* Spectrum trading and liberalisation will facilitate introduction of new services and promote innovation; without measures innovation may move outside Europe
* Trading will remove barriers to market entry and promote competition in supply of spectrum-derived services
* Report recommends that Member States manage implementation of spectrum trading but that national frameworks should have certain common generic features across the EU
* Full report available on EC web site; workshop scheduled for 15 July
CAMBRIDGE, LONDON, UK & BRUSSELS, BELGIUM, June 1, 2004 - The European Commission (EC) should promote the introduction of both spectrum trading and liberalisation through the use of appropriate binding measures on Member States, according to a major study carried out for the EC between September 2003 and May 2004 by Analysys Consulting Ltd, DotEcon Ltd and Hogan & Hartson LLP.
“Services derived from radio spectrum are of great economic and social value to Europe, and there are substantial benefits to European citizens from ensuring that spectrum is used efficiently to deploy services of the greatest benefit to them,” says Amit Nagpal, senior consultant at Analysys Consulting. “The combination of trading and liberalisation will facilitate the introduction of new services and promote innovation. It will also remove the barriers to market entry created by blocks of frequencies being reserved for particular uses, and promote competition in the supply of spectrum-derived services.”
The final report of the 'Study on conditions and options for introducing secondary trading of radio spectrum in the European Community', published by the EC on 25 May 2004, also recommends that many of the details of how spectrum trading is actually implemented should be managed by individual Member States, providing that national spectrum management frameworks have certain generic features.
The report states that, in general, benefits from spectrum trading would greatly outweigh the costs associated with trading and liberalisation, although there are certain uses of spectrum (e.g. certain global ‘safety of life’ services) where trading or liberalisation would not be appropriate.
According to the study, many of the benefits would accrue locally to the country introducing the policy, but there would also be spill-over benefits for other states. In particular, the co-ordinated introduction of trading and liberalisation across Europe is likely to encourage innovation by giving ready access to radio spectrum for new applications on a pan-European scale.
“Without measures to promote trading and liberalisation, innovative activity may move outside Europe to other trading blocks where the spectrum needed to gain access to large markets can be obtained more quickly,” warns Amit Nagpal. “ This might cause delays in the introduction of new services in Europe, causing substantial losses in economic welfare for European citizens.”
The study team also identified certain aspects of the frameworks for spectrum trading that would benefit from a co-ordinated approach across Europe, in order to promote efficiency (especially innovation), and minimise the cost of implementation and trading. These aspects include, for example, elements of the specification of spectrum usage rights and obligations, the minimum set of information that parties to a spectrum trade must disclose, and approaches to the protection of competition.
Co-ordination of these aspects of trading and liberalisation across Europe would not reduce the ability of Member States to take account of local circumstances. Even if European countries had similar frameworks for spectrum trading, this does not necessarily entail similar outcomes in terms of the assignment and use of spectrum, if there are local variations in demand.
The objectives of the study were to identify the options available to Member States for implementing spectrum trading and consider whether there would be benefits from co-ordinating the approaches taken by countries across Europe. The study also included an extensive awareness-raising and consultation process with spectrum management authorities, spectrum users and other stakeholders. Trading refers to the transfer of spectrum usage rights between parties in a secondary market and liberalisation refers to the relaxation of restrictions on the services and technologies associated with spectrum usage rights.
The full report, and a short summary of its findings, can be downloaded from the Commission’s website at the following address. It is also possible to register for an EC workshop on 15 July, where the study team will present their conclusions.
Further information on the project can also be obtained from www.analysys.com/spectrumtrading or by contacting the study team at email@example.com or +44 20 7061 3700.
The report has four parts:
* Part A: Access to radio spectrum and role of secondary trading provides an introduction to spectrum trading for those not already familiar with this topic.
* Part B: Implementation of spectrum trading examines the areas in which Member States introducing spectrum trading will need to develop policies and frameworks. It goes on to identify the range of options open to Member States.
* Part C: Member State frameworks and stakeholder perspectives discusses the current plans of Member States in respect of introducing spectrum trading, and describes the views of different spectrum stakeholders as expressed during the consultation process.
* Part D: The Community dimension discusses the case for co-ordination of spectrum trading frameworks across Europe and presents the study’s recommendations to the European Commission.
Notes for Editors:
1. Rights to use a given radio frequency are generally assigned to organisations/ individuals on a ‘first-come, first-served’ basis. The principal exception is when the relevant spectrum bands are considered a scarce resource, in which case licences are often awarded to a limited number of organisations following a ‘beauty contest’ or auction (as with mobile phone licences). Previously, the transfer of spectrum rights has been restricted. Under the new EC Framework, however, Member States may make provision for undertakings to transfer the rights to use radio frequencies with other undertakings. If secondary trading of radio spectrum is allowed by Member States it will be easier for licensees to transfer rights to other users. There is increasing pressure from the industry for governments to allow the creation of secondary markets for the trading of spectrum (e.g. to allow the sale of 3G spectrum rights).
2. Analysys Consulting Ltd (www.analysys.com) is a leading European telecommunications consultancy, providing support and insight to regulators, operators, manufacturers and users of radio spectrum.
3. DotEcon Ltd (www.dotecon.com) is an economic consultancy, advising private companies and the public sector on regulation, competition policy, public policy issues, licensing, auctions and business strategy. DotEcon focuses on network industries and applies leading edge economics to the challenges faced by firms and policymakers.
4. Hogan & Hartson LLP (www.hhlaw.com) advises on legal issues affecting specific trade sectors and government affairs. Its Brussels office leads the firm’s focus on the legal and regulatory matters relevant to this study.
5. The total value of the contract for the study was EUR398 550.
6. The views expressed in this release, and in the report, are those of Analysys Consulting Ltd, DotEcon Ltd and Hogan & Hartson LLP alone and do not necessarily represent the views or position of the European Commission.
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