1 Introduction |
What is spectrum?
1. The "spectrum" referred to in this
Report is the part of the electromagnetic spectrum which is usable
for radio wave transmissions, and is also referred to as "the
radio spectrum". It is made up of a range of radio frequencies,
from extremely low (3 hertz (Hz)) to extremely high (300 gigahertz
(GHz)). Television, radio, mobile phones, mobile internet services
and other wireless devices such as radio microphones all rely
on being able to use sections, or "channels", of the
spectrum in order to function. Spectrum is a finite resource and,
if usage of it becomes too concentrated, users will experience
interference and interruptions to the service.
2. Spectrum is measured in bands of megahertz
(MHz). The term "bandwidth" refers to the range of frequencies
in a particular band. Spectrum has different properties depending
on its frequency. Low frequencies travel much further than high
frequencies and so are useful for covering rural areas, although
they cannot carry as much information. Higher frequencies do not
travel as far, but are more suitable for areas of high usage such
3. The spectrum between the frequencies of 300
MHz and 3 GHz, which lies somewhere in the middle of the usable
spectrum range identified above, is known as the "sweet-spot"
because of its suitability for a variety of applications including
mobile communications and broadband. It is also internationally
harmonised for mobile service use, meaning mobile users on a network
using this spectrum have uninterrupted coverage when crossing
international borders. Spectrum use across the bandwidths is
shown in the chart below:
How spectrum is allocated and
4. 50% of spectrum holdings is currently allocated
for use by public sector bodies, for example for defence, aviation,
shipping and the emergency services. In using this spectrum they
are subject to inter-locking international regulatory frameworks
set by, among others, the International Telecommunications Union
and the Conference of Postal and Telecommunications Administrations.
5. Overall UK spectrum allocation is shown in
the chart below:
6. Commercial spectrum holdings are allocated
and managed under a separate regulatory regime, made necessary
by the existence of so many competing uses and users. Policy responsibility
for this specialism was transferred from the Department for Business,
Innovation and Skills (BIS) to the Department for Culture, Media
and Sport (DCMS) in January 2011, although DCMS does not manage
commercial spectrum directly. Subject to a power of direction
by the Secretary of State, the allocation and regulation of spectrum
is the responsibility of Ofcom, the independent regulator and
competition authority for the UK communications industry.
7. The allocation of spectrum is managed by means
of licences. Prior to 1998, the then regulator issued licences
for specific technologies and purposes on the basis of an assessment
of their social and economic usefulness. This was very much a
"command and control" model, whereby the regulator managed
all spectrum usage. Licences issued under this regime were subject
to fees to cover administrative costs only. The Wireless Telegraphy
Act 1998 enabled the conduct of auctions as a means to grant licences.
The first auction took place in 2000 and, since its formation
under the Communications Act 2003, oversight of the auctions has
passed to Ofcom. It acts as the competition authority and conducts
assessments to ensure that the auctions themselves do not distort
the market. Ofcom's approach has been gradually to liberalise
spectrum allocation, removing auction and licence constraints
wherever possible and allowing the market greater freedom to determine
spectrum usage rather than determining usage itself.
8. Ofcom's principal duties as set out in the
Communications Act 2003 are to "further the interests of
citizens and consumers and to secure the optimal use of spectrum".
Ofcom does not have a statutory obligation to secure the greatest
financial return from spectrum auctions but notes that "we
believe that a well-designed competitive auction is very likely
to achieve value for money for tax payers".
9. As well as allocating spectrum through auctions,
Ofcom also regulates the use of spectrum by the commercial sector.
It identifies cases of interference (two or more users of the
same part of the spectrum disrupting one another); illegal broadcasting
(such as pirate radio); poor use of transmission equipment (such
as unfiltered taxi-cab radios); and unlicensed wireless devices,
and it has powers to take action in such cases. Ofcom also co-ordinates
international agreements for spectrum use with neighbouring countries.
1 Communications Act 2003, section 152 Back
SP16 Ofcom written evidence Back