practical aspects of liberalisation and re-farming of spectrum international telecommunication union...
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Practical aspects of liberalisation andre-farming of spectrum
International Telecommunication UnionTelecommunications Development Bureau
ITU Regional Workshop on Efficiency of theFrequency Spectrum Use in the Arab Region
Amman-Jordan, 5-7 Dec. 2011
Dr. Arturas MedeisisITU-BDT Spectrum Management Expert
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Scope of presentation • What is flexibility and liberalisation in SM
• The balancing act of liberal SM
• Spectrum trading as part of liberalisation
• What is re-farming
• Means and ways of re-farming
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The terms• Flexibility means possibility of changing the
purpose for which the assigned spectrum is used by licence owner
• Liberalisation of SM means providing possibility of liberal exchange of spectrum holdings– unrestricted spectrum trading of flexibly defined
spectrum assignments is the best example
• Hence, flexibility can be realised without liberalisation, whereas liberalisation is seldom meaningful without flexible spectrum usage right
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Flexible vs. harmonised
Degree of
harmonisation
HighLow
High
Low
Medium
Medium
Full harmonisation (e.g. 2G/IMT bands)
Partial flexibility (e.g. PMR, SRD bands)
Full flexibility (e.g. 2.4 GHz band, other commons)
Degree of
flexibilitySource: ECC Report 80
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Market scenarios
Lowflexibility
Highflexibility
High flexibility
Low flexibility
Market dimension
Technology
dimension
Prescriptive conditions
Technical flexibility
Marketapproach
Liberalisedmarket
High flexibility
Low flexibility
High flexibility
Low flexibilitySource: ECC Report 80
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Spectrum trading
1st owner 3rd owner
2nd owner
Regulator
Traditional spectrummanagement
1st owner 3rd owner
2nd owner
RegulatorNote Note
Note
Spectrum trading
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Making the market work
• Well-defined tradeable spectrum units
• Change of use allowed
• Liberal and simple conditions for trade
• Long-term confidence in acquired assets
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Long term economic impact?• Results of scenario modelling of
introducing spectrum liberalisation compared with harmonised base-case
*) UMTS Forum study: Thriving in Harmony. Frequency harmonisation: the better choice for Europe, November 2006, available at: www.umts-forum.org
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Liberalisation conclusions• The liberal flexibility in itself is a two-sided sword
and therefore should not be seen as universal one-fit-all solution
• The optimum is likely to be achieved through balancing act:– Combination of liberalisation and flexibility with certain
degree of harmonisation– E.g. liberalisation and flexibility at a technical level
(license conditions) but harmonisation (regional, global) in general spectrum use trajectory, which would lead to positive mass-market effects
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What is re-farming• A tool, a process:
– used by the NRA’s spectrum management policy and frequency planning functions,
– whenever it becomes necessary to change the current use of spectrum, including recovering spectrum from existing users for the purpose of re-assignment
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Types of re-farming
Service level:
- refarming process
Fixed Mobile
Applications level:
P-P links PMP links PMR Cellular
Technical level:
2G 3G
12.5 kHz25 kHzDigitalAnalogue
See ECC Report 16
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Implementing re-farming• Two steps:
– deciding on necessity of re-farming– organising the process, choice of instrument
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Implementing re-farming (II)Administratively managed re-farming Re-farming through spectrum trading (*)
Tri
gger
ing
con
sid
erat
ion
s
Legal criteria
Financial criteria
Political criteria
Socio-economic criteria
Technical and efficiency criteria
Overall analysis performed and decision taken by NRA
Choosing instrument of re-farming
Business criteria
Financial criteria
Analysis performed and decision taken by spectrum owner (**)
Revoking licence with compensation
Incentive pricing of spectrum use
Licence termination upon its expiry
Voluntary withdrawal
Equipment re-tuning
Combination / other tools
Contract between private entities (**)
* - presuming existence of flexible spectrum use clause** - may be subject to approval by the administration (NRA) See ECC Report 16
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Compensation options• New user pays: compensation arrangement is
made between the incumbent and new user, usually with mediating role of administration
• Government pays: compensation to be paid directly from state budget or from NRA income derived from spectrum licensing fees
• National re-farming fund established: NRA administers a fund created either from the payments by new operators, from licence fees or from the state budget. This fund could be then used for paying compensations for network re-deployment, financial incentives to accelerate re-farming processes, etc.
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Fund: French case study• Managed by ANFR• Strictly separated from agency budget• Ministry of Finance provided initial
instalment• ANFR first pays the re-location costs to
incumbent• New users pay to the fund upon receiving
authorisations, i.e. already after completion of re-location of incumbent
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Fund: French case study (II)• ANFR functions:
– proposes schedule– evaluates cost components– supervises carrying out of the process– controls the funds, administers payments
• Fund active since 1998, initial seed from the state budget: 3 M€
• Fund’s net capital ultimo 2010: 27.3 M€• Practical details in ITU-R Rec. SM.1603
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Re-farming results in France
Source: ANFR
New system Spectrum amount Former incumbent
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Conclusions• Spectrum use liberalisation is normally
intrinsically linked with allowing flexible spectrum use and secondary trading – the practical implementation of these principles and mechanisms would help the more efficient, market-driven use of spectrum
• Re-farming is additional tool that may assist to resolve collision with obsolete uses, make way for innovative services
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Thank youand farewell!
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