Use of the 1781.7-1785.0 1876.7-1880.0 MHz Bands for the Provision

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					Use of the 1781.7-1785.0 / 1876.7-1880.0 MHz Bands
for the Provision of GSM 1800 Telecommunications
                                          Services




                       A Consultation Document


                                       April 2003




   The Radiocommunications Agency is an Executive Agency of the Department of Trade and Industry.
                         The Agency's website is located at www.rad io.gov.uk
1       EXECUTIVE SUMMARY

1.1     This consultation document reviews possible options for the use of all or part of the
        1781.7-1785.0 MHz band paired with the 1876.7-1880.0 MHz band to provide
        telecommunications services based on GSM 1800 1 technology.

1.2     The 3.3 MHz band at 1876.7-1880.0 MHz currently serves as a guard band to
        protect GSM 1800 services against interference from DECT 2 systems and vice
        versa. However, based on the conclusions of ERC 3 Report 100 (“Evaluation of
        DECT/GSM 1800 compatibility”) 4 and RA’s 5 own analysis, a 3.3 MHz guard
        band between GSM 1800 and DECT is no longer considered necessary. The
        1781.7-1785.0 MHz paired band is currently unassigned. A band plan is shown in
        Appendix A, and further technical considerations are given in Appendix B.

1.3     The bands under consideration form part of the overall GSM 1800 spectrum, 1710-
        1785 MHz paired with 1805-1880 MHz. This spectrum is identified in ERC Decision
        (95)03 6 for the provision of mobile telephony services based on GSM technology.

1.4     As GSM 1800 is harmonised (within Europe), handset manufactures produce phones
        that operate over the entire GSM 1800 spectrum. The Government has licensed the
        entire available spectrum identified for GSM (both the GSM 900 and GSM 1800
        bands), excluding guard bands where these have been thought necessary. The final
        awards were made following the consultation “Mobile Phone Spectrum over the next
        decade”7 . Consequently there is an enormous existing market for GSM 1800 phones,
        together with low equipment costs and innovative products.

1.5     RA has received a number of requests from industry expressing interest in using this
        spectrum to provide telecommunications services, ranging from short-range in-
        building solutions to GSM services on commercial airliners and passenger ferries.

1.6     Three basic scenarios for the use of this spectrum have been identified, and views on
        each are sought. These scenarios are as follows:
            to make the spectrum available, on a national or regional basis, to either the
             existing GSM operators or to new entrants for the provision of public mobile
             telecommunication services;
            to make the spectrum available for short-range, low-power use on a licence-
             exempt basis; or
            to retain the guard band and leave the paired band unassigned, in order to assist
             migration of GSM 1800 to future IMT-2000 use and to facilitate Testing and
             Development licensing.
        A related issue is whether to make the spectrum available in a technology- neutral way
        or to restrict it to GSM technology. For the second scenario, another related issue is
1
  GSM : Global Systems for Mobile Teleco mmun ications.
2
  Digitally Enhanced Cordless Teleco mmunications.
3
  Eu ropean Radioco mmunications Co mmittee.
4
  ERC Report 100, “Co mpatibility between certain rad iocommun ications systems operating in adjacent bands.
   Evaluation of DECT/ GSM 1800 co mpatib ility”, Naples, February 2000.
5
  Rad iocommun ications Agency.
6
  ERC/ DEC/(95)03, “ERC Decision of 1 December 1995 on frequency bands to be designated for the
  introduction of DCS 1800”.
7
  Published by the Department of Trade and Industry, February 1996.
      whether to allow third-party public services or to restrict the spectrum to self-provided
      use.

1.7   RA would be grateful for written comments on the above scenarios, and in particular
      answers to the specific questions raised in Section 5 of this consultation document.

1.8   RA is required to complete and publish a Regulatory Impact Assessment (RIA)
      before any changes are made to the use of this spectrum. A draft RIA is attached to
      this consultation document, and will be developed in the light of responses to the
      consultation. Comments on the draft RIA are therefore particularly welcome.

2     RESPONSES TO THIS CONSULTATION

2.1   Responses to this consultation should arrive no later than 25 July 2003. These should
      be sent to:
      Martin Fenton
      Public Wireless Networks Unit
      Radiocommunications Agency
      11R/2A
      Wyndham House
      189 Marsh Wall
      London
      E14 9SX
      or electronically to Martin.Fenton@ra.gsi.gov.uk
      or by fax to 020 7211 0117.

2.2   This consultation document is also being published on the RA website,
      www.radio.gov.uk.

2.3   Any comments or complaints about the conduct of this consultation should be
      addressed to:
      Julia Fraser
      Information and Publicity Manager
      Radiocommuncations Agency
      9Y/14B
      Wyndham House
      189 Marsh Wall
      London
      E14 9SX
      or electronically to Julia.Fraser@ra.gsi.gov.uk.
3       PUBLICATION OF RESPONSES

3.1     Respondents to this consultation should note that, in the interests of open government:

           unless confidentiality is expressly requested, individual responses will be placed
            in the public domain in printed or electronic form, together with the names and
            contact details of authors. Respondents are requested to make it very clear if they
            wish to keep some or all of their response confidential;
           unconditional permission to publish responses will be assumed unless the author
            expressly states otherwise;
           any copyright attached to responses will be assumed to have been relinquished
            unless it is expressly reserved; and
           where applicable, any information provided will be covered by the Data
            Protection Act 1998.

4       BACKGROUND

        Curre nt regulatory situation

4.1     The GSM 1800 spectrum, with the exception of the 2 x 3.3 MHz that is the subject
        of this consultation, is licensed on an exclusive national basis to the four current
        GSM operators: mmO2, Orange, T-Mobile and Vodafone. Between them they have
        2 x 71.6 MHz of spectrum. See Appendix A for details of the current GSM 1800 and
        DECT assignments.

4.2     Within Europe, ERC Decision (95)03 designated the frequency bands 1710-
        1785 MHz and 1805-1880 MHz to DCS 1800 (GSM 1800) from 1 December 1995.
        Licensing of the GSM 1800 spectrum in the UK took account of the reco mmendations
        of ERC Report 31 8 , which indicated that the minimum frequency separation required
        between GSM 1800 and DECT carriers is 5 MHz; hence the implementation of a
        3.3 MHz guard band. See Appendix B for further technical details.

        Future regulatory situation

4.3     It should be noted that the band 1710-1880 MHz (which includes the entire
        GSM 1800 spectrum) was identified by WRC-20009 as potential expansion spectrum
        for 3G/IMT-2000. As indicated in the UK Spectrum Strategy 2002 10 , the Government
        expects that the GSM 1800 spectrum will be refarmed for 3G use in the longer term.
        However, the timing of this refarming will depend on the speed of growth in, and the
        nature of, 3G services, and on the demands that this will place on the spectrum,
        bearing in mind that additional 3G spectrum at 2500-2690 MHz is expected to
        become available from 2008.




8
  ERC Report 31, “Co mpatib ility between DECT and DCS 1800”, Brussels, June 1994.
9
  World Radioco mmunication Conference 2000 (Istanbul, Turkey, 8 May to 2 June).
10
   “Strategy for the future use of the radio spectrum in the UK”, RA, April 2002
5       PROPOSALS FOR USE OF THE SPECTRUM

5.1     Wide-area public use

5.1.1   At present there is a continuing strong demand for GSM services. Making additional
        GSM spectrum available to the existing operators could be very beneficial. Once
        existing channels have been exhausted, providing capacity in areas of high demand
        requires solutions such as cell- splitting or the introduction of micro and pico cells
        overlaying the macro-cellular network. These types of solution are expensive, as
        significant extra infrastructure is required (base stations, cell sites, backhaul, etc).
        Providing extra channels to the operators would increase the capacity of the existing
        network, thus reducing the need for extra cells in the future.

5.1.2   With approximately 2 x 3 MHz of spectrum, it would just be possible to implement a
        stand-alone wide-area macro-cellular network. This network would be limited in
        terms of the capacity it could provide, with little or no flexibility to cater for dense use
        in areas of high demand. Nevertheless, such a network might be attractive to certain
        operators, depending on the services envisaged.

        Question 1      Given the other potential uses outlined in this document, do you
                        consider it most appropriate to make the spectrum available for wide-
                        area public use?

        Question 2      If your answer to question 1 is yes, do you consider it most appropriate
                        for the spectrum to be used to supplement the spectrum of the existing
                        GSM operators, or to be made available for potential new GSM
                        operators on a regional or national basis?

5.1.3   The report of the Independent Review of Radio Spectrum Management, published by
        Professor Martin Cave on 6 March 2002, recommended that:

                “Recommendation 7.6 – Auctions should become the default means of
                assigning spectrum licences between competing users, to achieve an efficient
                market-driven outcome.”
5.1.4   In its response to the independent review the Government stated:

                “Auctions remain our preferred method of assigning new spectrum but are not
                appropriate in all circumstances.”

5.1.5   For the above reasons, if it were decided to make the spectrum available for wide-area
        public use, the favoured mechanism would be via an auction.

        Question 3      If your answers to questions 1 and 2 are yes, do you consider it most
                        appropriate for the spectrum to be awarded via an auction process?

5.2     Short-range, low-powe r GSM use on a licence-exempt basis

5.2.1   As an alternative to wide-area public use, the spectrum could be given over to short-
        range, low-power use on a licence-exempt basis – either for self-provided, private use
        or for public services provided by third parties for closed-group working. It is
        anticipated that the technology would remain based on GSM standards.
5.2.2   A number of potential applications for this kind of use can be e nvisaged, including:
           wireless office;
           retail (supermarkets, shopping centres); and
           museums and galleries.
5.2.3   One significant advantage of this type of low-power, licence-exempt GSM use is that
        operators/service providers might be able to make use of the existing base of GSM
        handsets, thus significantly reducing entry costs. (Recent estimates put the number of
        current GSM subscribers in the UK at around 50 million 11 .) As an example, one could
        envisage a wireless office solution where users could be connected to the normal land
        PSTN network using their GSM mobiles, via an office-based GSM pico cell
        connected to the company PBX. When they leave the office, users would then roam
        onto their normal public wide-area GSM providers’ networks.

5.2.4   Another use could be within museums/exhibitions, providing information about
        exhibits to visitors as they wandered around. Alternatively, in the retail environment,
        supermarkets could text customers with details of special offers and other promotions
        as they moved through the store.

        Question 4       Given the other potential uses outlined in this document, do you
                         consider it most appropriate to make the spectrum available for short-
                         range, low-power GSM use on a licence-exempt basis?

        Question 5       If your answer to question 4 is yes, what kinds of application do you
                         anticipate will develop? Estimates of potential market size and
                         anticipated penetration would also be useful.

5.2.5   Another low-power, licence-exempt use that could be envisaged is the provision of
        public GSM services to passengers on ferries and aircraft, where either they are
        outside their land network’s normal coverage area or normal GSM operation is
        prohibited for safety reasons (as on airliners). However, a number of significant
        regulatory difficulties (which are outside the scope of this consultation) would need to
        be overcome before use on passenger ferries and aircraft could be authorised. These
        difficulties include international co-ordination agreements, agreements with other
        administrations to operate base stations within their territories, implications of the
        maritime and aeronautical licensing regimes, and safety concerns due to interference
        or misuse. For these reasons, use on passenger ferries and aircraft is not considered as
        a practical proposition.

5.2.6   Historically, use of licence-exempt spectrum to provide third-party services by way of
        business has been prohibited in the UK. However, in October 2001 RA consulted on
        the “Use of licence-exempt spectrum for the provision of public telecommunication
        services”. The result of this consultation was a change in policy to allow public use of
        licence-exempt spectrum, where justified, for specific bands on a case-by-case basis.
        Consequently, on 8 July 2002, the prohibition was removed for the public use of the
        2.4 GHz band 12 for equipment complying with IR2005 13 . Similarly, on 12 February

11
   Source: Mobile Co mmun ications, Issue 349, 4 March 2003.
12
   Statutory Instrument 2002 No.1590, “The Wireless Telegraphy (Exemption) (A mend ment) Regulations
   2002”.
13
   UK Radio Interface Requirement 2005, “W ideband transmission systems operating in the 2.4 GHz ISM band
   and using spread spectrum modulat ion techniques”.
        2003, public use of bands at 5150-5350 MHz and 5470-5725 MHz was permitted for
        equipment complying with IR2006 14 .

        Question 6       If your answer to question 4 is yes, should the use of this spectrum for
                         the provision of public services be allowed?

        Question 7       If your answer to question 6 is yes, specifically what kinds of public-
                         service offerings do you anticipate will develop? Estimates of potential
                         market size and anticipated penetration would also be useful.

5.3     Maintaining the status quo

5.3.1   As indicated in paragraph 4.3, the entire GSM 1800 spectrum (1710-1880 MHz) was
        identified by WRC-2000 as potential future expansion spectrum for 3G/IMT-2000. It
        is anticipated that the spectrum will migrate to 3G use in the longer term, after
        additional spectrum at 2500-2690 MHz has been made available around the year
        2008.

5.3.2   Allocating the spectrum to GSM use, especially on a licence-exempt basis, could
        cause difficulties for future migration. Once spectrum has been released for licence-
        exempt services, it is very difficult to change its use at a future date as it is almost
        impossible to recall equipment from users when there are no records of who and
        where they are.

5.3.3   Current UMTS 15 systems use a channel spacing of 5 MHz. Allocating approximately
        2 x 3 MHz of spectrum would introduce additional fragmentation in the band, which
        could hinder efficient migration in the future.

5.3.4   For the above reasons, it might be better in the longer term not to release the spectrum
        at this stage but to keep it to one side to assist in future migration to 3G.

5.3.5   Another factor that should be borne in mind is that the current spectrum is currently
        used for Testing and Development (T&D). Temporary T&D licences can be issued in
        this spectrum with minimal impact to existing users. As the spectrum forms part of
        the GSM 1800 band and is close to 3G bands, it is particularly useful for organisations
        developing cellular systems.

        Question 8       Do you consider it prudent not to release the spectrum at this stage but
                         to keep it unassigned, thus assisting future migration to 3G and
                         facilitating T&D work?

5.4     Time-limited use of the band

5.4.1   Given the anticipated migration of the GSM 1800 spectrum to 3G use, it may be
        prudent to limit any proposed future use of the band to, say, 10 years, so that future
        migration is not hindered.

5.4.2   A disadvantage of making the spectrum available for licence-exempt GSM use is that,
        once a band has been released for licence-exempt use, it is very difficult to recover it

14
   UK Radio Interface Requirement 2006, “Short range, broadband, data services (HIPERLAN) operating in the
   frequency range 5-6 GHz”.
15
   Universal Mobile Teleco mmunicat ion System.
        in the future (to migrate to 3G). However, as indicated in paragraph 5.3.3, an
        advantage of licence-exempt GSM use of the band is that operators/service providers
        will be able to make use of the existing base of GSM handsets. This might effectively
        impose a self- limitation on future licence-exempt use, since the number of 2G
        handsets available for use in this band will fall as GSM generally migrates to 3G.

        Question 9     Do you consider it necessary to limit future use of the spectrum for a
                       set period, to ensure that future migration to 3G is not hindered?

        Question 10 If your answer to question 9 is yes, what period do you consider is
                    appropriate?

5.5     Technology neutrality

5.5.1   It should be noted that the conclusions of ERC Report 100, which indicate that a
        guard band between the GSM 1800 and DECT spectrum is no longer necessary, are
        valid only on the assumption that GSM technology will utilise the spectrum. If other
        technology were employed, this would raise adjacent-band compatibility issues for
        both the DECT and the GSM 1800 edges of the band. For this reaso n, only options
        based on the use of GSM technology are being considered in Sections 5.1 and 5.2 of
        this consultation.

5.5.2   However, one of the main themes of the Independent Review of Radio Spectrum
        Management can be summarised as follows:
           In the interests of maximising the economic and social value of the spectrum,
            internationally agreed frequency allocations and national frequency assignments
            should make spectrum available for commercial use subject to a minimum of
            restrictions on technology and services.

5.5.3   Given the above discussion, it would be interesting to hear views on the possibility of
        making the spectrum available in a technology-neutral way (either for wide-area
        public use or for short-range, low-power, licence-exempt use) that does not invalidate
        the conclusions of ERC Report 100.

        Question 11 Is it desirable and practical to make the spectrum available in a
                    technology-neutral way, either for wide-area public use or for short-
                    range, low-power, licence-exempt use?
6   SUMMARY OF QUESTIONS

    Question 1    Given the other potential uses outlined in this document, do you
                  consider it most appropriate to make the spectrum available for wide-
                  area public use?

    Question 2    If your answer to question 1 is yes, do you consider it most appropriate
                  for the spectrum to be used to supplement the spectrum of the existing
                  GSM operators, or to be made available for potential new GSM
                  operators on a regional or national basis?

    Question 3    If your answers to questions 1 and 2 are yes, do you consider it most
                  appropriate for the spectrum to be awarded via an auction process?

    Question 4    Given the other potential uses outlined in this document, do you
                  consider it most appropriate to make the spectrum available for short-
                  range, low-power GSM use on a licence-exempt basis?

    Question 5    If your answer to question 4 is yes, what kinds of application do you
                  anticipate will develop? Estimates of potential market size and
                  anticipated penetration would also be useful.

    Question 6    If your answer to question 4 is yes, should the use of this spectrum for
                  the provision of public services be allowed?

    Question 7    If your answer to question 6 is yes, specifically what kinds of public-
                  service offerings do you anticipate will develop? Estimates of potential
                  market size and anticipated penetration would also be useful.

    Question 8    Do you consider it prudent not to release the spectrum at this stage but
                  to keep it unassigned, thus assisting future migration to 3G and
                  facilitating T&D work

    Question 9    Do you consider it necessary to limit future use of the spectrum for a
                  set period, to ensure that future migration to 3G is not hindered?

    Question 10 If your answer to question 9 is yes, what period do you consider is
                appropriate?

    Question 11 Is it desirable and practical to make the spectrum available in a
                technology-neutral way, either for wide-area public use or for short-
                range, low-power, licence-exempt use?
                                                                                                                               Appendix A
                            CURRENT GSM 1800 AND DECT ASSIGNMENTS
1805.1


                      1810.9


                                                1816.7




                                                                                1846.7




                                                                                                             1876.7

                                                                                                                      1880.0




                                                                                                                                                1900.0
                                                                      Base Transmit
                               Vodafone 2 x 5.8 MHz
         mmO2 2 x 5.8 MHz




                                                         T Mobile 2 x 30 MHz             Orange 2 x 30 MHz                        DECT 20 MHz




                                                                      Base Receive
1710.1


                      1715.9


                                                1721.7




                                                                                1751.7




                                                                                                             1781.7

                                                                                                                      1785.0
                                                                                                  Appendix B
TECHNICAL CONSIDERATIONS

B.1        The 1876.7-1880.0 MHz band currently serves as a guard band to protect GSM 1800
           systems against interference to or from DECT systems. The 1781.7-1785.0 MHz band
           is currently unassigned.

B.2        In June 1994, the ERC published Report 31 on “Compatibility between DECT and
           DCS 1800”. This report indicated that the minimum frequency separation required
           between DCS 1800 (now termed GSM 1800) and DECT carriers is 5 MHz. The report
           was the result of both theoretical studies, based on ETSI specifications, and limited
           practical measurements carried out under laboratory-controlled conditions. 1.8 MHz
           of this separation is provided for within the DECT band (due to the location of the
           first DECT carrier at 1881.792 MHz); hence the need for a further 3.3 MHz of guard
           band within the GSM 1800 allocation.

B.3        Subsequently, in February 2000 the ERC published Report 100, “Evaluation of
           DECT/GSM 1800 compatibility”. This report, a revision of Report 31, was again the
           result of both practical and theoretical studies. Report 100 assessed the potential
           interference with real equipment, as well as with specificatio n values on the basis of
           minimum coupling loss (MCL), enhanced minimum coupling loss (E-MCL)
           calculation and Monte Carlo (MC) analysis. It recommended that a guard band is not
           required, although specific local restrictions may be needed for the GSM sub-band
           1878-1880 MHz. Section 7 of the report recommended certain mitigation measures to
           reduce interference between GSM 1800 and DECT systems, such as:
              the GSM BCCH control channel should not operate within the 1878-1880 MHz
               band;
              GSM can escape temporary interference close to the DECT band edge by intra-
               cell handover, if this escape is made to another carrier more distant from the
               DECT band; and
              DECT wireless local loop (WLL) equipment that exceeds the minimum blocking
               requirement should be used.

           See ERC Report 100 for further details.

B.4        Implementation of GSM 1800 spectrum varies from country to country in Europe.
           Many countries have implemented only a proportion of the available spectrum, and a
           few have not implemented it at all. Of those that have implemented the whole of the
           available spectrum, or at least a large proportion of it, the guard band between DECT
           and GSM 1800 varies considerably. Some countries (such as Belgium, France, Italy
           and Luxembourg) have either no guard band or a minimal guard band (i.e. o ne
           200 kHz GSM channel). Other countries (such as Portugal, Spain and the UK) have a
           3.3 MHz guard band. Yet other countries have allowed for still different guard bands.
           (Source: ECC Report 10, Annex 5 16 .)




16
     ECC Report 10, Interim report fro m the ECC to the CE, “Frequency usage to facilitate a co -ordinated
     implementation in the Co mmun ity of third generation mob ile and wireless commun ication systems operating
     in additional frequency bands as identified by the WRC-2000 for IMT-2000 systems”, Paris, March 2002.
                                                                                 Appendix C
THE CONSULTATION CRITERIA

1   Timing of consultation should be built into the planning process for a policy
    (including legislation) or service from the start, so that it has the best prospect of
    improving the proposals concerned, and so that sufficient time is left for it at each
    stage.

2   It should be clear who is being consulted, about what questions, in what timescale and
    for what purpose.

3   A consultation document should be as simple and concise as possible. It should
    include a summary, in two pages at most, of the main questions it seeks views on. It
    should make it as easy as possible for readers to respond, make contact or complain.

4   Documents should be made widely available, with the fullest use of electronic means
    (though not to the exclusion of others), and effectively drawn to the attention of all
    interested groups and individuals.

5   Sufficient time should be allowed for considered responses from all groups with an
    interest. Twelve weeks should be the standard minimum period for a consultation.

6   Responses should be carefully and open-mindedly analysed, and the results made
    widely available, with an account of the views expressed, and reasons for decisions
    finally taken.

7   Departments should monitor and evaluate consultations, designating a consultation
    co-ordinator who will ensure the lessons are disseminated.
           Draft Regulatory Impact Assessment




Use of the 1781.7-1785.0 / 1876.7-1880.0 MHz Bands
for the Provision of GSM 1800 Telecommunications
                                          Services


                                      March 2003




   The Radiocommunications Agency is an Executive Age ncy of the Department of Trade and Industry.
                         The Agency's website is located at www.rad io.gov.uk
REGULATORY IMPACT ASSESSMENT
  Use of the 1781.7-1785.0 / 1876.7-1880.0 MHz bands for the provision of GSM 1800
                              telecommunications services

Purpose and intended effect

1     The proposed change in policy is to make available the bands 1781.7-1785.0 /
      1876.7-1880.0 MHz, the second of which is currently maintained as a guard band
      between GSM 1800 and DECT services. (The 1781.7-1785.0 MHz band is currently
      unassigned.) The objective is to promote efficient use of the spectrum by allowing
      potentially valuable services to occupy the released bands.

Options

2     Three options are being considered in this consultation:
       Option 1 – Make the spectrum available on a national or regional basis, either to
        the existing GSM operators or to new entrants, for the provision of public mobile
        telecommunications services.
       Option 2 – Make the spectrum available for short-range, low-power use on a
        licence-exempt basis, either for third-party public services or for self-provided use.
       Option 3 – Maintain the status quo, with the spectrum remaining unassigned.

3     If either of Options 1 or 2 is chosen, further consultation will determine how the
      released spectrum is to be allocated and, in the case of Option 2, to which type of
      service.

Risk assessment

4     ERC Report 100 and RA’s own analysis suggest that a 3.3 MHz guard band between
      GSM 1800 and DECT is no longer required. RA has received a number of requests
      from industry, expressing interest in using this spectrum to provide a range of
      telecommunications services; this indicates that demand for spectrum exceeds supply
      in this band. If this spectrum is not made available, firms will not be able to provide
      potentially valuable services to consumers.

5     However, there are also risks in making the guard band available. For example:
       the risk of radio interference between users may require specific local restrictions
        for the GSM sub-band 1878-1880 MHz, which could limit the potential use of the
        released spectrum; and
       the Government expects that the entire GSM 1800 band will be refarmed for 3G
        use in the longer term. Releasing the guard bands for use now could make it more
        difficult to co-ordinate the migration of 3G services in the future.

6     The risks associated with each option are identified in the table below, together with
      the costs and benefits.

Summary of the costs and benefits

7     At this stage of the consultation process, it is not possible to give detailed c alculations
      of the costs and benefits of each option. However, this section summarises the main
elements that will need to be quantified in order to decide between the options. It also
identifies the risks to those costs and benefits, which could form the basis of a
sensitivity analysis giving ranges for the likely costs and benefits of each option.

             Option 1: Wide-area      Option 2: Licence-       Option 3: Status quo
             public use               exempt use

Benefits     Cost reductions if the   Economic value of        Easier to migrate the
             spectrum is given to     new services,            GSM 1800 bands to
             existing operators.      including possible       3G.
                                      public-service
             Benefits of increased    benefits.                Vacant spectrum
             competition (i.e.                                 remains available for
             lower prices and                                  testing.
             improved service) if
             new entrants are
             accommodated.

Costs        Cost of rollout if the   Cost of deploying        Opportunity cost of
             spectrum is offered to   equipment (which         not using the vacant
             new entrants.            may be low if people     spectrum.
                                      can use GSM
             Cost to existing         equipment).
             operators will be
             minimal if they are      Cost of retrieving the
             offered the spectrum,    spectrum if the GSM
             as the infrastructure    1800 bands are
             already exists.          refarmed to 3G.

             Cost of retrieving the
             spectrum if the GSM
             1800 bands are
             refarmed to 3G.

Risks        The small quantity of    Possibility of radio     3G refarming may be
             spectrum may not         interference from        delayed.
             support new entrants.    overuse of licence-
                                      exempt spectrum.
             Uncertainty over the
             timing of 3G             Uncertainty over
             refarming may affect     demand from users,
             the cost of retrieving   given the previous
             the spectrum.            release of the 2.4
                                      GHz band for licence-
                                      exempt public use.

                                      Uncertainty over 3G
                                      refarming.
Business sectors affected

8      Many sectors of the economy and consumers would benefit from the suggested
       change in policy, including:
        the telecommunications operators;
        radio equipment manufacturers and suppliers;
        the electronic consumer market;
        the retail consumer market; and
        telecommunications consumers.

9      Small users could benefit particularly from the release of licence-exempt spectrum
       under Option 2.

10     The costs of using the released spectrum under Options 1 and 2 would fall directly on
       radio operators. However, they would also stand to benefit from charging for their
       services, and any use of the new spectrum would be voluntary. There would be no
       costs falling on third parties, provided that interference does not increase outside the
       released bands.

Cons ultation

11     RA is to carry out a national consultation exercise into the use of the 1781.7-1785.0 /
       1876.7-1880.0 MHz band for provision of GSM 1800 telecommunications services on
       28 April 2003. Consultees are to be given 12 weeks to reply.

Monitoring and evaluation

12     The success of implementing any of the options could be monitored and evaluated in
       part by monitoring the extent of use of the released spectrum.

13     Option 1 could also be evaluated by monitoring the profitability of any new entrant
       and the prices charged to customers as a result of introducing new spectrum. It would
       probably not be possible to monitor cost savings if the spectrum were assigned to an
       existing operator.

14     The success of Option 3 could be assessed in part by the extent of use of the spectrum
       for T&D. Whether the spectrum could be refarmed – and, if so, its cost – would be
       another criterion for success.