When one thinks of the world's scarce natural resources it is usually minerals or food supplies that first come to mind. Avoiding disputes over how these resources are to be preserved or exploited is often the subject of international discussion and agreement. The demand for communication through mobile telephones, wireless networks and short-range links such as Bluetooth has meant that radio spectrum must also be treated in the same way and, after lengthy consultation, the European Commission issued Decision No. 676/2002/EC in April 2002. This Decision established a regulatory framework for radio spectrum policy and the allocation of spectrum to particular uses in the European Community. The Decision gave the decisions of CEPT (The European Conference of Postal and Telecommunications Administrations) the force of law. Actual assignment of frequencies to individual users and or licensees then becomes a matter for individual governments and their regulators. The EU body with particular responsibility for strategic advice on spectrum harmonisation is the Radio Spectrum Policy Group (RSPG), which CEPT and its daughter organisation ETSI (the European Telecommunications Standards Institute) attend as observers. Binding decisions are made by the Radio Spectrum Committee by qualified majority voting.

This approach is not as straightforward as it sounds. CEPT is not an EU institution. Rather, it is a regional member of the International Telecommunications Union and has to consider the interests of 47 member countries not all of which are EU Member States. This does not stop the EU sending Mandates to CEPT on various subjects, some of which may be highly contentious.

Nevertheless, a harmonised approach is considered essential if future problems are to be avoided. Consequently, it may be necessary to revise the present EU model whereby particular frequencies are allocated to particular technologies. This approach is driven by the growing acceptance that individual services are merely differing manifestations of a universal world of digital communications. Previously, these individual services have been delivered via telephony, computers or broadcasting. Convergence between different media means that companies that had provided these discrete services are now moving to compete in each other's business territory. These activities require very considerable financial investment and the availability of radio spectrum is essential for many of the technologies involved.

These issues are being addressed through the development of WAPECS (Wireless Access Policy for Electronics Communication Services), which is intended to establish a policy position that will ensure radio spectrum will be available for a wide variety of services and applications while taking into account the increased demand for spectrum, convergence, and the need for rapid access to radio spectrum as new services and applications develop. RSPG has consulted interested parties and it expects CEPT to make a decision on the way forward by 29 July 2007.

Neutrality

The WAPECS policy approach is to regard all services within its remit as having equivalent importance and therefore equally entitled to bid for and to operate systems using any radio spectrum allocated to WAPECS that becomes available. Businesses in sectors that previously expected spectrum to be assigned to them as of right (and therefore enjoying a substantial barrier to new entry by competitors) will have to adapt and national regulators will need to be neutral when considering competing technologies and services. This could prove challenging for some regulators who operated the old arrangements successfully while maintaining the interests of national or local flagship businesses.

Benefits and burdens

The benefits of a harmonised approach can be seen in the commercial success of the GSM system. Standardisation allowed for competition and consequently inexpensive consumer products and infrastructure equipment, which in turn created a stimulus to all the supporting businesses. Standardisation was brought about by cooperation at the project's inception - not just in developing the technical standards but also in ensuring that radio spectrum would be available to create a truly trans-national capability. However, this achievement required cooperation over many years and it may not be possible to accommodate this type of effort where a new product may be here today and gone tomorrow. Also, any cooperative efforts for the joint development of products and services or to acquire spectrum for future use must be careful to avoid challenge under Council Regulation (EC) 1/2003 for breach of the competition laws in Articles 81 and 82 of the European Treaty. Finally, the GSM standard is now the subject of major patent disputes relating to technology that may or may not be "essential" technology. In light of all this, a more laissez-faire approach might result in the more rapid adoption of new technologies.

The laws of physics and economics

One of the potential drawbacks of the WAPECS approach lies in the nature of radio technology itself. One radio transmission can interfere with another depending on power and frequency so the potential arises for one application or one operator's service to have an adverse effect on another's. That interference could be international or local and there is a risk that neighbouring countries (even if operating to WAPACS CEPT rules) could allocate frequencies to different technologies in a way that might cause interference. Some uses of radio, for example radio astronomy, are very susceptible to interference and radio engineers are likely to face fresh challenges to minimise the effects of interference. Much work has been done on this issue but it does represent a constraint on some of the flexibility available for the implementation of the proposed policy. For example, on 14 February 2007, RSPG noted that use of the frequencies released by the switch from analogue to digital television by fixed or mobile telecommunications services would cause serious interference to adjacent channels used in digital television broadcasting.

Another potential risk arising from fragmenting a particular technology across a variety of frequency bands is an increase in component costs. Micro-electronic products generally carry high initial design costs and require large volume production to keep manufacturing costs low. Producing components that operate across a fragmented set of frequencies, which may be necessary in mobile products, may result in losing the advantages of high volume manufacture. Designing the necessary flexibility into a system may itself increase the design costs and lose the technical advantage to be won from optimising products to a particular frequency range.

If such a liberal regime is to be adopted, considerable thought will need to be given to the nature of the rights to be granted under a wireless telegraphy licence. Might it be a requirement that anyone causing interference to another licence holder's system will be identified and punished? Will the courts be an effective means to resolve interference disputes between licence holders?

The new world is already here: liberalisation, trading, awards and more

The UK regulator, Ofcom, already applies a policy of technology and service "neutrality". Existing licences have had restrictions reduced to give their holders more flexibility and businesses have sold licences to others who could put them to better use. There have been competitive auctions involving multiple bidders with rules that cover geography, sole or multiple use, anti-collusion provisions and the control of transmitted power. Further such auctions are in the pipeline, including for the substantial amount of spectrum to be released by the end of analogue television broadcasting. It is hoped that potential start-ups will see easier routes into the market than were previously possible.

Another UK initiative in radio spectrum allocation has been the Cave Audit, resulting from a review undertaken by Professor Martin Cave of all the public holdings of radio spectrum organisations such as the Ministry of Defence and the National Air Traffic Service for air traffic control. These organisations have very large holdings of spectrum and have generally not needed a licence because they are part of the Crown. The commercial community has long felt that a good proportion of these frequencies were either not used or were used inefficiently. The Treasury has introduced a scheme whereby any government organisation selling its unwanted spectrum can keep the proceeds. At the rates currently being achieved the amount of money involved could be very large. The current proposal is that "Recognised Spectrum Access" arising under s159 of the Communications Act 2003 will give public holders of radio spectrum a right that is tradeable in the same way as a Wireless Telegraphy Licence.

Conclusion

Interest in the regulation of radio spectrum has now extended from traditional users to a much wider community of governments, businesses and other parties. Many regulators are actively involved in supervising the transition and are content to allow the marketplace to resolve any uncertainties that arise, though international coordination of frequency allocation and the laws of physics continue to be constraints. It is clear that a policy of harmonisation could result in some quite unpredictable outcomes, some of which will not be harmonious at all. The substantial commercial interests now involved in this field should ensure that lawyers need to keep themselves well informed about this subject.