4.3.2 Spectrum

Most countries allocate spectrum on a national basis in accordance with the ITU frequency allocation table, and then assign specific frequencies for use by particular radio services. Traditionally, spectrum licences have been subject to stricter government controls than other types of licences because they involve the use of a scarce resource and can be hampered by interference.

Policy-makers and regulators are beginning to introduce changes within spectrum regulations to address the challenges of convergence. First, regulators are starting to grant the right to use spectrum without regard to the type of technology being used (i.e., technology-neutral approach). Australia, New Zealand and Guatemala have taken steps to improve their regulations to be more technology neutral, and in India, TRAI has published two consultation documents soliciting opinions on various convergence-related issues including its proposed technology-neutral spectrum licensing regime and whether there should be flexibility in spectrum allocation to take full advantages of new services and technologies.1

The United States has similar rules to Australia and generally takes a technology-neutral approach. Congress authorized the FCC to allocate spectrum for flexible use when it: (i) will be in the public interest; (ii) will not deter investment in communication services, systems and technology developments; (iii) will not result in harmful interference; and (iv) is consistent with international agreements.2

Second, regulators are allowing spectrum trading or in-band migration. In Australia, spectrum licences are tradable and technology neutral.3 Spectrum licences authorize the use of spectrum and licensees are free to use any device and technology within their spectrum, provided that such devices comply with the conditions of the licences and the advisory guidelines established for the corresponding bands. To avoid interference, the Australian Communications Authority (ACA) creates a document called “interference management framework” for each auction in which it sets forth the rules for spectrum use.4 In addition, in Guatemala, the 1996 Telecommunications Law5 introduced private spectrum rights that are granted in frequency usage portions (Títulos de Uso de Frecuencias – TUC), which have technical limitations to protect against interference (e.g., maximum power transmission and emission). These private rights are limited for a period of time (15 years plus an additional 15 year extension if requested), but they can be traded without limitation other than the technical condition related to each TUC to protect against interference.

(a) Introduction of Technology Neutrality in Spectrum Regulation

The introduction of technology neutrality in spectrum regulation brings with it certain limitations. The premise of a technology-neutral approach is that any service should be provided through any kind of technology in any frequency band, and the use of spectrum can be altered at any time. However, in practical terms, this is not feasible for various reasons:6

1. Interference. Traditionally, regulators have addressed interference problems by mapping the services and allocating them in a national table of frequencies. Only those services allowed in a frequency band could be licensed therein. However, now that countries have introduced a technology-neutral approach in spectrum regulation, interference issues may be dealt with in a different manner. One option followed by certain regulators is to issue specific technical rules associated with the specific spectrum granted. These technical rules introduce some limitations to the spectrum use, and thus in the strictest sense full technology neutrality is not possible, but it does resolve the problem of interference.
   
   
2. Economies of scale. The implementation of new technologies is more effective and economically viable when efficient economies of scale (e.g., decreases in the cost of equipment and technology development) are achieved by industry coordinating in the development of a standard and the identification of specific spectrum bands. In certain instances, countries and regions with industrial interests tend to develop their own standards (e.g., GSM in Europe). A technology-neutral approach in spectrum regulation challenges this coordination as different technologies and standards could be deployed in the same spectrum bands. However, although the costs related to deploying different technologies and standards are potentially higher in the short term because the economies of scale of each standard are lower than if a unified standard is adopted, a standard competition policy could have its benefits in the medium term because standards are enhanced and improved in a competition environment, providing consumers with better options and reducing technology costs.
   
   
3. International coordination. The ITU Radio Regulations, which are binding on the signatories of the ITU Constitution and Convention, are the international regulations used by the member nations to allocate and manage spectrum within their jurisdictions. The Radio Regulations affect the extent to which technology neutrality can be implemented; however, the ITU Radio Regulations are broad enough to allow development of different radiocommunications services within the designated spectrum bands, so countries still have a wide degree of discretion to introduce technology neutrality.

(b) Spectrum Trading

A second response to convergence has been the introduction of spectrum trading and in-band migration. Spectrum trading refers to the ability of licensees to sell or trade their spectrum rights. Countries may decide to limit spectrum trading for specific uses or technologies or to allow unlimited trading except for requiring adherence to rules regarding interference (Table 4-5).

Within the EU, the NRF allows spectrum trading.7 In 2004, certain member states and the European Commission commissioned an independent study regarding the conditions and options of introducing spectrum trading. The report recommended the implementation of spectrum trading and further liberalization of spectrum use.8 The United Kingdom has already allowed spectrum trading for certain types of licensed transmissions, and is expected to expand to more types of licences.9 Furthermore, the United Kingdom has introduced measures to liberalize spectrum by, among other things, reducing obligations of current licences and allowing them to modify their spectrum use provided they do not cause interference.10

(c) In-band Migration

Various countries are introducing in-band migration which refers to the policy of allowing operators to use existing licensed spectrum to provide new services. Jurisdictions in the Americas and Asia have used this policy with the introduction of IMT-2000 systems,11 allowing existing mobile operators to provide third generation (3G) networks in their assigned frequencies. This policy has permitted operators to decide when to deploy 3G networks and has been effective in reducing implementation costs because it has allowed operators to use their existing spectrum without incurring the cost of new licences. As a result, 3G mobile networks have proliferated throughout these two regions.

(d) New Wireless Technologies

Regulators are also facing the introduction of Wireless Local Area Networks (WLAN and WiFi), technologies that operate in the Industrial, Scientific and Medical (ISM) bands. The ISM bands are generally unlicensed because they operate on a non-interference basis. Regulators have generally allowed WiFi networks to operate unlicensed, provided thattheir transmitting characteristics fall into those designed for that band. In practice, this has resulted in the implementation of a technology-neutrality approach for the ISM band. For example, of the 67 countries that responded to the ITU’s annual regulatory survey,,12 only two prohibit WLANs in the 2.4 GHz band and four in the 5 GHz band. Thirty-nine countries allow WLANs without any prior notification or registration in the 2.4 GHz band, and 25 in the 5 GHz band. Finally, 27 countries allow WLANs with a simple registration or notification in the 2.4 GHz band and 28 in the 5 GHz band. In line with the “hands-off” policy approach, the European Commission has issued a recommendation 13 calling on EU member states to facilitate WLANs without imposing any specific regulatory conditions. In Singapore, the band in which WLAN operates was already being used. To facilitate the introduction of WLANs, the regulator migrated existing systems out of the band to allow WLANs to operate.

New wireless technologies are introducing challenges to regulators. These technologies, such as WiMAX (Wireless Inter-operability for Microwave Access) have a wider geographical coverage than current wireless technologies, such as WiFi. WiMAX will be able to provide fixed, nomadic and portable wireless broadband connectivity (the fixed expected capacity is 40 Mpbs and the mobile is 15 Mpbs).14 Although the initial specification operated in the 10-66 GHz bands, it was further amended to operate additionally in the 2-11 GHz bands. This has made the technology available in a range of radiocommunications bands. An improvement of the WiMAX standard, which is expected to be completed in 2006, will be mobility and regional roaming.

Due to the need to achieve the efficient economies of scale for WiMAX technology, the WiMAX Forum15 is trying to obtain a harmonization of WiMAX deployment in three bands (the licence exempt 5GHz band, the 3.5 GHz band and the 2.5 GHz band).16

Regulators are sensitive about the benefits of the introduction of new wireless standards and in 2005 some started the process to licence some of these bands, in some cases on a technology-neutral basis, having in mind the deployment of WiMAX technologies.

(e) Digital Terrestrial Television

The introduction of digital television in satellite and cable broadcasting was generally lauded as an improvement in technology that would offer consumers better quality and interactive services. However, given its spectrum implications, digital terrestrial television (DTTV) has gained the attention of regulators and policy-makers.

DTTV is more spectrum efficient than analogue terrestrial television, and therefore requires less spectrum per channel. As a result, it makes available a considerable amount of spectrum in bands that new and existing technologies are demanding. In addition, in order to receive DTTV consumers must acquire a new television set or a top box, introducing a disruptive effect for consumers that must be carefully managed.

Regulators and policy-makers are facing the challenges arising from these two factors by establishing policies to: (i) require analogue broadcasters to give back analogue spectrum and assign the newly available spectrum to new uses, and (ii) pursue a smooth transition for consumers that minimizes the disruptive effect of requiring a new device.

Most countries have implemented policies establishing long parallel emissions periods allowing consumers to have a smooth transition, and designating a specific date whereby broadcasters must switchover from analogue television (i.e., switch-off date) to DTTV. Countries such as Italy, Germany, Spain, Australia, and Japan have established analogue television switch-off dates from 2007 to 2012, implementing a parallel emissions period averaging between eight and ten years.

Initially, countries like the United Kingdom, decided not to mandate a specific switch-off date on the basis that the transition should occur when specific coverage and affordability conditions were met.17 However, the transition process was occurring at a slower pace than anticipated by Ofcom , and thus in December 2004 Ofcom issued broadcasters digital licences in place of their analogue licences and established a switch-off date of 31 December 2012.18

In the United States, the 1997 Balanced Budget Act, amended the Telecommunications Act19 and established 31 December 2006 as the switch-off date, but allowed analogue broadcasters to continue their emissions until more than 85% of households had a digital receiver. Realizing that this condition would permit analogue television to continue far beyond the originally anticipated 2006 switch-off date, in December 2005 the U.S. Congress passed legislation intended to establish a mandatory switch-off date of 17 February 2009.20

Unlike the United States and the United Kingdom, other jurisdictions, such as Canada, have not set a specific switch-off date and opted to allow the market to dictate the introduction of DTTV. In India, TRAI stated in its recommendations on Private Terrestrial TV Broadcasting Service21 that, although switchover to DTTV was necessary in light of similar developments worldwide, analogue television would continue to dominate the Indian market for several years. Thus, TRAI recommended allowing both analogue and digital television without setting a switch-off date, provided sufficient spectrum was available.

Among the countries that have established a switch-off date for analogue television, some jurisdictions are accelerating this date to expedite the process to transition spectrum and assign it to new uses. Within the EU, the EC issued a communication proposing that member states accelerate the switch-off date to 2010 if possible and establish 2012 as the common EU switch-off date.22 Spain and Germany responded by accelerating the switch-off date to 2010 and 2007, respectively. Overall, ten member states have set the switch-off date to 2010 and ten others to 2012.23

Similar to the United States and the United Kingdom, the EC rationale for changing the switch-off date was twofold: (i) to benefit consumers by introducing DTTV improvements in the market (e.g., interactive services, better picture quality, sound and mobile reception) and (ii) obtain the economic benefits of the freed-up spectrum that can be used to enhance broadcasting services and other uses.24

An open issue currently being debated in various countries is how the freed-up spectrum will be used and what new uses should be assigned to these bands. Jurisdictions, such as the EU, are initiating this debate, where the EC has issued a communication calling on member states to launch a debate on the use of the freed-up spectrum resulting from the switchover to harmonize its use in the EU area.25 The EC, based on recommendations from the EU Radio Spectrum Policy Group,26 has identified three categories of possible spectrum use: (i) improvement of terrestrial broadcasting services (e.g., services with higher quality, such as HDTV, or enhanced interactive options); (ii) converged broadcasting services (e.g., mobile television), and; (iii) potential non-broadcasting uses including new technologies and existing technologies that do not currently operate in these frequencies (e.g., extension of 3G services).

ENDNOTES

1 TRAI, Consultation Paper No. 11/2004: Efficient Utilization, Spectrum Allocation, and Spectrum Pricing, 31 May 2004, available at 
http://www.trai.gov.in/trai/upload/ConsultationPapers/74/consultation%20paper%20on%20spectrum%20released.pdf and Consultation Paper No. 1/2006: Issues relating to Convergence and Competition in Broadcasting and Telecommunications, 2 January 2006.

2 Balanced Budget Act of 1997, Pub. L. 105-33, 111 Stat. 251 (1997) 47 U.S.C. § 3004 (2000).

3 Radiocommunications Act 1992, Act No. 174 of 1992, as amended, at
http://www.comlaw.gov.au/comlaw/Legislation/ActCompilation1.nsf/0/F8047D62822494A9CA256F71004D84F4/$file/Radiocommns1992.pdf.

4 See http://www.acma.gov.au/WEB/STANDARD/pc=PC_300171.

5 Ley General de Telecomunicaciones, Decree 94-96 of the Congress of the Guatemalan Republic as amended by Decree 155-97 of the Congress of the Guatemalan Republic (Congreso de la República de Guatemala), at http://www.itu.int/ITU-D/treg/Legislation/Guatemala/leygen.pdf.

6 Chris Doyle, Convergence and Spectrum Licensing, in Trends in Telecommunications Reform 2004/2005: Licensing in an Era of Convergence, ITU (2004).

7 See Framework Directive, Art. 9.

8 A report commissioned by the European Commission found that two-thirds of European countries are considering implementing spectrum trading. European Commission, Study of the Conditions and Options in Introducing Secondary Trading of Radio Spectrum in the European Community, May 2004, at http://ec.europa.eu/information_society/policy/radio_spectrum/docs/ref_docs/secontrad_study/secontrad_final.pdf

9 Ofcom, Statement on Spectrum Trading (2004), at
http://www.ofcom.org.uk/consult/condocs/spec_trad/statement/sts.pdf.

10 Ofcom, Statement on Spectrum Liberalization (2005), at
http://www.ofcom.org.uk/consult/condocs/sfr/sfr/

11 According to the ITU webpage: “International Mobile Telecommunications-2000 (IMT-2000) is the global standard for third generation (3G) wireless communications, defined by a set of interdependent ITU Recommendations. IMT-2000 provides a framework for worldwide wireless access by linking the diverse systems of terrestrial and/or satellite based networks.” For further information, see http://www.itu.int/home/imt.html

12 ITU World Telecommunication Regulatory Database 2005.

13 http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=32003H0203&model=guichett.

14 WiMax Forum, at www.wimaxforum.org.

15 WiMax Forum, White Paper: Regulatory Position and Goals of the WiMax Forum, August 2004.

16 Id.

17 These conditions were that: (i) DTTV had a coverage of 99.4% households; (ii) 95% of consumers had a digital receiver, and; (iii) such receivers were affordable. House of Commons Debate, The Secretary of State for Culture, Media and Sport (Mr. Chris Smith), 29 October 1999, available at http://www.parliament.the-stationery-office.co.uk/pa/cm199899/cmhansrd/vo991029/debtext/91029-01.htm.

18 Ofcom’s Press Release, Broadcasters Accept Digital Replacement Licences, 14 December 2004, at http://www.ofcom.org.uk/media/news/2004/12/nr_20041214.

19 Communications Act. 47 USC. Section 309 (j) (14) (A) and (B) as added by the Balanced Budget Act of 1997, Pub L No 105-33 Stat. 251 (1997).

20 Deficit Reduction Act of 2005. S.1932. Subtitle D - Digital Television Transition Act of 2005.

21 TRAI, Recommendations on Issues Relating to Private Terrestrial TV Broadcasting Service, 29 August, 2005, available at http://www.trai.gov.in/trai/upload/recommendations/8/recom29aug05.pdf.

22 Communication from the Commission to the Council, The European Parliament, The European Economic and Social Committee and the Committee of Regions on accelerating the transition from analogue to digital broadcasting, COM (2005) 204 final, 24 May 2005 available at http://europa.eu.int/information_society/policy/ecomm/doc/info_centre/communic_reports/switchover/com_2005_0204_f_en_acte.pdf.

23 Telecom Council, MEMO/05/458, Brussels, 1 December 2005.

24 Communication from the Commission to the Council, The European Parliament, The European Economic and Social Committee and the Committee of Regions on accelerating the transition from analogue to digital broadcasting, COM (2005) 204 final, 24 May 2005, available at http://europa.eu.int/information_society/policy/ecomm/doc/info_centre/communic_reports/switchover/com_2005_0204_f_en_acte.pdf.

25 Communication from the Commission to the Council, The European Parliament, The European Economic and Social Committee and the Committee of Regions on the EU spectrum policy priorities for the digital switchover in the context of the upcoming ITU Regional Radiocommunications Conference 2006 (RRC-06), COM (2005) 461 final, 29 September 2005, available at http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/com/2005/com2005_0461en01.pdf.

26 Radio Spectrum Policy Group (RSPG) Opinion on the “Impact on spectrum of the switchover to digital broadcasting”, RSPG04-55, available at http://rspg.groups.eu.int.