Promoting the shared use of radio spectrum resources in the internal market

03 September 2012
by eub2 -- last modified 04 September 2012

In its Communication on "Promoting the shared use of radio spectrum resources in the internal market", published on 3 September, the European Commission pushes and supports EU Member States to move to an enhanced innovation-friendly internal market framework for the shared use of spectrum. Meeting the growing spectrum needs resulting from the exponential growth in wireless data traffic and the increasing importance of wireless connectivity in the economy, is limited by the absence of vacant spectrum. However, says the Commission, the radio spectrum is a unique resource that can be re-used more efficiently with advances in technologies. This makes additional spectrum resources available and lowers the spectrum access hurdles for new users. To cope with the demand and to attract investments into new technologies, the EU needs a supportive regulatory framework that enables legally binding spectrum sharing contracts between users to encourage wireless innovation in the internal market.

What is being proposed to foster wireless innovations?

Using economies of scale made possible by a common approach to encourage the shared use of the radio spectrum in the EU. This would work by identifying beneficial sharing opportunities (BSO) in spectrum bands and by enabling regulators to define shared spectrum access rights (SSAR) to create the necessary economic incentives. With these tools, spectrum access can be granted to innovators who deploy technologies that facilitate sharing. Innovators could use the information provided in the spectrum inventory to identify beneficial sharing opportunities (BSO) in both licensed and licence-exempt spectrum bands and apply for access. Regulators could encourage contracts between users, who would all have shared spectrum access rights. Incumbent spectrum holders could use their resources more efficiently by sharing them on a contractual basis.

Why is there a need to act now?

The radio spectrum is a finite resource – there is no vacant spectrum remaining, and the cost of re-allocating spectrum to new uses is high. On the other hand there is an exponential increase in the use of spectrum – for example driven by mobile computing devices, Wi-Fi hotspots but also smart electricity grids and industrial automation. This creates challenges for meeting the growing demand for spectrum.

However, thanks to advances in technology, it is now possible to share the spectrum more efficiently. Many new wireless technologies are designed to share bands in which no licence is required (licence-exempt bands), while others make additional spectrum resources available by, for example, providing wireless broadband services in between TV frequencies (the 'white spaces'). To maximise the benefits of spectrum sharing, regulatory barriers need to be removed and incentives provided. This requires new regulatory approaches to give different users the right to use a given frequency band on a shared basis.

Why is this EU initiative necessary, spectrum sharing is an old concept?

Indeed, spectrum sharing is a well established concept in some Member States at national level, but Europe needs to leverage the economies of scale of the internal market to stimulate wireless innovation. To cope with the growing demand for spectrum, we need the most advanced technologies to enable better and more sophisticated spectrum sharing. But we can only use the internal market to provide the necessary economic incentives, if we have an advanced and consistent regulatory environment for shared spectrum access across Europe.

The goal needs to be to maximise the societal benefits from next-generation radio technologies that can address the inference concerns of incumbent spectrum holders. A common approach for allowing spectrum sharing needs to provide regulatory guarantees and financial incentives for existing and future wireless technologies throughout the EU. Without this, the European market would be fragmented and lag behind in the use of wireless innovations.

What are the examples for shared use of spectrum and who will benefit?

Citizens and businesses rely on so called Wi-Fi networks which best exemplify the shared use of spectrum bands. More than 50% of all smartphone traffic appears to be routed over Wi-Fi networks, and this type of data traffic is growing 4-6 times faster than that on mobile networks. In addition, about 80% of new wireless technologies are today developed to operate in shared spectrum bands, including those for the "Internet of Things" as well as "Smart Grids". Sharing already takes place in some licensed bands also, such as the use of the "white spaces" between television channels for wireless microphones, but this policy seeks to introduce much more dynamic sharing in licensed as well as unlicensed bands.

Hence, consumers will benefit from access to more affordable wireless broadband services, greater use of wireless devices and new wireless services, as new incentives spur investment. Innovators developing wireless technologies will have access to parts of the spectrum on a shared basis that are currently used for other purposes and be able to benefit from economies of scale in the internal market. And existing spectrum users will have access, for example, to shared-spectrum bands to use for wireless broadband, to offer affordable wireless connectivity services and save costs in mobile networks.

Why would stakeholders be interested in sharing spectrum?

The main reasons are the economic incentives to use spectrum efficiently by getting more out of the same amount of spectrum wherever technology allows it. The proposed approach is firmly based on the need to provide economic incentives for innovators and incumbents alike.

For example public entities that are incumbent right holders could offer access to spectrum capacity to commercial operators in return for co-funding of network infrastructures, for example for broadband public protection and disaster relief (PPDR) applications. Commercial operators will be able to recoup investment costs by sharing spectrum in areas or at times of the day that their spectrum is underutilised. On the other hand, innovators who can compare sharing opportunities in a competitive internal market could use economic incentives to encourage incumbents to share spectrum, if they have an innovative technology that allows it. In order to reach the economies of scale that stimulate such innovations, the EU needs a common approach in the internal market to identify beneficial sharing opportunities across the entire radio spectrum.

Why would incumbent spectrum holders – such as mobile operators – be interested to share their spectrum, if they have paid significant sums to acquire exclusive spectrum licences?

Incumbent spectrum users that have an exclusive licence could be interested in sharing infrastructures to provide their services. This could stimulate investments in infrastructures in areas where demand for services is uncertain, and actually make it more attractive to invest. Operators could also join forces for acquiring shared spectrum licences to get additional spectrum resources. However, every time such a sharing arrangement is agreed between operators active in the same market, the authorities would have to take into account the conditions under which the licence was issued, in particular in regard to competition aspects.

Are there concrete proposals for more spectrum or what is the process?

This depends on the availability of technology. In the internal market beneficial sharing opportunities (BSO) can be identified, in both licensed and licence-exempt frequency bands, wherever the combined net socio-economic benefit of multiple applications sharing a band is greater than the net socio-economic benefit of a single application, taking into account additional costs resulting from shared use. The examination of the socio-economic benefits will have to take into account the dynamic effects that BSOs could have on competition and on investment incentives both for incumbents and potential new users. It will also have to take account of their legitimate expectations and of the conditions under which existing assignments were made.

To stimulate investments in new technologies, innovators could apply for the right to use a spectrum band on a shared basis and get access to it wherever a BSO has been identified and they can share the band without unduly compromising the incumbent's right to use the frequencies. To realise such an opportunity, the BSO applicant could negotiate a spectrum sharing contract with the incumbent user, in order to define their respective rights and obligations, i.e. sharing technologies and/or costs, in a legally-binding agreement. If both parties agree, they could approach the regulators to allow the spectrum access. To provide the sharing parties with regulatory guarantees that justify the necessary investments, NRAs would need to be able to grant individual licences for the additional users, which would constitute shared spectrum access rights (SSAR) that are based on sharing contracts which are legally binding to all users of a particular range of frequencies.

Is this the same approach as the one being proposed in the US?

The US is advancing the use of so called TV white spaces (i.e. broadcast television spectrum that is not used in a particular location) and discussing the merits of "shared use spectrum superhighways" in governmental spectrum. In the EU we are adopting a dual track approach in line with the Radio Spectrum Policy Programme - finding more spectrum for wireless broadband and promoting more and efficient sharing of spectrum. We need a technology and service neutral approach to ensure that we have the internal market incentives in place to foster more capable technologies in the medium and long term. In this regard we do not propose sharing as an alternative to refarming, but as a complementary source of spectrum resources. As such, the proposed mechanism for identifying BSOs is agnostic in regard to whether it is applied before or after refarming of a given band.

Why is the Commission focusing on licensed shared access (LSA), if licence-exemption works well and stimulates innovations?

The focus is on the missing element in the internal market framework. The value of licence-exempt bands is evident and their extension is supported where necessary. However, in particular incumbents need reassurances and legal certainty to agree with the shared use of spectrum. How important such reassurances are for commercial users that would want to share spectrum bands was also recently highlighted in regard to proposals from industry to allow authorised shared access ("ASA") to spectrum. A Radio Spectrum Policy Group (RSPG) report, has pointed out that such an approach could provide additional users with spectrum access rights and guaranteed quality of service. The RSPG is a high-level advisory body of the European Commission. In this regard, sharing contracts based on an LSA approach can open new incentives to share bands and to guarantee that quality of service requirements can be met. 

Communication: Promoting the shared use of radio spectrum resources in the internal market

Source: European Commission