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					           BT Response to the
 Radiocommunications Agency Consultation on

Use of the 1781.7-1785.0 / 1876.7-1880.0MHz Bands
For the Provision of GSM1800 Telecommunications
                      Services



             Submission date 25th July 2003
                                                                              Issue: 1
                                                                            th
                                                                         25 July 2003


                         BT Response to the
               Radiocommunications Agency Consultation on

            Use of the 1781.7-1785.0 / 1876.7-1880.0MHz Bands
       For the Provision of GSM1800 Telecommunications Services


Executive summary

1. BT welcomes this consultation on the opportunities for bringing into productive
   use the former guard bands in the 1800MHz GSM spectrum.

2. BT strongly recommends that the Radiocommunications Agency should make this
   spectrum available, on a licence-exempt basis and at the earliest opportunity, for a
   wide range of new low-power wireless applications and services based on
   GSM1800 technology. Licence-exempt GSM spectrum could provide consumer
   and business users of GSM with significant added value from their terminals.

3. To release the full potential of this spectrum, we also strongly recommend that the
   exemption from individual licences must enable public access applications as well
   as the sale and use of residential and business Customer Premises Equipment
   (CPE). This approach would be consistent with the licence-exemption actions
   recently completed for the 2.4GHz and 5GHz bands.

4. We do not believe it is appropriate for this spectrum to go to the wide-area cellular
   environment, either directly to the existing operators or via an auction. We do not
   see a need for this, and we do not see such an outcome as improving the GSM
   customer experience or broadening customer choice.

5. Likewise, we are strongly opposed to the option to retain the status quo. This
   would deny manufacturers, service providers and users an excellent opportunity to
   provide or enjoy an increased choice of services. The opportunity must be taken
   now to extract real benefit from this spectrum.

6. For practical reasons we do not agree with the suggestions relating to the
   preservation of this spectrum for T&D purposes.

7. We do not consider that it is necessary to “time-limit” the licence-exemption. BT
   believes that when the time eventually arrives to re-farm the GSM 1800 band for
   new technologies, the licence-exempt GSM market would prove to be “self
   extinguishing” within relatively short time scales.

8. Whilst BT generally favours technology neutrality, we recognise that, in this
   particular spectrum, technical viability, commercial success and best overall
   benefit to the UK would only be achieved via the use of GSM technology. BT
   therefore supports the proposal that this spectrum be limited to systems based on
   GSM 1800 technology.




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                                    BT Response to the
                          Radiocommunications Agency Consultation on

                 Use of the 1781.7-1785.0 / 1876.7-1880.0MHz Bands
            For the Provision of GSM1800 Telecommunications Services



Contents


EXECUTIVE SUMMARY .................................................................................................................... 2

CONTENTS ............................................................................................................................................ 3

1       INTRODUCTION ......................................................................................................................... 4

2       BT’S OVERALL POSITION....................................................................................................... 4

3       SHORT-RANGE LOW-POWER GSM USE ON A LICENCE-EXEMPT BASIS ................ 5
    3.1      LICENCE-EXEMPT SPECTRUM ...................................................................................................... 5
    3.2      THE MARKET FOR LICENCE-EXEMPT GSM .................................................................................. 5
    3.3      PICO-CELL “BASE STATION” AVAILABILITY ................................................................................ 7
    3.4      HANDSETS .................................................................................................................................. 7
    3.5      REGULATORY AND COMMERCIAL ISSUES .................................................................................... 8
4       WIDE AREA PUBLIC USE ........................................................................................................ 8
    4.1      MAKING THE SPECTRUM AVAILABLE TO THE EXISTING OPERATORS............................................ 9
    4.2      SALE BY AUCTION ..................................................................................................................... 10
5       MAINTAINING THE STATUS QUO ...................................................................................... 10
    5.1      GENERAL COMMENTS ............................................................................................................... 10
    5.2      THE PROGNOSIS FOR UMTS IN THE GSM1800 BANDS .............................................................. 11
    5.3      DEPENDENCE OF DEMAND ON THE EXISTENCE OF GSM NETWORKS AND MARKETS .................. 11
    5.4      UNSUITABILITY FOR FUTURE T&D PURPOSES ........................................................................... 12
6       TIME LIMITED LICENCE-EXEMPTION ............................................................................ 13

7       TECHNOLOGY NEUTRALITY .............................................................................................. 13

CONCLUSIONS ................................................................................................................................... 13




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1       Introduction

BT welcomes this consultation and the opportunity it provides to comment on the
future use of the former guard bands in the 1800MHz GSM spectrum. We
congratulate the Radiocommunications Agency on taking a lead in Europe in
exploring the potential of this newly available spectrum, and we believe significant
benefits for the UK can be forthcoming if an innovative approach is taken to its future
use.

In §2 below we set out our headline position that strongly supports the low-power
licence-exempt option. We believe that such a move represents the next logical step in
the series of license exemption initiatives originating from RA. These are popular
actions by RA, and are gaining increasing support as industry and users begin to
realise and develop services over them. We are convinced that, given a little time,
they will prove to be highly successful and of real benefit to consumers. Underpinned
by this momentum, licence-exempt GSM spectrum could provide consumers and
business users with significant added value from their GSM terminals by enriching
the range of services available to them.

In §3 we explore the licence-exempt option in more depth, and particularly the
indicators that suggest that benefits could flow quite quickly once this option is
chosen. In §4 and §5 respectively we address the wide-area and status quo options,
and explain why we do not believe these to represent beneficial use of the spectrum.
Next, in §6 and §7, we consider the issues of time-limited use and technology
neutrality in respect of this spectrum, as these are raised as specific topics in the
Consultation Document1. Finally we summarise the conclusions that underpin our
position.

2       BT’s Overall position

Our headline position on this issue is straightforward. BT strongly believes that the
Radiocommunications Agency should make this spectrum available, on a licence-
exempt basis and at the earliest opportunity, for a wide range of new wireless
applications and services based on GSM1800 technology.

Furthermore, in line with the removal of differentiation between public and private
applications in the 2.4GHz and 5GHz bands, and in order to release the full potential
of this spectrum, we believe that exemption from individual licensing must include
the possibility of offering public access applications as well as the sale and use of
residential and business Customer Premises Equipment (CPE).

We do not believe it is appropriate for this spectrum to go to the wide-area cellular
environment. Just 2 x 3.3MHz is clearly an insufficient amount of spectrum to support
a new operator (even a regional operator) to compete effectively with the established
big players, and we do not consider that the existing operators have any particular
need of this additional spectrum. BT believes that a greater, more visible, benefit to

1
 Use of the 1781.7-1785.0 / 1876.7-1880.0 MHz Bands for the Provision of GSM 1800
Telecommunications Services; A Consultation Document. Radiocommunications Agency, April 2003


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the UK would be forthcoming if this spectrum provided scope for innovation in
relatively low-power licence-exempt applications, using GSM 1800 technology,
around the periphery of the main public GSM environment. This could significantly
enrich the choice of services available over GSM terminals of various types.

Likewise, we are strongly opposed to the option to retain the status quo. This would
deny manufacturers, service providers and users an excellent opportunity to provide
or enjoy an increased choice of services. Furthermore, for practical reasons, we do not
agree with the suggestion relating to the preservation and appropriateness of this
spectrum, in its present form, for future T&D purposes, for example in relation to
future 3rd Generation mobile applications at 1800MHz.

3      Short-range low-power GSM use on a licence-exempt basis
3.1    Licence-exempt spectrum

The recently released 2.4GHz and 5GHz licence-exempt bands for Wireless LANs
have clearly demonstrated how these bold initiatives have unleashed a significant
pent-up demand for such spectrum. Each release has stimulated a wide range of
innovative business ideas that can materialise relatively quickly and be explored with
low commercial risk. Not all will succeed, but emerging from the new ideas will be
sustainable products and services that will enrich peoples’ home, education and work
lives than would otherwise have been the case. We fully expect the forthcoming
release under a light-licensing regime of 5.8GHz spectrum for Fixed Wireless Access
to re-enforce this picture.

The release of the 1800MHz spectrum under discussion in this consultation under
licence-exempt conditions would complement both these earlier licence-exempt
opportunities and the public GSM cellular offerings. We are convinced that this is not
only the right thing to do but that it would be an equally successful and popular step
for the Government to take.

In §3.2-3.5 below we offer our views on various indicators that point to the license-
exemption of this spectrum being a market, commercial and regulatory success for the
UK. We have examined these carefully, and in our opinion the indicators associated
with each are now strong, leading us to believe that it is timely to create this new
GSM 1800 licence-exempt market, and that such a market could develop quite
rapidly.

3.2    The market for licence-exempt GSM

BT views the market for licence-exempt GSM applications as being broad in its scope
and full of opportunity for innovation in both CPE design and localised service
provision. This must be of real benefit to the end-user community. It is generally
considered that the range of application would fall into the following generic areas: -

 Wireless PBXs

The main benefit of the proposed band is the widespread availability of handsets with
economies of scale that result from the international success of the GSM standard.


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Users would prefer to have a single, personal communications device that contains
their personal directory and can be used in both the wide area and the office
environment. High value terminals with dual mode devices allowing access to other
radio interfaces are likely to become available. However, to extend the concept of
improved in-office coverage and capacity (with commensurate increases in speech
quality and data rate) to a wider market, access to the GSM handset market is a
necessity.

 Domestic CPE

As with the office environment, the availability of customer premises equipment
(CPE) in the consumer market promises the capability of a single personal device for
use in the home and externally. The provision of a home base station that is connected
through the fixed line infrastructure will give the customer choice in the way in which
their calls are delivered, depending on their location.

 Retail outlet

With the availability of licence exempt spectrum in the GSM bands, truly tailored
services (e.g. serving niche markets segments based on their location) could be
offered by a number of service providers to customers on their single personal
communications device. For example, retailers could offer in-store services, within
which details of available offers or coupons could be downloaded to the handset once
they have entered the building.

 Local guide systems

Other examples of tailored location based services could include commentaries at
tourist attractions. These could be delivered to the user’s handset with the added
benefit that foreign visitors could be identified from their handset network code and
the appropriate language choices offered automatically.

Customer choice is a key goal that would be enabled by the availability of licence
exempt GSM spectrum. This choice is achieved through the availability of different
methods of delivery of speech and data services and access to new services
specifically tailored to a customer’s location. The capability of a variety of different
Service Providers to offer these new features will drive competition and innovation in
this area. This is a field where, to date, the licensed GSM operators have made the
commercial decision not to operate but rather concentrate their efforts on the
deployment of their wide are cellular offerings. This is only right, and falls in line
with the obligations imposed by their licences, which give the benefit of exclusive
control of spectrum (and therefore quality in the wide area).

The enabling of public access in the 2.4GHz ISM bands has demonstrated that there is
willingness amongst Service Providers of varying sizes, and with varying market
segments in mind, to provide access. This fertile ground of innovation is currently
typically restricted to a customer base with more expensive, high-end terminals. To
extend this concept to the mass market requires the enabling of delivery to the wide
range of personal communications devices that have already achieved the economies


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of scale. These economies of scale themselves were the result of successful
international collaboration by the telecommunications industry as a whole
incorporating the ideas of a large number of contributing organisations. To achieve
similar success in the provision of mobile services requires access by Service
Providers to the consumer market. This is analogous to the growth of services on the
Internet where the providers of specifically tailored content are not constrained by a
limited number of commercial routes to the customer.

3.3    Pico-cell “base station” availability

BT envisages that a licence-exempt GSM environment would generally be developed
around the concept of low-power “pico-cell” base stations. An important indicator
towards early market entry and eventual market success is therefore the ready
availability of such pico-cell base station equipment based on the GSM technology.

The provision of pico-cellular service could be achieved using a fully equipped pico-
cell base station (comprising all the functionality of a GSM BTS). Alternatively, in
environments such as retail outlets, the low power service could be achieved through
the deployment of distributed antenna systems throughout the building.

The markets for the applications discussed in §3.2 above have been in front of the
“wide-area” GSM operators for some time, but thus far they do not seem to have
found them a commercially attractive adjunct to their core wide-area businesses. The
new low-power GSM technologies are not therefore to be found in any quantity in the
UK at the present time.

The production of the necessary low power equipment relies on the use of similar RF
and base-band components to those already available in volume for the handset
market. The pico-cell base station equipment that BT has seen is small and
lightweight and attractive in its styling. It is possible to see that it would be welcome
in both home and work environments and BT believes that there would be few issues
over consumer and/or business/industry customer acceptance. BT is aware that at least
three manufacturers that are already able to offer such products to a UK market, and
we believe others will follow if the market reacts positively.

3.4    Handsets

Perhaps uniquely in the context of new mobile applications, customer terminals
(handsets) are already widely available at low cost. This has been achieved through
the co-operation of the worldwide telecommunications industry as a whole supported
by a co-operative standardisation process.

The GSM1800 standards already include channels within the spectrum being
considered (GSM Absolute Radio Frequency Channel Numbers (ARFCN) 870 – 885).
In Europe these 16 channels were never activated because of the receive-before-
transmit principles of GSM handsets operating under the control of base stations that
recognised the previous guard-band constraints.




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The Consultation Document correctly notes that there are already over 50 million
GSM handsets in the UK, and well over half of these are GSM1800 or dual band and
therefore already able to access the new 1800MHz channels. It is for this reason that
we believe that the licence-exempt GSM market could grow rapidly. The number of
dual band handsets will continue to rise as the UK operators with both 900MHz and
1800MHz spectrum seek to ensure that they can use their 1800MHz spectrum and
maximise their roaming opportunities to 1800MHz-only overseas networks. Whilst it
is likely that the release of this spectrum would be a catalyst to further innovation in
terminal designs, the sizeable established base of GSM 1800 handsets, already able to
operate on the new channels, confirms the existence of a potential ready-made market.

The excellent availability of terminals clearly represents an important catalyst for the
rapid availability and take up of new licence-exempt services at low cost to the end-
user.

3.5     Regulatory and commercial issues

With the regulatory groundwork undertaken prior to licence-exemption of the 2.4GHz
and 5GHz bands there should be few, if any, regulatory impediments to the early
release of this spectrum for licence-exempt applications, including public access
applications.

If the use of the new spectrum is for GSM based technology alone, issues of
compatibility with the GSM networks in the adjacent bands are avoided. Indeed, the
most likely impact, if any, would be from the higher-power licensed networks into the
new low-power services, which clearly do not have any claim to protection in this
respect. Appropriate measures must be taken to protect the adjacent DECT market,
but these are not onerous and have been clearly identified during the CEPT studies2
that led up to the removal of the guard band requirement.

Section 5.2.3 of the Consultation Document explores an example of GSM terminals
roaming between the licence-exempt and public wide-area GSM environments.
Ideally, within this scenario, customers would like to have a single personal device
which has no restrictions placed upon its use. Clearly this commonly held vision
embraces a range of connection and commercial issues that would need to be
addressed.

4       Wide area public use

We stated within our overall position in §2 above that we did not see any sound
argument for making this spectrum available to the wide-area GSM environment.
Apart from our belief that the spectrum should be used to enable a wholly new UK
market of licence-exempt GSM applications, we have two further points that led us to
this conclusion.

2
 ERC Report 100 Compatibility between certain radiocommunications systems operating in adjacent
bands: Evaluation of DECT/GSM1800 Compatibility. European Radiocommunications Committee,
Naples, February 2000



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4.1     Making the spectrum available to the existing operators

One option that the Agency proposes is that the spectrum could be made available to
the existing operators. BT does not support this option.

A recent independent report3 from the European Radiocommunications Office on
GSM spectrum usage in European (CEPT) countries provides a useful background
summary of the spectrum available to various European GSM operators. This
information clearly shows that the UK GSM operators, whilst not having the largest
spectrum packages, are not generally disadvantaged in terms of spectrum per
customer compared with other large European GSM operators. We do not therefore
believe that the UK wide-area cellular environment has need of additional spectrum
on these grounds. Furthermore, if sub-divided amongst the 4 existing operators, this
spectrum would offer, at best, just 4 additional GSM channels for each. This would be
of little benefit to GSM users at the cost of an extremely valuable licence-exempt
market opportunity.

The mobile market in the UK is currently reaching saturation in terms of total mobile
subscriber numbers. The latest market reports from Oftel4 indicate that subscriber
numbers actually fell by 245,000 in the quarter to the end of March 2003 when
compared with the previous quarter.

Against this background there is no further requirement to increase capacity to
support rising customer numbers. Taking consideration of the other side of the
capacity equation, the Oftel figures also show that the average number of call minutes
per user per month has held steady at around 90 outgoing minutes for the past year.
Although growth continues to take place in Short Message Service (SMS) traffic, with
over 1.6 billion messages sent in June 20035. At an average of approximately 30
messages per user per month this places a relatively light load on the radio network
when compared with the voice traffic.

Clearly the challenge for mobile operators is to increase their revenues by the increase
in data and value-added services. However, we can expect that most of the high
bandwidth data growth will relate to access to media services, and it can be argued
that most of the media services will go on to UMTS. In this scenario the GSM bands
will only need to host a modest take-up of less demanding data services.

We therefore believe that the existing GSM mobile environment has sufficient
spectrum to meet existing needs for the carriage of traffic. With the availability of the
3G spectrum the operators also have sufficient capacity to expand their data services
in the future.

As a consequence we conclude that there is no case to be made for the additional
2 x 3.3MHz to be made available automatically to the existing GSM operators.

3
  ERO Information Document on GSM Frequency Utilisation within Europe (updated February 2001),
European Radiocommunications Office.
4
  Market Information: Mobile Update; OFTEL; June 2003
5
  Mobile Data Association (www.mda-mobiledata.org)


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4.2    Sale by auction

Another option suggested by the Agency is to make the spectrum available via an
auction for wide area (national, regional or presumably local use) under normal GSM
operator authorisation.

We believe that the probable outcome of an auction would be its purchase by one of
the established GSM operators, which would then, under the Agency’s own
arguments, gain a very modest cost advantage (we do not believe that the small
amount of spectrum involved would upset the competitive stability imparted by the
more-or-less balanced GSM spectrum allocations that exist at present). However, this
result would probably not realise any noticeable benefit to GSM users.

It is conceivable, but we believe most unlikely, that a new operator could purchase the
spectrum. Whilst the Agency suggests (§5.1.2 of the Consultation Document) that,
with 2 x 3.3MHz …it would just be possible to implement a stand-alone wide-area
macro-cellular network... we do not believe that this is actually realistic on either
national or regional scales. The limitations on traffic capacity, barriers to growth and
infrastructure costs of such a new network would not allow a sound business case to
be established. Even if this result did happen, perhaps for local applications in high
traffic areas, it is very difficult to see how it would create any significantly new
benefit for the GSM user community in general, unless there was a unique service
offering. A further issue arises as how this relatively new commercial operation might
be positioned vis-à-vis any future re-farming of the 1800MHz band.

In terms of tangible benefit to the UK, we do not see the availability of this
spectrum to the wide area environment, either directly or via an auction, as
improving the GSM customer experience or broadening customer choice in
services and applications. Furthermore, if the spectrum were made available
under licence-exempt conditions, the GSM operators would have the opportunity
to participate in the new market that this action would create, should they wish
to do so.

5      Maintaining the status quo

5.1    General comments

Section 5.3 of the Consultation Document explores the option of maintaining the
status quo in the GSM 1800 bands, primarily because of its potential eventual re-use
for 3rd Generation mobile applications.

BT is firmly opposed to this option, and we believe that there are several indicators
available to suggest it would be more appropriate to take an immediate and proactive
approach to extracting economic benefit from this spectrum. These indicators are
explored in §5.2-§5.4 below.




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5.2    The prognosis for UMTS in the GSM1800 bands

BT believes that the global success of GSM will ensure that the technology will
remain deployed in its present form for the foreseeable future.

The 2000 World Radio Conference did identify the bands 1710-1785MHz and 1810-
1885MHz for possible eventual re-farming for UMTS/IMT-2000. Nevertheless, the
GSM operators strongly argued that any such “re-farming” would be in the longer
term and, in some cases, not until after the 2500-2690MHz UMTS/IMT-2000
extension band had become fully utilised. Furthermore, it is clear that unless and until
the 3rd Generation networks can match the extensive coverage of GSM, the latter will
be needed on an ongoing basis to underpin the 3G roll out and to support global
roaming. Ubiquitous 3G coverage is likely to be many years away.

This would suggest that GSM could be required for, say, another 20 years (however
we fully recognise that the lifetime of GSM is primarily an issue for the GSM
operators). By that time, even if re-farming does take place, the required mobile
spectrum arrangements (e.g. the up-link vs. downlink asymmetry, channel widths and
duplex arrangements) could be different to those of the current GSM spectrum
configuration. It is possible that the band would therefore require significant re-
organisation at that stage.

BT therefore believes that it makes no sense to sit on this spectrum in its present
form for what would probably be a protracted period, and that the opportunity
must be taken to extract maximum benefit from it in the interim.

5.3    Dependence of demand on the existence of GSM networks and markets

In §5.3.2 of the Consultation Document the Agency expresses a concern that the
permitting of licence-exempt GSM devices would lead to a situation whereby it would
not be possible to recall these devices should re-farming of the 1800MHz band
eventually become desirable.

BT does not believe that this represents a significant barrier to licence-exemption. The
licence-exempt GSM environment will be strongly related to the public wide-area
GSM networks – the intention being to add value for the users of GSM terminals.
When the GSM networks are eventually replaced by newer technology, the associated
licence-exempt market would undoubtedly want to match the technology evolution
within its own environment.

BT believes that when the time eventually arrives to re-farm the GSM 1800 band
for new technologies, the licence-exempt GSM market would prove to be “self
extinguishing” within relatively short time scales.

We were pleased to note that in §5.4.2 of the Consultation Document the
Radiocommunications Agency also suggested the possibility of this outcome.




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5.4     Unsuitability for future T&D purposes

Part of the Agency’s argument for retaining the status quo is that the spectrum
recovered from the guard bands could continue to be used for test and development
(T&D) licences, especially for organisations developing cellular systems.

Given that the ongoing requirement for GSM technology T&D activities will
progressively reduce, we believe it might be possible for some such tests to continue
in the band without significant impact on licence-exempt applications, particularly if
they are limited to modest power levels at a few specific locations. We believe this
possibility should be explored by the Agency, and in this context we were pleased to
see the recent consultation document6 from the Agency on licence-exemption for the
non-operational use of wireless telegraphy equipment under suppressed radiation
conditions. We view this initiative as a positive step that has relevance to this present
discussion.

Nevertheless, given that the focus is now on 3rd Generation mobile systems, BT
envisages that T&D requirements will increasingly become associated with this new
generation of cellular mobile development.

The spectrum under discussion is just 2 x 3.3MHz of symmetrical paired spectrum.
Whilst some of the 3G mobile technologies (e.g. EDGE, CDMA 1x) could be tested
within this spectrum, UMTS W-CDMA (universally adopted by the UK 3G operators)
and its future evolutions will require 5MHz wide channels (as recognised in §5.3.3 of
the Consultation Document) as a minimum. To preserve the principle of technology
neutrality the spectrum available for 1800MHz T&D applications would need to
accommodate channel widths of at least 5MHz. Furthermore, as ERC Report 100
implies, it is not yet known what size of guard-band would be needed between the
operational 1800MHz GSM networks and any other technologies under test in this
adjacent spectrum.

Whilst the first generation of UK 3rd generation environment uses Frequency Division
Duplex and symmetrical 5MHz channels, it is recognised that, even for the 2500-
2690MHz band the frequency arrangements, especially in respect of asymmetry, may
need to be different. As noted above, by the time the UK considers the re-farming of
the GSM1800MHz spectrum, the frequency arrangements may need to be different
from those of the GSM networks. It would be those different arrangements that would
need to be tested, and 2 x 3.3MHz may be totally inappropriate.

BT believes that, as the next major cellular development is likely to be in the band
2500-2690MHz, it would make more sense to prepare for the early availability of
some of this spectrum for T&D purposes. This would be of greater benefit to the
system developers.

It is therefore difficult to envisage how the present ex-guard band spectrum
could host the more important future T&D requirements.

6
 Licence exemption for non-operational use of wireless telegraphy equipment under suppressed
radiation conditions; A Consultation Document. Radiocommunications Agency, July 2003


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6      Time limited licence-exemption

Section 5.4 of the Consultation Document considers the idea of a time-limited licence
exemption in order to facilitate future 1800MHz re-farming. BT believes that the
arguments provided in §5.3 above make this unnecessary.

Furthermore, in §5.4.1 of the document, the Agency suggests a time limit of 10 years
on licence-exempt applications. BT believes that such a limit would have a negative
impact on the market by discouraging business take up of the new exempted GSM
systems and manufacturer and service provider interest.

7      Technology neutrality

As a general principal BT favours technology neutrality, as we have indicated in
responses to previous RA consultations. However, it is clear that, in this particular
spectrum, technical viability, commercial success and best overall benefit to the
UK would undoubtedly be achieved via the use of GSM technology.

Furthermore, we recognise the situation indicated in §5.5.1 of the Consultation
Document. Whilst it has been demonstrated in ERC Report 100 that a guard band
between GSM1800 and DECT is no longer necessary, the compatibility with DECT
and GSM1800 has not been analysed for other technologies that might be considered
for this new spectrum. Those wishing to use alternative technologies would therefore
need to present an appropriate technical compatibility case.

In this case BT therefore supports the proposal that this new spectrum be limited
to systems based on GSM 1800 technology.


Conclusions

BT has carefully considered the future use of the 2x3.3MHz of ex-guard band
spectrum in the 1800MHz band. Our goal was a solution that offered best overall
benefit to the UK, with particularly emphasis on value-add for the GSM user-base in
the adjacent GSM1800 spectrum that represents a significant proportion of the
population.

Our clear conclusion was that the creation of a licence-exempt environment for
GSM1800 technology would offer the potential for an enhanced GSM user experience
with greater choice of services for these users and new markets for home and business
CPE equipment.

We therefore strongly recommend that the Radiocommunications Agency make
this spectrum available, on a licence-exempt basis and at the earliest opportunity,
for a wide range of new wireless applications and services based on GSM1800
technology. To release the full potential of this spectrum, we also recommend
that the exemption from individual licences must enable public access



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applications as well as the sale and use of residential and business Customer
Premises Equipment (CPE).

In arriving at this position, we found no justifiable reason for making the spectrum
available to the wide area cellular network (either directly or via an auction), as there
does not seem to be a need for this, and there would be little tangible benefit for the
UK as a whole.

For a range of practical reasons we also discounted the retention of this spectrum for
T&D purposes, and we could not support the suggestion that the “status quo” should
be maintained pending possible re-farming for UMTS at some future date. This is
prime spectrum for mobile/cordless applications, and we believe that the earliest
possible opportunity should be taken to extract significant value from it.

Manufacturers have pico-cell “base station” technology available, and there is a
massive existing GSM 1800 user base that could take advantage of a licence-exempt
environment, although it is recognised that there would be significant commercial
issues to be addressed for some applications.




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