Memorandum submitted by the Radiocommunications
DRAFT COMMUNICATIONS BILL: SPECTRUM MANAGEMENT
I am grateful for the opportunity to submit
this brief note to the Committee on spectrum management and OFCOM.
The Agency and Spectrum Management
Convergence of digital telecommunications, broadcasting
and computing is driving a fundamental revolution in the way we
live, work and are entertained. This technical and market convergence
is the rationale for creating a unified Office of CommunicationsOFCOMand
depends in large measure on radiocommunications. Radio is the
only medium that can provide true mobile communications and also
enables networks to be rolled out quickly and cost-effectively.
The radio spectrum is a resource of considerable,
and growing economic importance. The consumer and business benefits
derived from spectrum have been conservatively estimated to be
over £20 billion a year. Spectrum is a key raw material for
the communications revolution. But it is also a finite resource
that is under growing pressure from increasing demand. Despite
market turbulence, demand for spectrum shows no sign of slackening,
especially in the restricted frequency range that can be used
for mobile communications.
Effective spectrum management underpins future
success and growth in the communications sector. Unless spectrum
can be made available to meet demand, innovation and competition
will be held back and businesses and consumers will be worse off.
Making spectrum available at a time when convergence is causing
rapid and unpredictable change poses a severe challenge.
The Wide Range of Spectrum Users
The Agency has developed new approaches to spectrum
management to meet that challenge in the interests of all users.
Spectrum is used not only by public telecommunications operators
and broadcasters but also by a long list of others throughout
the private and public sectors. These include small businesses
with self-provided systems, the armed forces and emergency services,
radio astronomers and radio amateurs. We have over 220,000 licensees,
the great majority of whom are neither telecommunications companies
We work closely with a range of Government departments,
some of which have spectrum management responsibilities of their
own, and, with the Ministry of Defence, co-chair the official
Cabinet committee that considers and coordinates national spectrum
The Complexity of Spectrum Management
Spectrum management is a complex task that involves
a number of related functions.
Radio waves do not stop at frontiers so there
is a need for international negotiation and coordination. This
strong international dimension makes us unique in OFCOM. We have
a reputation as one of the leading spectrum managers in the world,
which enables us effectively to promote and protect UK interests.
We also plan the spectrum in terms of deciding
which frequencies should be used for which applicationsknown
as "allocation"and assigning those frequencies
to individual users in a way that provides incentives to use the
finite spectrum resource as efficiently as possible. To do this,
we use a range of techniques, including regulation, administrative
incentive pricing and auctions. Spectrum management is no longer
a purely technical or regulatory activity but increasingly involves
economic analysis and greater use of market forces to complement
Finally, we "keep the spectrum clean"
of interference and illegal transmissions.
These functions have a high degree of synergy.
For example, our national network of local offices, which deals
with interference and enforcement, also issues licences.
The Independent Review
The Agency has, since 1998, introduced far-reaching
reforms in the way the radio spectrum is managed. We have, for
example, applied administrative incentive pricing and auctions
to give incentives to use spectrum more efficiently and plan to
introduce spectrum trading, subject to the passage of the Bill.
The independent review of radio spectrum management was commissioned
to consider what more needs to be done.
Its report, published in March, broadly endorses
the policies that have been pursued following the reforms introduced
by the Wireless Telegraphy Act 1998 and makes a series of recommendations
for extending and developing them. The Government has welcomed
publication of the report and plans to issue its response in the
summer. The spectrum provisions of the draft Bill may be revised
in the light of that response. Any changes to the draft Bill will
be brought forward as soon as possible.
The draft Communications Bill
In addition to transferring to OFCOM virtually
all the Secretary of State's functions under the Wireless Telegraphy
Acts and associated legislation, the draft Bill includes a number
of other provisions on spectrum management. Their purpose is to
enhance OFCOM's ability to manage the radio spectrum effectively,
to implement the new EC Directives on electronic communications
and to improve OFCOM's powers to keep the spectrum clear of interference.
They are described in the Explanatory Notes and Policy statement
accompanying the draft Bill.
Radio spectrum is at the heart of the communications
revolution. Putting spectrum management at the heart of OFCOM
will provide a more effective regulatory regime and create conditions
conducive to the success of the communications sector, which is
so important to future prosperity and social goals. I look forward
to OFCOM continuing and building on the Agency's achievements
in managing the radio spectrum to foster a successful and competitive
economy and enhance quality of life.
22 May 2002