4 (Ofcom WBA notification)

7. mec1595 7 Intermediate Regulation in the Absence of Effective Competition Access with -higher cost of capital -pricing flexibility -limitations on capacity of mandated service (basic or anchor product only) -limitations on PoI- but the ladder may be broken.

8. mec1595 8 The Role of Wireless Uncertainty about future capabilities Competitive platforms: -LTE (long term evolution) -WiMax -UMB (ultra mobile broadband) Whether it is the only option or a competitive constraint, wireless opportunities must be maximised.

9. mec1595 9 Making Spectrum Available on Flexible Basis Minimum restrictions on existing assignments Refarming regimes to minimise downtime Licensing of additional spectrum as quickly as possible, without restrictions on use Minimising impediments to trade and change of use Consider synchronising transactions- the big bang

10. mec1595 10 2007

11. mec1595 11 The UK Frequency Allocations 20XX? 3kHz 300 GHz Not Allocated

12. mec1595 12 The contribution of the public sector Public sector users account for about half use of beachfront spectrum in the EU Typically, they- especially defence ministries- are subject to little scrutiny Option 1-encourage spectrum release by monetary incentives and spectrum pricing Option 2-make them part of the market system, as buyers or (more plausibly) sellers see www.spectrumaudit.org.uk

13. mec1595 13 What Level of Harmonisation in the EU? Focus on harmonisation of spectrum management techniques, not harmonisation of spectrum use De facto harmonisation will follow from manufacturer/operator interaction, subject to competition EU power needed to harmonise tradable frequencies etc. Digital dividend is a test case.