Commission calls for sharing of radio spectrum for delivering mobile and wireless network growth

Out-Law News | 05 Sep 2012 | 9:42 am | 3 min. read

Mobile operators and other companies that have bought access to radio spectrum that enables them to deliver data traffic over their networks could be provided with incentives to share access to that spectrum under plans unveiled by the European Commission.

The Commission said that the capacity to continue to deliver the "exponential" growth in mobile internet data traffic was threatened by a lack of frequency band space for carrying that information. It said that telecoms firms, including internet service providers (ISPs), could share existing radio spectrum owned by others as a result of advancements in technology.

The Commission has called on national telecoms regulators across the EU to form a regulatory environment that better enable spectrum sharing and one which incentivises stakeholders to participate.

"With new technologies it is possible to share radio spectrum amongst several users – such as internet providers – or use the spectrum available between TV frequencies, for example, for other purposes," the Commission said in a statement. "National spectrum regulation often does not reflect the new technical possibilities, leaving mobile and broadband users at risk of poor service as demand grows, and preventing a single market for investment in such communications markets."

"A coordinated European approach to sharing spectrum will lead to greater mobile network capacity, cheaper wireless broadband, and new markets such as tradable secondary rights for a given spectrum allocation," it added.

The Commission said that new technology has made it possible to share radio spectrum "more efficiently". It said regulators should consider removing existing licensing restrictions that prevent the sharing of radio spectrum. Users of the spectrum should have "incentives and legal certainty" over the sharing of "valuable spectrum resources" in accordance with a "consistent regulatory" approach across the trading bloc, the Commission said.

Telecoms regulators should "define shared spectrum access rights" to encourage "innovators who deploy technologies that facilitate sharing" to share the spectrum, the Commission said. Regulators could also "encourage contracts between users" over the shared access rights, it added.

"Incumbent spectrum holders could use their resources more efficiently by sharing them on a contractual basis," the Commission said.

The Commission said that although spectrum sharing was already "a well established concept in some [EU] Member States", a "common approach" to regulation and incentives was still necessary to ensure that the European market did not become "fragmented and lag behind in the use of wireless innovations."

It said that the sharing of existing spectrum would prevent a costly re-allocation of the frequency bands for new purposes. There is no "vacant" spectrum currently available, the Commission said.

"Radio spectrum is economic oxygen, it is used by every single person and business," Neelie Kroes, the EU Commissioner responsible for the Digital Agenda, said in a statement. "If we run out of spectrum then mobile networks and broadband won’t work. That is unacceptable, we must maximise this scarce resource by re-using it and creating a single market out of it. We need a single market for spectrum in order to regain global industrial leadership in mobile and data, to attract more R&D investments."

The Commission said that there has been "exponential increase in demand" for spectrum due to the increase in data traffic stemming from "mobile computing devices, Wi-Fi hotspots but also smart electricity grids and industrial automation." It is expected that more than 7 billion phones, tablets and other mobile devices will have internet access by 2015, it added.

Competition law expert Angelique Bret of Pinsent Masons, the law firm behind Out-Law.com, said that the challenge will be to create a regulatory environment which is acceptable to all stakeholders and which does not dampen competition between operators.

"Incumbent spectrum owners could be interested in arrangements that help them get their costs down, provided that they are convinced that it will be advantageous to them in the long-term to share access rights," she said. "From a competition law perspective, the concern will be to ensure that the market remains competitive in the face of increasing co-operation and consolidation between operators."

"The Office of Fair Trading in the UK is currently assessing, under the merger regime, whether proposed network-sharing arrangements between Telefonica and Vodafone could raise competition concerns. The two companies are hoping to share physical assets such as telecom masts around the country in order to benefit from significant cost savings. The key point the OFT will be assessing is the extent to which such an arrangement affects the firms’ ability and incentive to operate their networks and provide services independently and whether it could lead to a substantial lessening of competition in the market," Bret said.

"The OFT and the telecoms regulator, Ofcom, will want to ensure that the potential benefits of such arrangements are achieved with the minimum reduction of competition so that, ultimately, it means better services and lower prices for consumers. Regulators will have to consider similar issues when establishing a regulatory environment that incentivises the sharing of radio spectrum," she added.