Europe pushes carriers to share their spectrum with 'innovators'
The European Commission is moving to enable spectrum-sharing and has even gone so far as to suggest that new regulatory approaches be applied not just to new spectrum holders but current licensees as well, raising the specter that mobile operators could one day be forced to cough up their spectrum for sharing with other entities.
"A coordinated European approach to sharing spectrum will lead to greater mobile network capacity, cheaper wireless broadband, and new markets such as tradable secondary rights for a given spectrum allocation," said the EC in a release announcing the plan.
The commission hopes to gain support from both the European Parliament and the Council of the European Union for a shared-spectrum regulatory environment, with the EC's pitch including the pledge that "a coordinated European approach to sharing spectrum will lead to greater mobile network capacity, cheaper wireless broadband and new markets such as tradable secondary rights for a given spectrum allocation."
The EC said that under the envisioned regulatory regime, spectrum holders would have rights to use a given frequency band on a shared basis with guaranteed levels of protection against interference.
Referring to radio spectrum as "economic oxygen," Neelie Kroes, vice-president of the EC responsible for Europe's digital agenda, said the commission's plan would enable Europe to maximize the increasingly scarce resource of radio spectrum by reusing it and creating a single market for 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," she said.
As the first measure of the EU's new Radio Spectrum Policy Program, the EC is calling for two regulatory changes. First, the commission wants national regulators to monitor and extend the harmonized license-exempt bands in their markets. Second, the EC is calling for the fostering of 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.
An ongoing assessment of spectrum inventory "will provide relevant usage information about frequency bands and thus facilitate the identification of beneficial sharing opportunities (BSO) in the single market for both licensed and license-exempt spectrum," said the EC. "Once established, BSOs can also be recorded in the inventory as benchmarks for other geographical areas or similar use in other frequency bands."
In a public memo, the EC suggested that spectrum access could be granted to so-called "innovators" that deploy technologies facilitating sharing. These innovators could identify BSOs in both licensed and license-exempt spectrum bands and apply for access. "Regulators could encourage contracts between users, who would all have shared spectrum access rights. Incumbent spectrum holders could use their resources more efficiently by sharing them on a contractual basis," said the EC.
Europe's national regulators may not appreciate the EC's timing for its spectrum-sharing announcement as it could dissuade operators from bidding the billions of dollars that LTE licenses had been expected to attract across the continent, given that the perceived value of shared licenses will likely be considerably less than that for exclusive ones.
And while it seems farfetched to assume that incumbent spectrum holders that have paid billions for exclusive spectrum licenses would be interested in sharing their frequencies, the EC contends that might just be the perfect scenario for licensees seeking operating partnerships "in areas where demand for services is uncertain."
Further, carriers could opt to join forces to acquire shared spectrum licenses to get additional spectrum resources. "However, every time such a sharing arrangement is agreed between operators active in the same market, the authorities would have to take into account the conditions under which the license was issued, in particular in regard to competition aspects," the EC cautioned.
The concept of spectrum sharing has become a political hot potato in the United States following a recommendation from the President's Council of Advisors on Policy and Technology (PCAST) that commercial entities learn to share spectrum with the federal government rather than expect exclusive access. Industry trade group CTIA and operator AT&T (NYSE:T) have voiced support for exploring the idea in principle but have recommended that clearing spectrum for exclusive, licensed use is a better way to foster innovation and competition.
The EC noted its proposal differs from PCAST's in that Europe is targeting any and all spectrum with its sharing vision, while the United States is primarily advancing the use of TV white space and the sharing of spectrum currently allocated for government use. "We do not propose sharing as an alternative to refarming, but as a complementary source of spectrum resources. As such, the proposed mechanism for identifying BSOs is agnostic in regard to whether it is applied before or after refarming of a given band," said the EC.
GigaOM suggested the EC may have in mind a "functional separation" for wireless akin to that which exists in European landline telecommunications. In that model, large European telcos such as BT have been forced to split their consumer businesses from their infrastructure so they can offer wholesale network access to their rivals.
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