EC Proposes Radio Spectrum Sharing for Improved Efficiency

Last week the European Commission unveiled plans to deal with the exponential growth in mobile and wireless data traffic by enabling wireless technologies, including broadband, to share the use of the radio spectrum. Such an approach would lead to greater mobile network capacity, cheaper wireless broadband, and new markets such as tradable secondary rights for a given spectrum allocation.

European countries must squeeze more out of the radio waves that carry mobile voice and data if they are to cope with the huge growth in demand for data services on smartphones and tablet computers.

More than 50% of all smartphone traffic is routed over Wi-Fi networks and this type of traffic is growing four to six times faster than that on mobile networks, the commission said.

Companies that own parts of the radio wave spectrum after liberalization in the 1990s consider this capacity to be among their most valuable assets and many have been reluctant to share.

Spectrum is a finite resource so it can carry only a certain amount of traffic. If you have licences for adjacent blocks of spectrum, then you can carry more traffic. If your blocks are separated by a slice owned by someone else, you can't carry as much traffic.

With new technologies it is possible to share radio spectrum amongst several users – such as internet providers – or use the spectrum available between TV frequencies, for example, for other purposes. National spectrum regulation often does not reflect the new technical possibilities, leaving mobile and broadband users at risk of poor service as demand grows, and preventing a single market for investment in such communications markets.

European Commission spokesman Ryan Heath said,

"What we see with spectrum right now is it's broken up in incredibly tiny parts spread across 27 different member states. That is obviously not the best way to exploit the resource."

A commission proposal, which is non-binding for now, says that companies that do not own spectrum could negotiate sharing deals with those that do and ask national regulators to approve the agreements.

Such deals could also help operators to recoup some of their network-building costs by sharing spectrum in specific areas or at times of the day when it is vacant, the commission said.

Telecoms companies may be reluctant to share such resources unless they are persuaded of the potential for worthwhile returns, having had to pay high prices at auction for their slices of spectrum.

In some countries steps have already been taken to ensure that companies that do not own spectrum can still market mobile services.

A spectrum auction for very fast fourth-generation mobile licences in France required the three companies that won spectrum in the 800 MHz band to sell wholesale access to mobile virtual network operators (MVNOs). The MVNOs can then sell mobile service to consumers without owning their own networks or spectrum.

The 800 MHz band is considered the most valuable because it offers an ideal balance between the ability to carry data, travel long distances and penetrate buildings.

In Austria, Hutchison agreed to a similar accord in an effort to win approval for its acquisition of Orange Austria, which is now under antitrust review.

The European Commission said that it wants to loosen the grip of companies on parts of the spectrum to make room for innovations such as smart meters to record electricity use in buildings.

EU competition authorities forced Everything Everywhere, Britain's largest mobile operator and owner of the Orange and T-Mobile networks, to transfer some of its spectrum to rival Three.

Heath said that the European Commission's proposal would not reduce the quality of service, adding that the hope is for it to spur a secondary market for trading spectrum rights.

Neelie Kroes, the European Commissioner responsible for Europe's Digital Agenda said,

"Radio spectrum is economic oxygen, it is used by every single person and business. If we run out of spectrum then mobile networks and broadband won’t work. That is unacceptable, we must maximise this scarce resource by re-using it and creating a single market out of it. We need a single market for spectrum in order to regain global industrial leadership in mobile and data, to attract more R&D investments."

As the first measure of the EU's new Radio Spectrum Policy Programme, the Commission calls for:

  1. Regulators to support wireless innovation by monitoring and potentially extending the harmonised internal market bands in which no licence is required (so-called licence-exempt bands) through appropriate measures under the Radio Spectrum Decision;
  2. Fostering consistent regulatory approaches across the EU for shared rights of use that give incentives and legal certainty to all users (current and new) who can share valuable spectrum resources.

Source: Euractiv, EC

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