Documents considered by the Committee on Wednesday 16 March 2016 Contents

2Digital Single Market: Use of the 470–790MHz Radio Spectrum band

Summary and Committee’s conclusions

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Innovation and Skills Committee and the Culture, Media and Sport Committee

Document details

Proposal for a Decision on the use of the 470–790 MHz frequency band in the Union.

Legal base

114 TFEU; ordinary legislative procedure; QMV

Department

Culture, Media and Sport

Document Number

(37504), 5814/16 + ADDs 1–2, COM(16) 43

2.1Radio spectrum, an enabler of ‘connectivity’, is a finite, natural resource. Given increasing demand for wireless devices, the efficient allocation and use of spectrum is considered critically important for the growth of the digital economy.

2.2In February 2015, the Commission published a draft Decision on the use of the ultra-high frequency (UHF) broadcasting band (470–790MHz) in the EU, as part of its Digital Single Market (DSM) Strategy.

2.3The draft Decision proposes harmonising measures for the use and management of spectrum in this UHF band along the following ‘split’:

2.4The Commission considers that the draft Decision respects the principles of subsidiarity and proportionality, on the basis that it is a) proposing EU co-ordination to ensure EU level spectrum policy objectives are met (that support the development of a DSM) and b) giving Member States flexibility to act according to specific national situations at the lower UHF band.

2.5The Minister for Culture and the Digital Economy (Mr Edward Vaizey) supports harmonising legislation at the 700MHz band in principle, as the timely and coordinated change of use from DTT to mobile broadband services may be beneficial for the EU. However, he raises concerns about the details of the proposal, particularly on the timescales for achieving clearance (by mid-2020) and the coverage obligations (ensuring speeds of 30Mb/s). The Minister expresses doubts about the need for action at the sub-700 MHz level. Despite providing Member States certain flexibility of use in this band, the Minister considers that the Commission’s proposal would, as drafted, have the effect of making the Government’s TV ‘White Spaces’ initiative (which allows disused TV spectrum to be used for other innovative purposes) impossible to continue (as it requires bi-directional transmission). The Government considers the Commission’s impact assessment “not sufficient to validate all the specifics” of the draft Decision.

2.6The Committee notes that the Government welcomes (at least in principle) parts of the proposal, but raises strong concerns in other areas. In order to assess the Minister’s priorities in this area and the extent to which UK interests are being reflected during the negotiations, we would be grateful for the following information:

Government priorities and influence

Expected timetable and wider implications

2.7Pending the information requested and comprehensive progress updates on the negotiations, we retain this draft Decision under scrutiny and draw it to the attention the Business, Innovation and Skills Committee and the Culture, Media and Sport Committee.

Full details of the documents

Proposal for a Decision on the use of the 470–790 MHz frequency band in the Union: (37504), 5814/16 + ADDs 1–2, COM(16) 43.

Background

Radio Spectrum and its current uses at the 700Mhz and sub-700Mhz bands

2.8Radio spectrum refers to a specific range of frequencies of electromagnetic energy that is used to communicate information. The range from 400 MHz to 4 GHz is particularly prized. Radio spectrum use must be managed to avoid interference between services using the same radio frequencies. Radio and television broadcasting, civil aviation, satellites, defence and emergency services depend on specific allocations of radio frequency.

2.9The demand for spectrum has increased dramatically in recent years and is expected to grow further, driven by growing quantities of data transmitted over the internet and rapidly increasing numbers of wireless devices.

2.10At present, the frequency band from 470–790MHz (UHF band) is used mainly for DTT.

2.11The sub-700Mhz band is used for unidirectional transmission throughout mainland Europe. The UK, however, has recently started to allow disused bits of radio spectrum in this bandwidth (TV ‘white space’) to be used for bi-directional transmission for various innovative purposes. Although this UK initiative is still at an experimental stage, it is an attempt to foster innovation in 5G technologies.

Regulatory framework

2.12Radio spectrum is managed by a complex set of international, regional and national authorities.

Global governance

2.13An international standards body called the International Telecommunications Union (ITU) is responsible for supporting the development of telecommunications at global level. The ITU’s World Radio communication Conference (WRC) is the forum through which the Radio Regulations that codify cross-border aspects of the use of the radio spectrum are modified.

2.14At the most recent World Radiocommunication Conference in November 2015, (WRC-15), the 700 MHz band was allocated to mobile services globally.

EU regulatory framework and developments

2.15Within the EU, the Member States have primary responsibility for the allocation and management of radio spectrum. However, this is an area of shared competence in which the Commission also has responsibilities. While the Commission does not manage radio spectrum directly, its task is to ensure that the use and management of radio spectrum in the EU takes into account all relevant EU policies (including the functioning of the internal market). The Commission should therefore address specific goals that can only be achieved at EU level.

2.16In 2002, the Council and European Parliament approved:

2.17In 2012, the European Parliament and Council approved Decision 243/2012, establishing a multiannual radio spectrum policy programme (RSPP), which developed key policy objectives and general principles for the strategic management and harmonisation of use of radio spectrum in the internal market. Its objectives include:

2.18In 2013, the European Commission proposed legislation on electronic communications,9 which included measures for greater coordination in spectrum management in the EU. However, this has stalled in the face of opposition within the Council.

2.19In 2014, the Commission asked for the former Director-General of the WTO, Pascal Lamy, to produce a report on the future of radio spectrum use (the “Lamy report”). It took account of the views of industry and policymakers, and sought to identify the best way to meet the objectives of the digital agenda and growing demand for mobile data while also giving broadcasters incentives to invest. The Lamy report recommended that:

UK

2.20In the UK, Ofcom manages radio spectrum allocation and assignment, and also represents the UK in some international spectrum forums, including the WRC. Ofcom represents the UK on the RSPG.

Radio spectrum and the Digital Single Market

2.21The Commission believes that effective radio spectrum management is essential in order to ensure a ‘connected’ single market for ICT services and wireless equipment.

Digital Agenda for Europe

2.22In September 2010, the Commission published the Communication ‘A Digital Agenda for Europe’. It envisaged 100 follow-up actions in seven priority areas:

Digital Single Market Strategy

2.23The President of the Commission, Jean-Claude Juncker, identified the creation of a DSM as a top priority for the current Commission. In May 2015, the Commission published a Communication setting out a strategy for achieving a DSM. It indicated that it would make specific proposals regarding the co-ordinated release of the 700 MHz band, which is particularly well-suited for ensuring the provision of broadband services in rural areas, while accommodating the specific needs of audiovisual media distribution. It noted that the proposed action would be based on the recommendations of the Lamy report, the RSPG Opinion on a long-term strategy on the future use of the UHF broadcasting band, and the EU’s preparatory work for WRC-15 (see above for further details). This proposal was to be scheduled in advance of a wider review of the telecoms regulatory framework, which would look at broader spectrum issues.

The Government’s response to the Commission’s electronic communications public consultation

2.24In its detailed response to the Commission’s consultation on the electronic communications regulatory framework, the Government pointed out the high degree of commonality of approach to 700MHz spectrum, not only between EU member states but across the world, had been achieved without EU harmonisation measures, and stated that it favours greater regulatory cooperation over harmonisation.

The draft Decision

2.25The draft Decision seeks to implement many of the recommendations of the Lamy report.

Key Provisions

The draft Decision comprises only eight Articles. A summary of the key provisions is set out below:

The Commission’s subsidiarity assessment

2.26As this is a policy area of shared competence, the principle of subsidiarity applies. In its explanatory memorandum and supporting impact assessment, the Commission sets out the case for action at an EU level at length. It considers its proposed measures are consistent with Radio Spectrum Decision (676/2002), which created a common policy framework and established that policy should be coordinated and, where appropriate, harmonised at Community level.

2.27 The Commissions considers that legislation to ensure co-ordinated designation and authorisation of the 700MHz band is necessary to guard against divergent national approaches, limit interference across borders and boost EU growth. It notes that:

2.28Regarding the requirement to ensure EU-wide connectivity at 30 Mb/s, the Commission points to the inclusion of this target in the Digital Agenda for Europe. It also justifies the 30 Mb/s target and timetables for the clearing of the 700 MHz band as necessary to tackle the digital divide between urban and rural areas and provide the infrastructure necessary to support the next generation of ‘internet of things’ technologies (such as driverless cars, which require improved internet connectivity on roads).

2.29It also considers that there is a need for a coordinated designation of the sub-700MHz band for flexible use to safeguard the provision of audiovisual media services to a mass audience, whether on tablets and smartphones or via DTT, and for investments into more efficient technologies in order to vacate the current use of the 700MHz band by DTT.

The Minister’s Explanatory Memorandum of 2 March 2016

Policy implications and subsidiarity assessment

Spectrum allocation and management

2.30The Minister notes that the allocation and management of radio spectrum remains principally the responsibility of Member States, but that the EU may coordinate use of radio spectrum between Member States for internal market reasons. He also notes that in some instances the exercise of competence in international spectrum coordination remains an ongoing source of dispute:

“Radio spectrum use must be managed to avoid interference between services using the same radio frequencies in the same place. This is principally the responsibility of Member States within their own borders, and of international multilateral coordination to prevent interference across national borders through the International Telecommunications Union (ITU), a UN body. However, for internal market reasons the EU often seeks to coordinate use of radio spectrum between member states.

“There is ongoing litigation about the relationship that Member States should have with the EU in the context of international spectrum coordination through the ITU, in particular the tri/quadrennial World Radiocommunication Conference (WRC) — the most recent of which was held in November 2015.”

700 Mhz band

2.31Regarding the proposed coordination of the 700 MHz band, the Minister notes global agreement to allocate the 700Mhz band to mobile services at the recent WRC-15:

“The 700 MHz band was allocated to mobile services globally at the most recent WRC, WRC-15, in November 2015. As such, all stakeholders expect the spectrum to be used for mobile in the near future, and most stakeholder questions revolve around timing and who will pay for what costs associated with the change. Most if not all Member States would agree that coordination at 700 MHz (whether by harmonisation or otherwise) was of itself a good thing. However, views on sub-700 MHz spectrum vary: broadcasters and wireless microphone users are keen to retain this, but mobile operators see an opportunity for further spectrum gains in future.”

2.32While there is global agreement to clear the 700Mhz band for mobile use, the Minister notes that the “Government agrees that it is important to bring it into use across the EU in a timely way” and considers EU action may be necessary and bring EU-wide benefits:

“The European Commission identifies that there are benefits from a coordinated change of use of the 700 MHz spectrum from TV and wireless microphone (PMSE) services to mobile broadband services in the EU. In principle, appropriate harmonising legislation might help achieve those benefits.”

“EU action could make it easier for Member States to deploy services in the spectrum by setting an achievable timescale for removal of potentially interfering TV services, could bring forward the delivery of mobile data services in some Member States, and hence could lead to mobile data at 700 Mhz being available sooner across a wider range of Member States on the same device.”

2.33However, the Minister qualifies this by noting that it “wishes to consider further the specific parameters of the proposal”, particularly the timescale (proposed clearance of the 700 Mhz band by June 2020) and the coverage obligations (of 30 Mb/s both indoors and outdoors by 2020).

2.34On timescale, the Minister notes the following:

“The most immediate impacts on the UK would be on the timetable for clearing the 700 MHz band [Article 1]. Work has already begun on this and the Government has committed up to £600m to the clearance programme in the recent Spending Review.

“700 MHz clearance will require extensive work to TV broadcasting apparatus which can only be undertaken in fair weather, so there is currently real uncertainty as to what realistic deadline could be set for it. Ofcom and TV broadcasters are currently working to develop a plan for the earliest possible clearance.

“It is not impossible that the UK could achieve clearance by the proposed June 2020 deadline, but at this stage it would not be possible to be confident of doing so. Some other Member States such as France and Germany are well placed to meet a June 2020 deadline; others are likely to find a June 2020 deadline challenging.”

2.35On the coverage obligations (of 30 Mb/s by 2020), the Minister considers that implementation raises both practical and financial concerns:

“The coverage obligation in the draft Decision [Article 3] is both highly specific (e.g. speeds of at least 30 Mb/s, both indoors and outdoors — a very challenging outcome to achieve) and somewhat ambiguous (e.g. “a high-quality level” of coverage). When it would take effect is also unclear. As a result, the obligation, as proposed, would be very difficult to be sure of meeting.

“The obligation is justified by the Commission as tackling the digital divide and supporting internet of things (IoT) applications. Whether it would do so in practice is open to debate. The standards for 5G mobile are still under development; these will affect the practicality or otherwise of IoT services in the band. The case for mobile operators investing in the spectrum and in a network would be weakened by excessive coverage obligations.

“More broadly the Government believes that Article 3 in its current form could hinder Member States’ ability to set coverage obligations that are appropriate to their particular geographies and circumstances. Constraining Ofcom’s flexibility to set appropriate licence terms may also have economic and financial implications for the UK as it could lead to the spectrum being less well used and hence less economically valuable.”

2.36The Government expresses concern that the Commission’s impact assessment does not adequately consider these aspects of the proposal.

Sub-700 Mhz band

2.37Regarding the proposed coordination of the sub-700 MHz band, the Minister considers “the case for coordinated EU action on the given timescale is less clear”. In particular, the Minister questions whether EU action is necessary to restrict services in the band to “downlink only”.

2.38The Government expresses strong concerns about bi-directional transmission being excluded from the sub-700Mhz band:

“Allowing downlink-only technologies in the lower UHF band would end the UK’s use of White Space devices in the band — small, low power devices which could potentially include Internet of Things applications that both need to send and to receive data. It would therefore harm innovation and the efficient use of spectrum.”

Impact Assessment

2.39The Commission’s impact assessment considers four different policy approaches, and concludes that option three — the proposed approach — best satisfies the Commission’s policy objectives while minimising negative impacts.

2.40The Minister considers that the Commission’s impact assessment “is not sufficient to validate all the specifics of the proposed decision”, as set out below:

“The Commission have produced an impact assessment (5814/16 ADD 2) accompanying the Proposal for a Decision on the use of the 470–790 MHz frequency band. The Government notes a number of points on which this impact assessment could be improved.

“The impact assessment refers to a decision within the UK that the 700MHz band will be auctioned in 2018. Neither Ofcom nor HMG have made a decision on the timescales of any auction of the 700MHz band, although Ofcom on 25 February 2016 (after the publication of this draft Decision) indicated that it expects to conduct an auction in late 2018 or in 2019.

“The impact assessment does not provide any assessment on whether a clearance date of 30 June 2020 is technically, politically or legally feasible for many countries in the European Union.

“The impact assessment states that countries will need to upgrade transmission technology in order for DTT to provide the same levels of service and coverage. The UK has assessed this issue and, as stated by Ofcom in both their consultation published in May 2014 and their statement published in November 2014, upgrading transmission technology is not necessary for DTT to provide comparable levels of service and coverage following clearance of the 700MHz band as not all existing capacity is used on a permanent basis.

“However, the UK also faces significant costs in upgrading transmission apparatus (in particular, the antennae used for TV broadcasting). The Commission’s impact assessment states that, without upgrading transmission technology, the cost of clearance of the 700MHz band will be €182m — €245m EU-wide. The Government has allocated up to £600m to cover the costs of clearance, i.e. up to circa €750m in the UK alone.”

Expected timetable

2.41Negotiations are currently progressing at Working Group level. The Minister considers a General Approach before the summer likely:

“The Council Telecoms Working Group is considering the draft measure. The Working Group has had two meetings since the decision was published; both of those have been focussing on the detail within the Impact Assessment. Several Member States have expressed concerns similar to those noted above under ‘impact assessment’.

“The EP’s European Economic and Social Committee and the Committee of the Regions are expected to be involved.

“The further timetable for the progress of negotiations is currently unknown but we expect the proposal to be included in a Council agenda before summer 2016, perhaps as soon as May 2016.”

Previous Committee Reports

None.

8 See para 5.8 of Report chapter on Broadband Development in Europe, 27 October 2010.

9 Proposal for a Regulation laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent.




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Prepared 22 March 2016