International Telecommunication Union
Telecommunications Development Bureau
Practical aspects of liberalisation and
re-farming of spectrum
Dr. Arturas Medeisis
ITU-BDT Spectrum Management Expert
ITU Regional Workshop on Efficiency of the
Frequency Spectrum Use in the Arab Region
Amman-Jordan, 5-7 Dec. 2011
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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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Flexible vs. harmonised
Degree of
harmonisation
High
Full harmonisation (e.g. 2G/IMT bands)
Low
Medium
Medium
Low
High
Partial flexibility (e.g. PMR, SRD bands)
Full flexibility (e.g. 2.4 GHz band, other
commons)
Degree of
flexibility
ITU Regional Workshop, Amman, 5-7 Dec 2011
Source: ECC Report 80
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Market scenarios
High flexibility
High
flexibility
Low
Low
flexibility
flexibility
Technology
Technical
flexibility
Market
dimension
dimension
Prescriptive
conditions
Liberalised
market
High
High
flexibility
flexibility
Market
approach
Low flexibility
Low flexibility
ITU Regional Workshop, Amman, 5-7 Dec 2011
Source: ECC Report 80
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Spectrum trading
1st owner
3rd owner
Regulator
2nd owner
2nd owner
Note
Note
Regulator
Traditional spectrum
management
Note
1st owner
3rd owner
Spectrum trading
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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Types of re-farming
Applications
level:
Mobile
Fixed
Service level:
P-P links
PMP links
PMR
Cellular
2G
Technical
level:
Analogue
Digital
25 kHz
3G
12.5 kHz
- refarming process
See ECC Report 16
ITU Regional Workshop, Amman, 5-7 Dec 2011
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Implementing re-farming
• Two steps:
– deciding on necessity of re-farming
– organising the process, choice of instrument
ITU Regional Workshop, Amman, 5-7 Dec 2011
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Implementing re-farming (II)
Triggering considerations
Legal criteria
Choosing instrument of
re-farming
Administratively managed re-farming
Incentive pricing of spectrum use
Re-farming through spectrum trading (*)
Financial criteria
Political criteria
Socio-economic criteria
Technical and efficiency criteria
Overall analysis performed and
decision taken by NRA
Business criteria
Financial criteria
Analysis performed and decision taken by
spectrum owner (**)
Licence termination upon its expiry
Voluntary withdrawal
Contract between private entities (**)
Revoking licence with compensation
Equipment re-tuning
Combination / other tools
* - presuming existence of flexible spectrum use clause
** - may be subject to approval by the administration (NRA)
ITU Regional Workshop, Amman, 5-7 Dec 2011
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 redeployment, financial incentives to accelerate
re-farming processes, etc.
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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Re-farming results in France
New system
Spectrum amount
Former incumbent
Source: ANFR
ITU Regional Workshop, Amman, 5-7 Dec 2011
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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
ITU Regional Workshop, Amman, 5-7 Dec 2011
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Thank you
and farewell!
ITU: Committed
to connecting
ITU Regional Workshop,
Amman, 5-7 Decthe
2011World
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