Joint Committee on the Draft Communications Bill Minutes of Evidence

Memorandum submitted by the Radiocommunications Agency


  I am grateful for the opportunity to submit this brief note to the Committee on spectrum management and OFCOM.

The Agency and Spectrum Management

  Convergence of digital telecommunications, broadcasting and computing is driving a fundamental revolution in the way we live, work and are entertained. This technical and market convergence is the rationale for creating a unified Office of Communications—OFCOM—and depends in large measure on radiocommunications. Radio is the only medium that can provide true mobile communications and also enables networks to be rolled out quickly and cost-effectively.

  The radio spectrum is a resource of considerable, and growing economic importance. The consumer and business benefits derived from spectrum have been conservatively estimated to be over £20 billion a year. Spectrum is a key raw material for the communications revolution. But it is also a finite resource that is under growing pressure from increasing demand. Despite market turbulence, demand for spectrum shows no sign of slackening, especially in the restricted frequency range that can be used for mobile communications.

  Effective spectrum management underpins future success and growth in the communications sector. Unless spectrum can be made available to meet demand, innovation and competition will be held back and businesses and consumers will be worse off. Making spectrum available at a time when convergence is causing rapid and unpredictable change poses a severe challenge.

The Wide Range of Spectrum Users

  The Agency has developed new approaches to spectrum management to meet that challenge in the interests of all users. Spectrum is used not only by public telecommunications operators and broadcasters but also by a long list of others throughout the private and public sectors. These include small businesses with self-provided systems, the armed forces and emergency services, radio astronomers and radio amateurs. We have over 220,000 licensees, the great majority of whom are neither telecommunications companies nor broadcasters.

  We work closely with a range of Government departments, some of which have spectrum management responsibilities of their own, and, with the Ministry of Defence, co-chair the official Cabinet committee that considers and coordinates national spectrum policy.

The Complexity of Spectrum Management

  Spectrum management is a complex task that involves a number of related functions.

  Radio waves do not stop at frontiers so there is a need for international negotiation and coordination. This strong international dimension makes us unique in OFCOM. We have a reputation as one of the leading spectrum managers in the world, which enables us effectively to promote and protect UK interests.

  We also plan the spectrum in terms of deciding which frequencies should be used for which applications—known as "allocation"—and assigning those frequencies to individual users in a way that provides incentives to use the finite spectrum resource as efficiently as possible. To do this, we use a range of techniques, including regulation, administrative incentive pricing and auctions. Spectrum management is no longer a purely technical or regulatory activity but increasingly involves economic analysis and greater use of market forces to complement regulation.

  Finally, we "keep the spectrum clean" of interference and illegal transmissions.

  These functions have a high degree of synergy. For example, our national network of local offices, which deals with interference and enforcement, also issues licences.

The Independent Review

  The Agency has, since 1998, introduced far-reaching reforms in the way the radio spectrum is managed. We have, for example, applied administrative incentive pricing and auctions to give incentives to use spectrum more efficiently and plan to introduce spectrum trading, subject to the passage of the Bill. The independent review of radio spectrum management was commissioned to consider what more needs to be done.

  Its report, published in March, broadly endorses the policies that have been pursued following the reforms introduced by the Wireless Telegraphy Act 1998 and makes a series of recommendations for extending and developing them. The Government has welcomed publication of the report and plans to issue its response in the summer. The spectrum provisions of the draft Bill may be revised in the light of that response. Any changes to the draft Bill will be brought forward as soon as possible.

The draft Communications Bill

  In addition to transferring to OFCOM virtually all the Secretary of State's functions under the Wireless Telegraphy Acts and associated legislation, the draft Bill includes a number of other provisions on spectrum management. Their purpose is to enhance OFCOM's ability to manage the radio spectrum effectively, to implement the new EC Directives on electronic communications and to improve OFCOM's powers to keep the spectrum clear of interference. They are described in the Explanatory Notes and Policy statement accompanying the draft Bill.

  Radio spectrum is at the heart of the communications revolution. Putting spectrum management at the heart of OFCOM will provide a more effective regulatory regime and create conditions conducive to the success of the communications sector, which is so important to future prosperity and social goals. I look forward to OFCOM continuing and building on the Agency's achievements in managing the radio spectrum to foster a successful and competitive economy and enhance quality of life.

22 May 2002

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