Implementing Spectrum Trading

Implementing Spectrum Trading

Key Issues

Nimisha Tailor

Key Issues Key Issues

• How should licences be defined?• Is there sufficient public information to

facilitate trading?• How should anti-competitive behaviour

be deterred?• How should trading start and how

should it continue?

Property RightsProperty Rights

• To prevent interference between radio users, need to define tradeable property rights

• Consultation document suggested:– Licences traded as currently configured– Geographical and technical boundaries could be

fixed or negotiated between market participants– Spectrum could be packaged into units

Property RightsProperty Rights

• Issues to consider when defining licences:

– Duration of licence– Frequency– Type of use– Geography– Reconfiguration– Lease (transfer) or buy/sell spectrum– Annual fees on traded licences

Trading MechanismTrading Mechanism

• Public information should be made available to:

– Identify potential buyers and sellers (not necessarily names)

– Bring buyers and sellers together to trade

– Provide regulatory certainty

Trading MechanismTrading Mechanism

• What type of published information would facilitate trading?

• Government could provide ‘basic’ information

• ‘Additional’ information could be provided by the market e.g brokers, consultants

Trading MechanismTrading Mechanism

Trades could be executed by:

•Central Exchange

•Bilateral Trading

•Intermediaries e.g ‘spectrum brokers’

Competition PolicyCompetition Policy

• Trading could increase competition. However need to deter hoarding of spectrum for anti-competitive reasons

• Ex ante (before the event) vs ex post-(after the event) competition policy

• Ofcom will have concurrent powers with Office of Fair Trading

Introduction of TradingIntroduction of Trading

Proposals to start trading include:– Simple introduction– Comparative selection– Fee to participate in trading– Auctions

•Suitable for vacant spectrum•Overlay auction for encumbered

spectrum