Implementation Plan

Spectrum Framework Review: Implementation Plan

Issued March 24, 2005

Executive summary

1. BT was very pleased to receive Ofcom's Consultation Document on the Spectrum Framework Review: Implementation Plan. We view this document as a turning point between the extensive preparatory work for the UK's liberalised spectrum environment and the creation of a working and, hopefully, successful spectrum market.

2. The important areas of broadband wireless access and convergence stimulate BT's interests in this implementation plan. We are generally supportive of the proposals that Ofcom has made, as we believe they provide opportunities in both these areas.

3. There are nevertheless some issues upon which we wish to comment. These we have addressed in our answers to the questions asked in the CD (see Annex 1) and, where appropriate, within the main text below.

4. We welcome Ofcom's intentions to award spectrum as soon as practical as we see this as being the key to alleviating some of the problems associated with spectrum scarcity as well as bringing in to use spectrum that may otherwise remain unused.

5. The technologies and systems that may be best suited to broadband may be quite different from those optimised for, say, the cellular mobile applications. If broadband wireless access and other applications are to secure spectrum via the "spectrum market" it is essential that any spectrum awarded by Ofcom into this market is inherently made available on a technology and applications neutral basis (and is made tradable) from the outset.

6. Despite the welcome linkages that Ofcom makes between this current initiative and its broadband policy, BT has concerns that many of the spectrum bands likely to be auctioned are small (in the broadband context). On their own, these may not represent sufficient opportunities for broadband capabilities with the potential to follow the expected trends in broadband user numbers and bandwidth.

7. BT believes that the awards mechanism should be transparent, simple and treat all bidders equally. This would imply that an auction mechanism would be more suitable than the other options such as comparative selection and first come first served.

8. In our view, in a number of key areas, Ofcom needs now to deliver greater clarity over such matters as what will or will not actually be allowed in particular bands; how spectrum rights and obligations will be defined; how interference management will be handled; whether or not full technology neutrality (within sensible technical constraints to protect other spectrum users) will apply; to what extent full liberalisation will be allowed in current and new licences; and if, how and for how long special measures will be in place to protect the 3G services.
 
9. BT does not believe that any restrictions are necessary to prevent the use of spectrum for mobile services other than 3G, unless such restrictions are necessary for essential technical reasons.

10. While we understand Ofcom's suggestion to have a practical working definition of "3G Services" in order to aid regulatory certainty, we have expressed some concerns with the definition proposed. In practice, given that Ofcom is apparently favouring removing any restrictions by, say, 2007 we are not convinced that the definition will have any very practical implications given the time it would take to acquire spectrum and deploy a network.

11. In our view the likelihood is that the 2G &3G spectrum will be required to offer current services for some considerable time to come. To that extent it does not seem to us to be of a high priority to resolve the issues raised within §9 with any urgency.

12. Insofar as the rollout obligations issue relates to regulatory clarity and certainty, it can do no harm for Ofcom to be as clear as possible with regard to its approach in these matters. The other main principle which needs to be upheld is that the sanctions should be appropriate for the market conditions pertaining during the lead up to the compliance date. The draft guidance is a reasonable start but clearly does not stand up as a standalone document in its current form.

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