The European Commission recently published a Communication on spectrum sharing urging a close working partnership between the Commission and Member States to develop a harmonised system for identifying, developing and monitoring shared access to radio spectrum in light of the exponential growth in wireless data traffic, as Ginny O'Flinn, a Senior Associate at Olswang LLP, goes on to explain.
Maximising the efficient use and effective management of spectrum in the EU and elsewhere will become increasingly important in order to cater for the myriad of devices and applications which require wireless connectivity. The Commission cites industry predictions that mobile data traffic, will increase 26% annually by 2015, and that by then some 7.1 billion phones, tablets and other mobile devices capable of connecting to the internet will be in circulation.
Technological progress will soon enable users to share simultaneous rights of access to a specific frequency band without unacceptable levels of interference. A regulatory environment that facilitates spectrum sharing therefore needs to be in place to capitalise on these advances.
A number of steps have already been taken to address this issue. For example, the Radio Spectrum Policy Programme ('RSPP'), which was adopted in 2012, defines EU objectives in respect of radio spectrum, establishes general principles for the management of spectrum and furthers the goals of the Digital Agenda for Europe. One of the RSPP's aims is to identify and make available at least 1200 MHz of spectrum for wireless broadband services by 2015 (1).
The Commission's Communication (2) on spectrum sharing (dated 3 September 2012) discusses the drivers and enablers of spectrum sharing, the challenges spectrum sharing presents, and how co-operation between the Commission and Member States can overcome those challenges.
Drivers and enablers
The Commission gives various examples of current spectrum sharing including the most widely recognised, being WiFi networks, as well as applications operating in licence-exempt shared bands, for example smart meters and other machine-to-machine (M2M) communications, and sharing facilitated by new technologies, in particular cognitive radio technologies, which are enabling spectrum to be opened up on a shared basis whilst ensuring that primary services are still protected.
The Commission also notes that shared use of licensed or licence-exempt wireless broadband frequencies enables cost savings for mobile network operators, affordable internet connectivity and infrastructure sharing possibilities.
The key challenge of spectrum sharing, according to the Commission, is finding appropriate ways to authorise shared spectrum access to a band, i.e. to allow two or more users to use the same frequency range under a defined arrangement. Such an arrangement would need to include clear, effective sharing rules and conditions governing acceptable levels of interference and appropriate mitigation strategies. The Commission notes that, to date, users sharing licence exempt bands have no rights to be protected against harmful interference, while users sharing frequencies on the basis of individual licences could also benefit from regulatory guarantees.
Opening up radio spectrum for shared access clearly increases the risk of harmful interference to services already offered on that spectrum and therefore leaves incumbents reluctant to grant others access. If more spectrum sharing is needed to meet demand, steps must be taken to ensure that incumbents are not put at a competitive disadvantage, not least because if they perceive themselves to be at a disadvantage they will choose not to share their spectrum. Getting the balance right between incumbents and additional users is key. Measures must also be put in place to deal with licence-exempt bands, which are not currently monitored and which may not, in some cases, have enough capacity to cope with expansion of use.
In addition, the Commission considers the benefits to competition of increased spectrum sharing, noting that any transition from exclusive rights of use to shared use enhances competition from additional users and does not create undue competitive advantages for current or future rights holders.
The Commission's proposals
The Communication suggests that the most sensible way to develop the shared use of radio spectrum resources is to develop new regulatory tools at an EU level, namely:
- An EU approach to identify beneficial sharing opportunities ('BSO') in harmonised or non harmonised frequency bands (both licensed and licence-exempt); and
- Shared spectrum access rights as regulatory tools to authorise licensed sharing with guaranteed levels of protection.
The system proposed by the Commission for identifying BSO would be run by national regulatory authorities ('NRAs'), who would play a key role in identifying available spectrum and monitoring its use.
According to the Commission, identifying BSOs in a particular band requires transparency about the sharing arrangement that would apply, in particular: (i) the sharing conditions, i.e. the technical parameters defined by an NRA that determine the access hierarchy in a shared band (whether the band is to be shared equally or on the basis of a primary-secondary relationship); and (ii) the sharing rules, i.e. the common usage provisions that allow sharing, which could be mandated either by the NRA or defined by users on the basis of standards, common protocols, or sharing agreements complying with competition law.
Stakeholders would need to be able to apply to an NRA for the right to use a particular spectrum band or bands on a shared basis, and those stakeholders (or BSO applicants) would need to demonstrate how they would share the band(s) without unduly compromising the incumbent's right to use those frequencies.
In order to incentivise investments and leverage economies of scale across the EU, the Commission considers that there needs to be a consistent and coherent approach by individual Member States assessing such applications. To that end, the Commission proposes adopting a Recommendation which would define the process and key criteria at an EU level, including:
- A harmonised timeline;
- The opportunity for negotiation between the applicant and the incumbent, in which the NRA would act as a mediator, to clarify the terms of the BSO;
- An examination of the socio-economic benefits to take into account: (i) the conditions under which existing assignments are made, (ii) the legitimate expectations of the incumbent rights holders as well as BSO applicants; and (iii) the effects that BSOs could have on competition;
- The means for the NRA to approve a BSO and to ensure greater shared use of spectrum in order to achieve the most effective use of spectrum possible, including measures such as incentive fees;
- The provision of information at EU level on BSO applications and on the outcome of national processes, as well as identifying BSOs suitable for application across the internal market.
NRAs could also act as impartial technical advisers where users are negotiating spectrum sharing agreements. Such agreements would be legally binding, creating legal certainty and enabling incumbent users and BSO applicants to define their respective rights and obligations. Having such contracts in place should act as an incentive on incumbents themselves to identify BSOs and to volunteer to enter into spectrum sharing arrangements.
The Communication concludes with a series of steps it is proposing to take to progress spectrum sharing in the EU, including:
- Identifying BSOs in both licensed and licence-exempt frequency bands in cooperation with Member States (including enabling the development and deployment of White Space Devices based on harmonised standards for geo-location databases to be drawn up in response to the forthcoming Commission Mandate);
Considering making sufficient licence-exempt spectrum, harmonised at EU level, available for wireless innovations by:
- Ensuring predictable and reliable sharing arrangements;
- Studying and measuring the present capacity and potential congestion of the 2.4 and 5 GHz bands for data off-loading;
- Considering the designation of additional harmonised licence- exempt spectrum for RLAN services (Wi-Fi) at 5 GHz;
- Enabling more spectrum sharing between users by recommending a common form of spectrum sharing contract in co-operation with Member States and issuing guidelines on safeguarding efficient use of spectrum and fostering competition.
The Commission plans to launch a public consultation in order to identify the needs of users and establish best practices for spectrum sharing contracts. The Communication is addressed to the various European institutions seeking 'the broadest possible political endorsement' of the steps it proposes. Given the clear and pressing need for a harmonised approach on these issues, it can be expected that the Commission will receive the backing it seeks, so we can expect to see more on this in the coming months.
Originally published in E-Commerce Law & Policy, October 2012 issue