Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

DTI CONSULTATION ON THIRD GENERATION MOBILE COMMUNICATIONS

Here follows the JRC response to the Government consultation document regarding Third Generation Mobile Communications.

1. JRC Ltd is a joint venture company owned by BG plc Transco and the Electricity Association and is tasked with managing radio spectrum allocations on behalf of the fuel and power industries in the UK. These comments represent the considered views of those industries which account for about 5% of GDP in total.

2. The gas and electricity industries welcome the opportunity to comment on the consultative document. Since it is focused mainly on public telecommunications networks, it is not of major significance to our industries. They might expect to be users of these systems, though it is not at this stage clear whether the coverage and availability would be such as to be suitable for operational requirements of these two sectors. Third generation systems would however, be used extensively for routine business communications within these industries and as such, they welcome the UK taking a forward looking approach to this subject..

3. Although our members would be users of the public telecommunications systems, this should not preclude the allocation of spectrum for private business systems where required by our industries. The operational requirements of the fuel and power industries are such that they require high levels of coverage and availability beyond that which most commercial operators are prepared to guarantee. These networks need to be especially resilient to loss of electricity supply, and provide guaranteed access in times of crises. The only way in which the supply of essential services can be maintained is for the UK government to retain discrete allocations for private systems where there is a clear commercial or operational requirement for such.

4. JRC, on behalf of the gas and electricity industries will wish to keep a watching brief on the subject, but at this stage does not see a rationale for bidding for a seat on the newly formed UK Third Generation Advisory Group (UKTAG).

Adrian Grilli
Managing Director
23 May 1997

Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

TO SELF MANAGE OR NOT TO SELF MANAGE?

This paper was jointly presented at the MRUA Conference by Adrian A. Grilli CEng MIMechE MIEE, Managing Director, JRC Limited, UK and David S Tripp, CEng MIEE, Consultant, Telecommunications Advisory Committee, UK. The MRUA Conference was held on the 14-16 April 1997 at the Exeter College, Oxford, UK.

SUMMARY

The recent Government White Paper on Radio Spectrum Management commends the 'already considerable private sector participation in technical assignment' and says that 'more will be encouraged'. The Radiocommunications Agency also frequently invites users to co-operate to propose new self-management arrangements. The utilities are have some of the longest pedigrees in user self management; the paper draws on this experience to explain what is involved in self management, the costs and benefits to users, and speculates on reasons why more users have not opted for self-management. It concludes with an assessment of what measures might be taken to translate rhetoric into reality.

BIOGRAPHIES

Adrian Grilli is a Chartered Engineer currently Managing Director of the Joint Radio Company Ltd. Prior to joining JRC in February 1996, he spent 20 years in the Civil Service, primarily in the Department of Trade and Industry. Originally, he was employed in the motor industry where he trained as an R&D technician.

David Tripp, is currently Technical Director of Communications Support Services providing Communications Consultancy and Support on Fixed and Mobile Communications. He is Chairman of the Spectrum Management Group and a member the Telecommunications Advisory Committee (TAC) for the UK Water Industry, dealing with mobile and radio telemetry issues.

Prior to joining Communications Support Services he spent 7 years as the National Communications Manager for the National Rivers Authority (NRA), and was responsible for the design and implementation of the National Voice and Data networks, with additional responsibility for Telemetry and Mobile communications. Prior to this, he spent 6 years with Wessex Water and before joining the Water Industry he founded and spent 9 years with Datacall Ltd, designing and manufacturing telemetry systems.

DEFINITION

User self management can best be defined widely, applying to those organisations which do not simply approach the Radiocommunications Agency (RA) or RA's agents for a licence, but carry out some tasks potentially attributable to RA themselves or via a third party. The authors represent two user self management organisations, namely the Joint Radio Company Ltd which manages blocks of spectrum on behalf of the fuel and power industries, and the Telecommunications Advisory Committee which manages spectrum on behalf of the water industry.

There are a number of organisations which could be termed self management organisations, extending perhaps from the Ministry of Defence who have responsibility for almost half the spectrum, through British Telecom and Mercury Communications, the cellular operators and personal communications network operators, Department of National Heritage, Independent Television Commission, Radio Authority, BBC, Civil Aviation Authority, Department of Health/National Health Service, Home Office, and more conventionally thought of self management organisations, the Broadcasters Joint Frequency Management Group (BJFMG), and the Association of Service Providers Frequency Management Company Ltd (ASPFM).

BACKGROUND

Gas & Electricity

The Joint Radio Company Ltd (JRC) was established in 1994 as a joint venture between the electricity and gas industries in order to manage their allocation of radio spectrum to ensure access to vital communications facilities for both industries.

JRC dates back some 35 years to the former Joint Radio Committee of the fuel and power industries who were given blocks of radio spectrum to manage themselves in order to provide their essential telecommunications facilities. As Western Society becomes more dependent on the provision of the services by utilities for maintenance of standards of living and overall welfare, the services provided by utilities have to be increasingly responsive to customer needs. Maintenance of services also have significant safety implications in that disruption of high power electrical cables is a major safety hazard and may have profound complications in loss of service to vital organisations such as hospitals. Uncontrolled escapes of gas are likewise extremely dangerous and statutory requirements mandate a rapid response. JRC Ltd is a joint venture owned equally by BG plc and the Electricity Association (EA). Membership of the EA is shown in Figure 1.

Radio services provided by JRC for its members fall into four broad categories:

1. Mobile Services for vehicles and personnel on large sites. Increasingly, this extends beyond simple voice communications to data transmission and in the future, automatic vehicle location.
2. Telemetry Links to provide remote monitoring, status and condition of networks together with remote switching to reconfigure or control networks and plant from central control centres.
3. Remote Meter Reading for monitoring usage of resources. With the increasing attention to domestic consumers, there are major issues surrounding the remote meter reading for potentially 20 million consumers for each utility.
4. Microwave links used as part of the infrastructure either to link elements of the mobile radio network or scanning telemetry systems, or to provide trunk telecommunications within the area of the utility. Application for such links may be made directly to the regulatory authority, but utilities have the option of routing applications through their SMO where this is more convenient or they wish to avail themselves of additional technical resources.

Water

The water industry Telecommunications Advisory Committee (TAC) and its subsidiary Spectrum Management Group (SMG) carry out a similar role to JRC in spectrum management for the water industry and provide an industry voice on radiocommunications matters. Following privatisation the water industry invested resources in formalising its own self management status with the Department of Trade and Industry (DTI) and individual companies so as to clarify its role and the service that would be provided. There are many similarities in the requirements of the members of JRC and TAC, but the development paths that each has followed is somewhat different.

The need for reliable and resilient communications is equally essential for the water industry which also has a number of statutory duties to meet. When everything else going wrong, communications must keep going. Lives can be at risk if communications fail at a critical time. Private Business Radio (PBR) is not the simple choice, and it is not necessarily the cheapest option, but the Utilities have been prepared to invest significant sums in mobile communications needs to provide the necessary resilience.

The trigger for this investment by the Water Industry was the "encouragement" by RA to make more efficient use of spectrum at a time when preparations for the privatisation of the Water Industry were under way. The privatisation process resulted in the ownership of systems passing to the major user but with a right of access to other previous users.

To safeguard the interests of all members of TAC a set of guidelines and standards were produced and used to form the basis of the Manual of Spectrum Allocation and System Management. The principles laid down in the Manual were agreed and endorsed by Senior Executives of the Industry. This gave the process the credibility necessary for many different organisations to work together for the common good.

As the investment by the industry was going to be considerable it was essential the relationship between TAC and RA should also be put on a formal and legal basis. RA were very supportive throughout this process which resulted in an agreement which has stood the test of time.

Membership of TAC

The current membership is drawn from:

• 10 Water Service companies in England and Wales
• 20 Water Supply companies in England and Wales
• 3 Water Authorities in Scotland
• Water Service in Northern Ireland
• Environment Agency in England and Wales using 10 of the main systems

Local Management Groups

In the coverage area of any PBR system there may be up to 7 different organisations which have an interest in the radio spectrum. To provide a forum for these interests Local Management Groups have been set up for each of the 11 main systems. A number of Water Supply companies and the Environment Agency have shared the capital cost of the infrastructure with the Water Service companies. Local discussions, planning and negotiations take within these groups and any difficulties which cannot be resolved are passed to the SMG for consideration, with TAC acting as the final arbiter for those problems which cannot be resolved locally.

There are 11 main systems, using equipment provided by three different manufacturers, plus a number of smaller non-trunked systems. These support in excess of 20,000 mobiles operating in VHF Low Band.

WHAT DOES SELF MANAGEMENT INVOLVE?

Self management organisations carry out all or some of the following functions:

Planning

SMOs may plan the spectrum within which they operate in accordance with national or international agreements to provide the level of service required by their members. In the case of JRC and TAC, national cellular plans have been devised with appropriate planning criteria in order to ensure coverage of the whole of the geographic area of the United Kingdom to a required level of service for their members for mobile radio and scanning telemetry.

Frequency Assignment

The SMOs are responsible for either making frequency assignments, or making recommendations to RA on frequency assignment for their members. This frequently requires significant investment in appropriate frequency assignment tools. Most of the current frequency assignment software can be traced back to a user self management organisation which has commissioned or developed such systems themselves. BT's Peacemaker software which they use for their fixed links bands, NTL who have used their Aspect software for broadcasting planning, and Defence Research Agency's Crumpet software have all come from a self management pedigree. In the gas and electricity industries, EA Technology have produced the RF Designer series of software specifically tailored for utility use of microwave fixed links, scanning telemetry and private mobile radio. These investments in frequency management systems have been extremely expensive but are essential if the spectrum is to be managed efficiently and confidence gained in assignments.

Management

SMOs may be responsible for interference resolution between their members, monitoring use of their own spectrum, resolving disputes between members and re-arrangement of their spectrum plans to accommodate changes in operational conditions or increase capacity. This is one of the greatest areas of benefit to users in that it is tacitly accepted that all members will be prepared to accommodate changes to their systems if required for the overall benefit of all users. A further area of management extends to technical development. The SMO has more commercial power in terms of development of trunking scenarios, equipment procurement facilitation and development of protocols, specifications and standards. The SMO may not engage in these activities directly, but by co-ordinating industry views, manufacturers have confidence that a greater market will exist and users can promote standardisation to both reduce costs and facilitate interchange of equipment.

Licensing

In some cases, JRC for example, the SMO conducts the planning and assignment, but RA continues to issue the licences. In other cases, such as TAC, the SMO takes national channels from RA and then sub-divides them amongst their members.

Revenue Collection

In the case where the SMO distributes licenses on behalf of the RA, the SMO would normally also collect fees from its members and remit them directly to the RA.

Representation

Most SMOs as well as managing blocks of spectrum on behalf of their membership represent and promote their interests both directly to government and international organisations, and frequently attending specification and standardisation committees in addition. In this process, they may draw on their constituent members to ensure that there is a direct industry link into the committees but with a stronger voice.

SELF MANAGEMENT IN THE WATER INDUSTRY

To work effectively Self Management requires a clear management structure working within a framework which will ensure that the most effective use of the spectrum is made in a fair and equitable manner for all members. This management function is provided by the Telecommunications Advisory Committee. TAC members deal with the more strategic, policy and financial issues of mobile radio, scanning telemetry, licencing and regulatory issues.

The detailed general management of the various process are undertaken by the Spectrum Management Group - SMG which also deals with all technical matters related to communications and handles liaison with external organisations. It also manages the support contract with WRC.

Private Business Radio

The day to day frequency planning, coverage prediction, interference testing and assignments are undertaken through a support contract with the Water Research Centre (WRC) at Swindon who work closely with SMG and TAC members. A sophisticated graphical database has been built for PBR and Scanning Telemetry by WRC. The calibration of the modelling tools has been fine tuned as a result practical testing. The use of VHF Low Band does require a considerable element of practical experience, especially in areas of user congestion. As the usage density becomes higher the spectrum management and allocation becomes more complex.

As the channels are self managed the recommended assignments are sent to RA for verification and then issued. Under the current arrangements the actual issuing of a licence cannot be delegated by the RA.

The channels assigned to the Water Industry provide national coverage and are paid for on a national channel licence basis. The licence costs which are shared by the members are collected once per year and paid to RA in a single payment. This approach considerably reduces the management overhead to RA.

If interference occurs it is initially dealt with by Water Industry or WRC staff. It is only after it is confirmed that the interference is not being generated by the Water Industry that it will be passed to the Radio Investigation Service.

Scanning Telemetry

The Scanning Telemetry systems used by the Water Industry share a block of UHF spectrum with the Gas and Electricity Industries allocated throughout the country by an Adaptive Cellular Plan. The Water Industry has in excess of 6000 outstations in use. The assignments for these are handled by the WRC through the support contract. Although this is not a formal self management arrangement it is only one step removed.

Remote Meter Reading

WRC and JRC, together with RA, other members of the Utilities Industry, and manufacturers are working on a proposal for the use and management of the Remote Meter Reading Spectrum. This is an area where self management by a Spectrum Management Organisation may be appropriate.

WHAT ARE THE BENEFITS?

Self management brings greater control of spectrum used by its members and greater flexibility in the way in which assignments may be made. The spectrum can be distributed in the most effective manner to meet the need of users, and will not be based on others' interpretation of those needs.

Interference criteria can be developed and modified to provide an acceptable level of interference while providing as high a density of coverage as possible, and maintaining the minimum re-use distance. Aerial engineering can be employed to tailor coverage in specific geographic areas. This is possible because the members become, in effect, a closed user group working for the common good. Interference levels within the membership may be set slightly higher to provide sufficient coverage for all users, but interference from external users should be lower and would normally only be caused by faulty equipment or weather conditions.

National channel licence fees can apply but the savings do not cover the cost of self management.

By necessity the membership work closely together and can act with single voice with representation to external bodies and regulatory authorities.

WHAT ARE THE DISADVANTAGES?

The primary disadvantage is cost.

The actual amount is dependant upon factors such as:

1. The number of different organisations being represented by the self management process.
2. The number of systems in use by the membership; this is particularly relevant when you have a large number of small system users who do not take a service from the large trunked systems but are allocated spectrum under the self management process.
3. The number of different manufacturers' equipment and systems in use.
4. The cost of managing a small system will be disproportionately high, but the overall process must be equitable.
5. The cost overhead of the self management process.
6. The capital investment in hardware and planning tools.
7. The production, population and maintenance of a complete database of all base station sites and frequency allocations.

If it is the responsibility of the Spectrum Management Organisation to pay the licence fee to RA for the self managed channels, the apportioned fees must be collected from the membership. If for any reason there is a short fall it has to made up in order to make the overall payment to RA.

The SMO arrangements require the user not only to manage the spectrum on behalf of their members, but potentially also to do so for those who do not contribute to the running costs.

All members must work to a set of clearly defined standards under which they may have to fund moves and frequency changes for the common good. This is especially true where the spectrum is limited and changes have to be made to the location and distribution of spectrum for the benefit of all members.

A management structure must be in place which protects the interests of the small as well as large users.

Users may change to a different technology or withdraw from the management process.

Government legislation may cause the licence fee to change to a point where the process becomes less cost effective.

Once an SMO has obtained a block allocation from RA to meet its requirements, it can be difficult to obtain further spectrum if those requirements increase over a period of time. The RA assumption is that the user community will accommodate any increased demands within its own spectrum block. Those outside the block simply return to RA for further assignments.

RA are making increasing requirements of the SMOs in terms of reporting on their use of spectrum and efficiency with which they manage the spectrum. This has administrative and cost implications for the SMO.

With the current trend towards outsourcing facilities management, there may be future problems regarding who may be the holder of individual licences and the incentive for them to co-operate with the SMO. If a member outsources his radio systems, there may well not be an incentive on the facilities manager to co-operate with the SMO, and having once outsourced its telecomm requirements, the main user company may not wish to become involved in additional expenditure simply for the benefit of their fellow members of the SMO.

There is a need to define what self management will encompass. A package of services have been developed for the Water Industry, all related to mobile communications with self management forming part of that process. The actual frequency band being used and the amount of spectrum available has a major effect on the management of the spectrum. Limited spectrum and no parking channels makes self management a much more complex and therefore expensive process.

FUTURE OPTIONS

RA are pursuing more carefully crafted legal contracts with their SMOs which bring further costs in terms of the legal advice in preparation and execution of these contracts, associated with potential increased liabilities and obligations on behalf of the SMO.

RA say they wish to increase the extent of coverage of user self management, but there is a lack of incentives so to do. The requirements on the SMOs become more onerous and as industries become more competitive, the attraction of cutting costs by withdrawing from an SMO and simply taking the free rider solution becomes more attractive.

As requirements to use spectrum more efficiently increase, the investment required in appropriate frequency management tools also increases. This extends not only to the hardware platforms and the software to conduct the frequency management, but terrain clutter databases which have to become ever more sophisticated. There is an argument that the falling cost of IT outweighs the requirement for increasing complexity, but this is by no means certain.

RA are likely to require ever increasing amounts of information from the SMOs and for them to take on more licensing and revenue collection activities, which not only ships the administrative burden onto the SMO but also the potential financial liability should members default on their payments or contravene the requirements for their licence. It is unclear how a user SMO can enforce compliance under the WT Act if a notice is served upon them to rectify problems with one of their members' radio systems.

There are opportunities for self management organisations but RA will have to consider the complexities of the process and reflect this in any new pricing structure, and there are opportunities for organisations such as TAC and JRC to work together to investigate the potential for self management now and into the 21st Century.

CONCLUSIONS

If RA is really committed to user self management, then it has to address the hurdles which have prevented wider uptake. In the process it needs to look at the incentives for users to club together and manage spectrum themselves. One obvious solution is to offer users self management discounts whereby members of recognised spectrum management organisations will receive a discount on the statutory licence fee when working through that organisation, those not being members of the organisation routing their applications through RA and paying the standard fee. RA can then forward the application to the SMO, paying them the reduced fee and retaining the surplus to contribute to RA's own costs. Financial incentives are the way in which Government has responded to other policy areas where it seeks to enforce a change of culture, e.g. privatisation.

If the industry is committed to user self management, then it has to come forward with proposals for extending the existing arrangements to other industries and broader areas. For private business radio (PBR), for those users not currently covered by user self management organisations, would the MRUA come forward with a proposal to manage the PBR spectrum for the benefit of the rest of the industry? If the industry believes that it could manage spectrum more efficiently and more effectively than RA, is it prepared to put its money where its mouth is?

This raises one final issue in respect of what has happened in the broadcasting industry. There, the authorised UK broadcasters had their own user self management organisation, BJFMG, with the remainder of the industry procuring their licences through ASPFM, a commercial SMO. RA has recently terminated these two arrangements and replaced them with a single commercial SMO covering the whole of the ancillary services to broadcasting sector, the contract being awarded through competitive tender. This raises the spectre for user self management organisations in that should they come together, organise their sector and implement a unified self management arrangement, does that simply create a pathway whereby RA will then subsequently award a commercial contract, undermining the investment made by the industry in their own spectrum management organisation and requiring the industry to pay not only the costs of managing their spectrum but also generating a commercial profit for the organisation to whom the contract is ultimately awarded?

25 March 1997

Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

JRCL Response to the Government White Paper entitled
"Spectrum Management: Into the 21st Century"

The shareholders and members of the Joint Radio Company Ltd comprise the gas and electricity industries of the UK. Taken together, these industries account for some 3% of GDP, but interruption to the vital supplies provided by these industries would have a devastating impact on the whole of the British economy. Radio networks thus provide not only significant efficiency gains for these industries, but also provide resilience in cases of emergency and vital safety of life protection. As the appointed manager for the radio spectrum sub-allocated to the gas and electricity industries, JRC submits the following comments on the above document (with references in brackets to the relevant sections or chapters in the White Paper) ...

... recognising a need ...

• ... for change (ch3);
• ... for an economic influence over the allocation of radio spectrum in the UK and internationally;
• ... for a more rational process for assignment of radio licences (7);

... welcomes ...

• ... the changes which Government and Radiocommunications Agency have already introduced into management of the radio spectrum in the UK (5);
• ... the consultation process for the proposed new legislation;
• ... the proposed improvement in security of tenure to the protect the £250m investment by the gas and electricity industries in radio systems (s8.10);
• ... the intention to set any charges in a way to avoid distorting competition (11);
• ... the intention to retain in the public sector the core functions of spectrum management (s9.2);
• ... encouragement for private sector bodies undertaking self management for their members (s9.3);
• ... the regular publication and up-dating of a spectrum strategic plan (s2.6);
• ... the intention to establish a spectrum scheme to accelerate spectrum management changes (s4.18);
• ... the intention to make the process of transferring licences when businesses are bought less burdensome and cumbersome (s8.5);

... encourages the government ...

• ... to recognise that incentives through licence fee discounts must be provided for members of self management organisations (SMOs) to ensure their stability [to avoid the 'free rider problem' whereby non-members can claim access to the spectrum managed by the SMO under certain circumstances under the fees contained in the statutory regulations but without having to make any contribution to the running costs of the SMO](s9.4);
• ... to recognise that auctions are not a sensible way of allocating spectrum for use by self provided networks (s6.8);
• ... to recognise that secondary trading in a scarce commodity such as radio spectrum will simply lead to speculation and increased prices without improving spectrum efficiency (s8.3);
• ... to recognise that incentives through licence fee discounts must be provided for members of self management organisations (SMOs) to ensure their stability [to avoid the 'free rider problem' whereby non-members can claim access to the spectrum managed by the SMO under certain circumstances under the fees contained in the statutory regulations but without having to make any contribution to the running costs of the SMO](s9.4);
• ... to share the benefits of any licence fee funded research into improved spectrum management techniques with its private sector spectrum management partners (s4.19);
• ... consider more fully the International context of spectrum management since this has a large impact on the freedom of the UK to plan its own services, at all levels, ie allocation, assignment and licensing;
• ... to reconsider the role which spectrum pricing can have at the allocation level, otherwise large disparities will continue between different services [the constraints of international obligations are not always as great as might at first sight appear: for example, the UK successfully operates a mobile radio system in spectrum used by its neighbours for VHF television];
• ... to establish a standing advisory committee reporting directly to Ministers: the spectrum reviews have fulfilled an important role, but this function needs to be extended: this will be especially important if a spectrum scheme is implemented and decisions have to be made on its priorities, as well as crucial issues such as advice on the UK negotiating stance in international radio conferences where industry has large investments at risk, strategic UK frequency allocation policy, etc (s10.2) [The existing Radiocommunications Agency Steering Board does not have authority in such matters and is not constituted so to do: industry must have a clear voice.];
• ... to pursue more open access to the Radiocommunications Agency's databases to allow greater opportunities for organisations to engage in scenario planning (s10.3);

... but is concerned that ...

• ... safeguards for essential public services that use radio appear to be restricted to the public sector, which does not recognise those organisations which are under a statutory obligation to meet minimum service levels or whose operations have major implications for public safety (10);
• ... the framework for progressive spectrum pricing must include recognition that any changes must be implemented on a time scale commensurate with investment cycles in the industry, which may extend to ten years between initial concept and completion of the infrastructure in the case of national networks (s4.6);
• ... the detail of charging regime will be set in regulations, thus the enabling legislation will not limit the ability of government to subvert the sole intention of good spectrum management and use the legislation for tax raising purposes (s4.7) [The White Paper should define how fees will be set in areas where congestion is not a factor: the mechanism to differentiate between congested and uncongested areas: the way in which services will be elevated to 'congested' status and returned to 'uncongested' status, and place an overall ceiling on the sum that can be levied through licence fees];
• ... the White Paper provides numerous examples of increased licence fees, but no examples of reductions (s5.6); no examples of the 'substantial discounts in areas where spectrum pressures are less' are given (s7.13)(s7.16);
• ... industries facing intense price competition and those regulated through 'RPI-X' formulae must have confidence in the long term price stability of access to the radio spectrum: licence fees for areas not subject to congestion should thus be subject to 'RPI-X' price controls based on the current fee scales;
• ... no quantitative measures for congestion are proposed; the parameters and mechanisms for designating areas as congestion zones, and reversion from the elevated status back to uncongested areas must be defined (s7.15);
• ... the White Paper only considers the Smith/NERA study option of 'least-cost practical alternative' [the impact of a strict commercial value or straight £/kHz for all services, etc ought to be assessed (s7.5);

... and objects most strongly to ...

• ... the initial targeting of mobile radio and fixed services when radio fixed access and broadcasting are both areas of intense excess demand over supply (s5.6);
• ... the inequity of treatment proposed between national private business radio users and public access mobile radio operators using identical technology, operating with the same spectrum efficiency, and having similar business requirements: but where the former will pay £16,000 per national 2x12.5kHz channel and the latter £9,400. If the objective is spectrum efficiency, there is no justification for this difference.

Adrian Grilli
Managing Director

Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

Joint Radio Company Limited

JRC Response to the ERO's Detailed Spectrum Investigation Phase II Report

Introduction

The Joint Radio Committee of the Fuel and Power Industries (JRC) had existed for some 30 years, principally serving the interests of the coal, gas and electricity industries. It protected the member companies' operational and emergency radio communications interests via committee structures and ensured the best allocation of radio spectrum. Whilst the JRC had performed its role well, modern business and the changing regulatory scene require an organisation that is legally constituted. JRCL was formed in November 1994 by British Gas plc and the Electricity Association (On behalf of its members, the UK electricity companies). JRCL members operate a variety of communications infrastructure on a regional and national basis; these include trunk microwave, radio based telemetry and telecontrol, as well as professional mobile radio services. The latter two services both VHF and UHF spectrum. All the services are essential to the safe operation and control of the regional and national energy supply networks) particularly in times of stress, such as abnormal weather conditions or other emergencies, as well as providing for the member's business needs.

The Response

This JRCL response to the DSI Phase II document is being made in two parts. The first makes direct comment on some of the Recommendations and their effect on the Utilities represented by JRCL, and the second provided a JRCL view on the strategy for growth and change in mobile radio systems.

1: Comment on DSI Phase II Recommendations

General

REC2

The criteria in paragraph 2a should not be solely based on economic factors and should also consider the existing use of candidate spectrum and its suitability for the future needs of the current user particularly where technological developments can increase spectrum efficiency and meet the medium term needs of the Users.

It is difficult to imagine an agreement being reached on the composition of a standard formula to compensate users of radio systems when they are being asked to relocate to new spectrum. Such an arrangement may ultimately provide the only solution> although a resolution to the issues surrounding Security of Tenure i.e., operators and users moving to new spectrum being given fixed terms of tenure, would enable more effective medium and long term planning.

REC4

It is accepted that the radio spectrum will continue to be managed by the National Agencies, however, the JRCL support the delegation of responsibility for planning and frequency management to specialised groups or organisations. The JRCL has placed great emphasis on efficient use of spectrum and is able to demonstrate the benefits of good frequency planning. However, further developments and new techniques will only be pursued by organisations like JRCL as a result of increased demand from users and, in funding such development member Companies must be assured that they will be allowed to realise the full benefits.

Mobile Service

REC 18

The principle of spectrum harmonisation is to be encouraged particularly within Professional Mobile Radio. However, harmonisation at a European level will mean it is necessary for Professional Users to co-ordinate lobbying at a European level and it may lead to the requirement for a European co-ordinating body for Professional Mobile Radio users, similar to JRCL.

REC 20

There may well be a clear demand for civil commercial TETRA spectrum in the sub-bands 410-430 and 450-470 MHz. However, the JRCL would reinforce the need to provide adequate protection for the Scanning Telemetry Services operated by each of the major Utilities the Gas, Electricity, and Water Industries. These systems are essential for the safe, reliable operation of major items of plant in these Industries.

Fixed Service

REC 36

The JRCL wish to restate that there is a prime need to protect Scanning Telemetry and there is no case for this service becoming a secondary user. The scanning telemetry systems are based on mobile technology, the outstation unit is effectively a UHF mobile and the scanning station a UHF duplex base station, and the engineering of the radio propagation paths may well be subject to obstructions in a similar manner to mobile services. We are very concerned that rationalisation of spectrum at European level may threaten these services.

These systems are used for the control of substations, valves and flow monitoring points and the imposition of a move to higher frequencies would create severe problems and in controlling these assets to provide safely essential services within the UK.

Mobile Satellite Services

REC 38

The pressure being exerted at a European and World level for the allocations of spectrum at 148-150.5 MHz for 'little LEOs' is of major concern to the JRCL. In preparation for WARC 95, the Radiocommunications Agency and the JRCL have spent much time and effort concluding a satisfactory arrangement for coexistence between 'little LEOs' and existing JRCL Band services operating in this spectrum. This recommendation could cut across these arrangements. It is essential that in determining the "policies and priorities" for 'little LEOs' and existing services, there is the widest possible consultation to include the users of existing spectrum.

2: Accommodation of Growth and Change in Radio Systems

It is likely that the present rules of innovation and demand for radio based service will continue to grow, with increasing demands on the spectrum on a global scale. It has been possible in the past to look to 'new frontiers' in the form of ever increasing frequency to accommodate new services. While the higher frequencies have properties which have matched the needs of the new services i.e., the high UHF frequencies for micro-cellular, there tends to be parts of the spectrum which best suit certain applications, and there can be expected to be greater pressure on those parts of the spectrum. As a result of the increasing demand greater emphasis will be needed on the redevelopment of bands to accommodate services which use the spectrum more efficiently (in terms of E/km2/Hz and some data equivalent). To accommodate growth in this way will require a higher degree of planning than has been practiced before and will need the establishment of criteria to ensure a degree of fairness in the treatment of those who wish to make use of radio spectrum.

It is suggested that there are four main elements required in such a strategy:

i. An overall plan for rationalisation of spectrum planning towards a cycle of re-development to accommodate an on-going increase in the use of radio spectrum. The concept of permanent allocation is not compatible with the process of improving spectrum utilisation efficiency and hence accommodating growth in services and traffic. While today's arguments are for the provision of spectrum for, in the case of PMR, digital trunked systems, TETRA, there is a strong possibility that in another 10 years the range of services demanded by PMR users will have expanded and the technology available to support them in a more spectrally efficient way will have been developed, so that there will be a need for spectrum for yet another new system. Since 10 years is along time in terms of radio technology and the development of new systems, yet is short in terms of spectrum planning, the spectrum planning process needs to allow for the changing user demand and technological solutions.

1. An overall plan for rationalisation of spectrum planning towards a cycle of re-development to accommodate an on-going increase in the use of radio spectrum. The concept of permanent allocation is not compatible with the process of improving spectrum utilisation efficiency and hence accommodating growth in services and traffic. While today's arguments are for the provision of spectrum for, in the case of PMR, digital trunked systems, TETRA, there is a strong possibility that in another 10 years the range of services demanded by PMR users will have expanded and the technology available to support them in a more spectrally efficient way will have been developed, so that there will be a need for spectrum for yet another new system. Since 10 years is along time in terms of radio technology and the development of new systems, yet is short in terms of spectrum planning, the spectrum planning process needs to allow for the changing user demand and technological solutions.
   
   
2. A range of cost mechanisms within the licensing fee structure which reflect the user of the spectrum's readiness to adopt more efficient techniques. i.e., a user who is prepared to adopt more efficient technology early would pay a low or zero licence fee, whilst those who hold on to spectrum when it was needed for a more efficient service would be subject to a licence fee which increased as the inefficient use was perpetuated. This approach is put forward in the context of overall license fees reflecting the costs of spectrum and administration
   
   
3. To attempt to maintain an equal standard between widely different usage's i.e., broadcasting, defence, PAMR, PMR, Cellular. It is unreasonable to expect one sector of users to incur significant costs in changing to more efficient techniques while another user remains static and holds onto old technology
   
   
4. This process of planned change has to take account the large sums invested by companies and the individuals depending on the service, so that adequate planning times are used. Too short and return on investment is not realised, too long and progress and growth is inhibited.

It is important to recognise the need for spectrum planning as a cyclic activity, rather than as an ultimate solution. Continuous change requires that there is always a part of the spectrum where services are being phased out before a new technique is introduced, and hence that there is a percentage of each band which is following at some stage to accommodate the ongoing process of change.

Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

JRC Response to the RA's Consultative Document entitled
"The Future Management of the Radio Spectrum"
Summary

INTRODUCTION

The purpose of this response is to formally present JRC views on the issues raised in the Government's consultative document on Future Spectrum Management. The response is sub-divided into two sections.

• Section 1: Executive summary of JRC views on all major issues. {15kB}
• Section 2: Specific response to each of the Government's proposals with an appropriate explanation. {34kB}

CONTENTS

SECTION 1

1. General
2. JRC's experience
3. Spectrum re-working
4. Coping with varying pressure for channels across the spectrum
5. The JRC's basis for the prediction of traffic growth
6. In conclusion

SECTION 2

1. Current RA Spectrum Management
2. Shortcomings in RA
3. Further Specific Actions
4. Have existing SMOs been successful in spectrum efficiency
5. Is there further scope for extending self management
6. Commercial SMOs and hence partial privatisation ofspectrum management
7. Would a commercial SMO lead to greater efficiency and/or greater end user satisfaction
8. What problems with management rights of SMO
9. Is there a need for an independent advisory committee
10. Is more open access desirable
11. Would any of the factors given below either singly or in combination form the basis for setting fees
12. What would the advantages/disadvantages be
13. Would administrative pricing have any advantage over auctions
14. What benefits/drawbacks of auctioning management rights to a commercial SMO
15. Benefits/drawbacks of direct auction to end users
16. Benefits/drawbacks of auctions only in congested bands
17. The need for safeguards for 'assured market access' for certain services
18. Scope for safeguards against market abuse
19. What rights of spectrum access and security of tenure would be given
20. Would a secondary market encourage re-sale of unused spectrum
21. Would a secondary market promote more efficient use
22. Would a secondary market make it easier for existing and potential users to acquire spectrum
23. How far should RA retain the enforcement role
24. How far should SMOs be given an enforcement role
    • 24b Should action be in users hands through civil court action
25. What factors should determine spectrum prices
26. How could SMOs be encouraged and what role could they play
27. What core spectrum management functions need to be performed by government
    • Comments on overall plan for reform as described in Chapter 8

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Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

Response to the RA's Consultative Document entitled
"The Future of the Radio Spectrum"
Section 1

Summary

Section 1

1. General
2. JRC's experience
3. Spectrum re-working
4. Coping with varying pressure for channels across the spectrum
5. The JRC's basis for the prediction of traffic growth
6. In conclusion

Section 2: Specific response to each of the Government's proposals with an appropriate explanation {34kB}

1. General

As is pointed out in the Frequency Management of the Radio Spectrum consultative document, the JRC has worked co-operatively with the RA and its predecessors for many years carrying out detailed frequency assignment for its fuel and power industry members. This is an arrangement which both RA and JRC consider has worked well, but it is relevant to the present consultative process to critically review the difficulties which have had to be overcome and what the important issues for the future are considered to be.

2. JRC's experience

It is the general perception of JRC members that they are subject to a near continuous process of change, and uppermost in their minds is the issue of security of tenure. In the 35 years of the JRC's existence there have been two major changes of band to accommodate growth in the PMR traffic, together with changes in fixed link assignments and the introduction of a scanning telemetry service. The first fuel and power PMR services used 100kHz channels, and while the previous and current PMR schemes have used 12.5kHz, the JRC has been one of the organisations, along with the RA, to sponsor research work in Linear Modulation 5kHz systems.

Whereas expansion of service can be possible within a spectrum allocation, this has never occurred in the JRC's PMR bands due to either a lack of available spectrum or external competition for the frequencies in use. Ideally users need the ability to expand capacity and have security of tenure. To achieve this, or at least get close to it, there needs to be longer term planning at all levels, from the system user, the JRC, RA, and international co- ordination. In the most recent PMR change it was the needs of a different service, broadcasting, which resulted in a change from what had been thought to be stable allocations capable of expanding the number of channels available, when justified by traffic, within the band without any complexity. It was a change which reduced the available spectrum at a time when traffic was increasing resulting in a higher cost system. It does raise the question of whether the disturbing party should contribute to the costs of change for the disturbed party in such circumstances.

Overall it is considered that there should be greater recognition of the balance which has to be struck between wanting security of tenure of the spectrum and the effect of ongoing traffic growth in leading to a need to change at some stage.

The experience of managing continuous expansion of radio systems has shown the JRC that a principal issue, in the higher levels of spectrum management, is achieving a balance between the two conflicting needs of obtaining a sensible and economic lifetime from installed systems as against being able to expand system capacity.

3. Spectrum re-working

While in the early stages of radio systems it is possible to open up new spectrum, and generate new channels, subsequent expansion has to be through re-working of the spectrum. This of course presents an additional level of complexity for the overall spectrum manager. In the JRC's submission to the 3rd Spectrum Review Committee it was argued that despite the intensive adoption of measures to improve spectrum efficiency with the current PMR band it could be anticipated that there would be sound justification for requesting fresh spectrum to replace the current system at the turn of the century or in the early years of the next decade, to accommodate greater traffic through the adoption of even more efficient modulation and re-use techniques.

The JRC does not believe that it will be unique in experiencing the need to satisfy traffic expansion, so that the issue of long term planning of spectrum reworking in a phased way need to become a part of the overall spectrum managers strategy. The techniques for coping with re-working of the spectrum need to worked out in the immediate future since there will need to be some percentage of the overall spectrum kept fallow to accommodate a process of change. To date there has been a tendency towards total allocation of the spectrum as if once fixed, applications, technology and demand will stay frozen.

A strategy for re-working of spectrum needs to be developed which will provide a long term planning mechanism which will allow re- working of spectrum to be applied according to the demand which actually materialises. This strategy needs to be sufficiently flexible to allow effective usage of the spectrum whether spectrum demand continues to grow at its present rate or is completely static. The key to this is thought to be ensuring that there is spectrum kept available for migrating systems from early, low spectrum efficiency system to higher efficiency systems.

It will be necessary to consider how such a policy of increasing spectrum efficiency would affect various classes of users, particularly the extremes of high growth and declining use. The user with high traffic growth will be looking for ways to increase the capacity of their system at minimum cost, which will usually imply the need to gain full economic life from already installed equipment. The first preference would be to be able to expand the installed system, generally easiest with more channels adjacent to the existing allocation. The next best is probably to increase infrastructure investment and greater re-use of the available channels. If new technology is to be used to achieve the necessary increase in capacity then it will be generally preferable to allow a substantial overlap in time of old and new systems. In the case of the static or declining user, they would no doubt see no need for change and would be content with their relatively low spectrum usage efficiency, yet they should be subject to the same timescale for change as the user with growth.

In order to achieve long term planning, in the ten to fifteen year period, it will be necessary for growth in demand for capacity to be projected into those timescales. Clearly such estimates would be speculative, but subject to on-going review. Steps to implement change would be dependant on evidence that growth was in line with earlier predictions and detail of the traffic anticipated. (or channel quality in the case of broadcast). The long term forecast would be used only to establish that the mechanisms for re-working of spectrum could cope with that possible demand. The provisional assignment of spectrum to particular purposes would be a decision in the intermediate range, perhaps five to seven years, where the capacity predictions are more realistic and the potential of the technology to provide the type of channel in a suitably spectrum efficient way can be set as a target. Research and development of new systems takes several years, so that firm decisions on new allocations probably need a minimum of three years prior to introduction.

4. Coping with varying pressure for channels across the spectrum

It is suggested that RA develop a policy for introducing more spectrum efficient technology in the band(s) subject to greatest pressure. This is an approach which could give operators and users a choice between a high spectrum efficiency solution in prime spectrum or a lower cost solution in less popular bands. This is described in more detail in the answer to Question 11. It is argued that a policy, arrived at by consensus, which identified the band(s) in greatest demand would also attract the necessary investment to ensure that equipment embodying the necessary technology became available.

As an organisation which has been concerned with ways of expanding the capacity of the spectrum available to it, the JRC is also aware of the costs which can be incurred by working towards higher spectral efficiency rather than just using more channels to expand the capacity of a simple configuration. While the previous paragraph was concerned with development primarily within a class of usage, i.e. mobile, it is more difficult to ensure balance between widely different usages such as broadcasting, defence and public services. It is thus considered that the RA, and ultimately Parliament, should be the arbiter to ensure an equitable policy of moving towards higher spectrum efficiency by the all users of the radio spectrum.

The JRC believes that there will continue to be expansion of existing services and demand for new services, both within its own domain and in society at large, and that the complex issue of opening up the remaining new spectrum and the re-working of old spectrum, the balancing of widely differing requirements, the transitions between systems, the need for the development and implementation of standards, and the need for close co-ordination within Europe, all lead to a greater role for RA. Because this high level spectrum management role would be to the eventual benefit of all users, it would be appropriate for this extra work to be financed out of licence revenue or spectrum fees.

5. The JRC's basis for the prediction of traffic growth

The JRC's views of the likely growth in traffic demand is based on the understanding within its member organisations of the changes in organisational needs, the potential of information systems in the field and the technical potential of radio to provide a wider range of services than simple voice communications. As enablers of radio communications to the Gas, Coal and Electricity industries we are vitally concerned in continuing to provide a service which is of central importance to the economy and on which, in critical situations, life can depend. We would look forward to the JRC taking on the role of an SMO to manage the PMR, Scanning Telemetry and remote meter reading services of its member industries. We need to be able to support the industries in their quest for more effective work practices through improved communications in the future, and hence to be able to expand capacity. We don't expect to be alone in wishing for expanded capacity, and want to see mechanisms developed which will ensure economic and efficient use of spectrum for all with a justifiable need. It is in this context that RA can play a vital role in looking across the whole range of radio users, present and future, to map out the strategies which would be needed if these traffic estimates become firmer and the potential users come forward with sound basis for their requests for capacity expansion.

6. In conclusion

The JRC considers that there will be continued pressure on the spectrum and that in order to ensure that there is equitable access for all with a reasonable claim to the use of radio, that there needs to be greater effort put into the long term planning and co- ordination of the spectrum. This includes encouraging the development of spectrum efficient technologies and the methods of handling a more dynamic spectrum allocation strategy, albeit on a long time scale. While these are roles for RA, the more detailed and day to day aspects of spectrum management appear appropriate for delegation to spectrum management organisations.

The JRC would seek to administer its existing allocations and to ensure that the JRC members considerable concern with the issue of security of tenure are addressed. These concerns are based on requiring their radio services to maintain essential services in emergency situations.

Administrative pricing, based on bandwidth usage, to reflect spectrum efficiency, and at a level to finance the planning needed to achieve ongoing availability of spectrum, is the preferred way forward. This would achieve the greatest availability of spectrum and hence create the capacity needed for existing services to expand and new services to be created.

There are many issues of detail which the JRC would like to believe that its experience could contribute to and would like to offer its participation in any further discussions with RA/DTI.

Joint Radio Company Ltd.

Independent Radio Spectrum Management for the UK Energy Industry

Response to the RA's Consultative Document entitled
"The Future of the Radio Spectrum"
Section 2

This section gives a specific response to each of the Government's proposals with explanation and should be read in conjunction with section 1.

(NB: The responses in this section have numbers that correspond to the numbers of the paragraphs in the Consultative document. To avoid confusion, these numbers are given in brackets. The first number refers to the summary chapter, the second to the main body of the document.)

Summary

Section 1: Executive summary of JRC views on all major issues. {15kB}

SECTION 2

1. Current RA Spectrum Management
2. Shortcomings in RA
3. Further Specific Actions
4. Have existing SMOs been successful in spectrum efficiency
5. Is there further scope for extending self management
6. Commercial SMOs and hence partial privatisation ofspectrum management
7. Would a commercial SMO lead to greater efficiency and/or greater end user satisfaction
8. What problems with management rights of SMO
9. Is there a need for an independent advisory committee
10. Is more open access desirable
11. Would any of the factors given below either singly or in combination form the basis for setting fees
12. What would the advantages/disadvantages be
13. Would administrative pricing have any advantage over auctions
14. What benefits/drawbacks of auctioning management rights to a commercial SMO
15. Benefits/drawbacks of direct auction to end users
16. Benefits/drawbacks of auctions only in congested bands
17. The need for safeguards for 'assured market access' for certain services
18. Scope for safeguards against market abuse
19. What rights of spectrum access and security of tenure would be given
20. Would a secondary market encourage re-sale of unused spectrum
21. Would a secondary market promote more efficient use
22. Would a secondary market make it easier for existing and potential users to acquire spectrum
23. How far should RA retain the enforcement role
24. How far should SMOs be given an enforcement role
    • 24b Should action be in users hands through civil court action
25. What factors should determine spectrum prices
26. How could SMOs be encouraged and what role could they play
27. What core spectrum management functions need to be performed by government
    • Comments on overall plan for reform as described in Chapter 8

Q1 Current RA spectrum management (1.5, 4.25)

JRC expectations of RA have been in terms of overall spectrum allocation rather than detail assignment, and the difficulties which have been experienced over the years have related to not enough emphasis or effort being put into long term frequency planning. The root cause of these difficulties have been at the international level, where it is acknowledged to be difficult to balance the needs of vastly different users, and the different national attitudes with a far looking view to the future. But, however caused, these difficulties have resulted in increased expenditure, a poorer communications service and ultimately less efficiency in the operations of the utility industries than might have been the case if the industries had the stability and capacity of radio systems they required.

Q2 Shortcomings in RA (1.5, 4.26)

The JRC believes that the challenges of achieving greater spectrum efficiency will require RA's role and funding to be enhanced.

Q3 Further specific actions (1.5, 4.26)

It is clear that pressure for more intensive use of the spectrum is continuing to grow, and in consequence the effort put into using the spectrum more effectively has to grow also. The consultative document has explored the ways in which market forces could be brought to bear, and has looked at activities in other countries who are adopting such approaches. It is, however, important to evolve a spectrum management policy which can cope with demand. The factors which are believed to be important are:

• balancing the demands and requirements of diverse users of spectrum, i.e. bro adcasting, defence, public and private services.
• ensuring that the pressure to improve spectral efficiency is shared equally by all users.
• coping with the re-development of spectrum over time to ensure that higher efficiency is practised by all users and not just the last comers.
• balancing the need for security of tenure with the need to adopt more efficient techniques.
• ensuring that co-ordination is maintained with Europe, with similar or compatible use of the various bands in the spectrum. Even if trans-European operation isn't needed, co-ordination is required to minimise long range interference problems.

A key problem is seen as the increasing pressure on parts of the spectrum by increasing traffic. With the availability of 'new' spectrum being severely limited there is a need to ensure re-working of existing spectrum, i.e. that already assigned and in use. This is considered to be a vital long term planning task for RA, so that if necessary, ongoing pressure over decades can be planned by ensuring that within sensible life spans of equipment a process of change can be facilitated to accommodate the growth of existing users and the entry of new users.

Q4 Have existing SMOs been successful in spectrum efficiency? (1.7-1.9, 5.11-5.12)

The JRC was faced with a reduced amount of spectrum in which its members needed to carry an increasing level of traffic, and only achieved this by adopting significantly more efficient spectrum utilisation techniques than before. In anticipating that its member industries will need to accommodate further increases in traffic demand, techniques for achieving significantly higher levels of traffic within the existing allocation are being studied. In the JRC's case it is considered that a degree of self management has resulted a spectrally efficient system, and will continue to do so.

In addition to its role of day to day management of its bands, it also brings together the long term issues being considered by its user industries. This brings into the long range planning process the essential element of end user and organisation requirements which is so often under represented. A combination of an understanding of current and long term requirements, with the issues of long term planning give an SMO a sound basis for spectrally efficient planning. For this to be fully effective however there needs to be an open interchange with the overall spectrum management body which can bring together the requirements from other users and potential users to balance their differing requirements and ensure a long term plan with the required capacity.

Q5 Is there further scope for extending self management? (1.7-1.9, 5.11-5.12)

As an organisation which believes it has been successful in the partial self management of its specific allocation of spectrum, the JRC sees this as potentially useful in other situations. It is also aware of the environment in which self-management is likely to successful and the limits to what can be expected of the approach. In particular the issue of balancing requirements and justifications amongst widely different classes of user, and the need to be able to re-work frequency assignments over the longer period, mean that the self-management functions need to be closely dovetailed into the responsibilities and functions of the RA.

Q6 Commercial SMOs and hence partial privatisation of spectrum management. (1.7- 1.9, 7.20-7.27).

The devolution of management to a commercial organisation, presupposes that there is stability with time and the commercial SMO isn't going to be subject to the re-working of spectrum as pressure continues to build for greater traffic.

The objective of spectrum management is to ensure the availability of radio spectrum to all those who have a need for it. There are cost mechanisms inherent in the process of adopting techniques giving greater spectrum efficiency, so that using commercial SMO's and market pricing mechanisms could distort the cost pressures which will inevitably exist.

Q7 Would a commercial SMO lead to greater efficiency and or greater end user satisfaction? (1.7-1.9, 7.24)

Presumably the perceived advantage of commercial SMOs is that potential users will pay what the spectrum is worth to them, and hence allow a 'market forces' balance of supply and demand to be reached. But is spectrum a sufficiently simple 'product' to be traded on this basis? One of the key characteristics of spectrum is the way it can be re-used more intensively by changing the RF design parameters of an overall group of co-channel systems, or alternatively change the channelling and, or modulation techniques to achieve higher capacity for a given bandwidth and area. It can be expected that pressure for spectrum will continue to grow and that spectrum will have to be re-worked with one or more of these parameters changing. The existence of a commercial intermediary could be anticipated as being more of a hindrance than a help in such a long term development, and would thus detract from overall efficiency. Since the objective must be to ensure that spectrum is utilised as efficiently as necessary to allow access to those who wish to use radio, then the commercial SMO could detract from efficiency.

It would be necessary to provide checks to ensure that the SMO didn't exploit its position, by being linked with a particular technique for spectrum usage and an organisation which supplied that technology.

Q8 What problems with management rights of SMO? (1.9-7.27)

A SMO could be even more sensitive to security of tenure issues, than the current users of systems, since the need to re-work spectrum would be a factor outside their control and would impinge on the SMOs financial credibility.

Q9 Is there a need for an independent advisory committee? (1.10, 5.8-5.10).

The major allocations of spectrum are between defence, broadcasting, emergency services, public services and a myriad of smaller but important users. It is in this context that there needs to be some arbitration between the legitimate but sometimes conflicting interests. This interests are at core just different facets of the needs of the community, and it is probably appropriate that the balancing of these interests are performed by a body such as the National Radio Spectrum Committee as suggested in the Stage 3 Spectrum Review. In general the JRC supports the views put forward in section 10.15 to 10.26 of that report for bringing together the various interests.

Because of the need to reconcile a wide range of national interests it is suggested that a Parliamentary Committee should be appointed to ensure that the structures operate in the overall public interest.

Q10 Is more open access desirable? (1.11, 5.27)

While some services may wish to keep channel and usage details from becoming public knowledge, there can be little argument against general details of what band is assigned to who being publicly accessible. The US context in which this is raised doesn't seem relevant to the UK.

Because of a low level of spectrum management there it appears that users do there own investigations of where a free channel might be. With the current reasonably effective spectrum management in the UK, access to detail information doesn't seem to be a significant issue.

It can be envisaged that issues of commercial confidentiality as well as security could be significant restraints on allowing unlimited access to information.

It is likely that SMOs would need to access RA databases and through RA to access those of neighbouring countries, in order that they can carry out their spectrum management effectively. This is particular important for co-ordination with other services, both in the UK and with our European neighbours.

Q11 Would any of the factors given below either singly or in combination form the basis for setting fees? (1.12-1.15 including sub questions a-e, 6.20- 6.27).

• By frequency band
• by spectrum used
• by channels used
• by degree of loading
• by efficiency of equipment
• by transmit power/coverage area
• by geographical location

Factors which appear relevant to determining administrative pricing. The JRC believes that it would be fair and equitable for spectrum fees to reflect the use made of the spectrum, with the basic dimensions of this usage being the product of bandwidth and area. Support for fees based on these broad principles assumes that the revenue raised is used to provide the overall spectrum management necessary to ensure that an equitable access to the spectrum for all who have a reasonable demand and that a policy of spectrum re-working is practiced which ensures improvements of efficiency in line with the growth of demand.

Fees proportional to the quantity of spectrum would seem to be fair approach particularly for major users where nation-wide use of the spectrum is involved.

In the case of limited area schemes the coverage area of a scheme is a significant factor in measuring spectral efficiency (Erlangs/Hz/km2 or bps/Hz/km2) In the case of two way schemes the coverage of both ends would be relevant (i.e. ensuring a balance of base and mobile power in a mobile system. Thus for limited area schemes, coverage area would be a valid basis for fees, although using effective radiated power would be easier to administer.

Taking up the theme of the stage 3 Spectrum Review, paragraph 11.36, it could be appropriate to include the 'protection factor' as a measure of the quality of the spectrum allocation.

Thus an allocation for an area would have associated with it a protection factor such as 'interference not exceeding -147dBW in 8kHz bandwidth for more than 10% of time for 10% of locations.' A practical approach would be to have segments of spectrum giving a range of quality of services, based on design protection ratio and hence density of frequency re-use, with a range of fees reflecting spectrum re-use.

One of the key questions is whether it would be useful to react to the popularity of some parts of the spectrum by loading the spectrum fees for the most popular sectors. On the basis that steps will need to be taken to improve spectrum efficiency to match demand for increased traffic and new services, and that there will therefore need to be a policy of re-working of the spectrum to bring this about, it is proposed that the use of higher efficiency techniques should be mandated in those parts of the spectrum subject to the greatest demand. The change to systems capable of greater capacity would involve users or provider organisations with significant costs, and would provide the stimulus to consider other spectrum which would allow a lower overall system cost. It is suggested in this way existing economic pressures could be utilised to balance the demand on the total spectrum while encouraging the drive for greater efficiency of spectrum use which will be the key to allowing existing users to continued access and growth while providing spectrum for new entrants. It would be necessary for the overall spectrum regulator to have set out a policy for meeting increasing demand with a policy of adopting increasing efficiency techniques in those bands where demand is seen to be exceeding available capacity. There would be a role in encouraging spectrum efficiency techniques, both through focusing R & D efforts to solve the technical problems, and through ensuring that the regulatory and spectrum management environment supports the more efficient radio system techniques and manages re-working of the spectrum to allow for the installation of new systems and the phasing out of old in time scales which permit the economic life of existing systems to be achieved.

For microwave links a complex method based on bandwidth might be derived.

Through the use of spectrum pricing reflecting the frequency and spatial dimensions of usage, in which the revenues derived are used to fund the spectrum management process, together with regulation to set spectrum efficiency standards, a reasonably costed method of ensuring expansion of spectrum efficiency and capacity could be achieved.

Q12 What would the advantages/disadvantages be? (1.15, 6.20-6.27)

By selection of parameters appropriate to the tenure of spectrum, administrative pricing could be tailored to reflect the basis of efficient spectrum utilisation. For major users a charge based on spectrum occupied and the band which it is in would provide an incentive to develop spectrally efficient systems within the spectrum they occupy. For smaller uses, not using channels nationally then it would be appropriate to base the fee on bandwidth occupied, and the area of coverage, related in some way to the measure of E/Hz/km2, or E/Hz related to population density.

Q13 Would administrative pricing have any advantage over auctions? (1.15, 6.20-6.27)

Auctions put the decision making as to the value of spectrum directly or indirectly, into the hands of the providers of the communications service. This provides a very simple mechanism although it is expected that a variety of safeguards would have to be incorporated to avoid abuse. However the simplicity of the mechanism is likely to be ill suited to the complexity needed to deal with the variety of different uses to which radio can be put. The balancing of security of tenure with the need to move on to more efficient systems requires on going assessment of rate of traffic growth, the requirements of current occupiers of spectrum and the demands of potential new users. The use of administrative pricing reflecting spectrum efficiency principles, and used to finance the necessary strategic and detailed planning by RA, and SMOs where appropriate, is thought to be an approach which will give the stimulus to the highest growth to radio capacity with maximum benefit to the community.

It is noted that the FCC has recently ruled that spectrum pricing will be targeted at service providers only, and not private users.

Would auctions improve spectrum management? (1.17 -1.19, 7.58)

Bidding processes provide a simple mechanism for allowing potential system operators to express their valuation of the spectrum and hence how confident they are that they can make efficient use of it. Such a simple approach does not take sufficient account of the long term nature of increasing the capacity of the radio spectrum. The overall balancing of the requirements of various current and future potential users requires a high level administrative input to assure even handed treatment of the diverse users of radio. In addition to the opening of new spectrum it is highly probable that current bands will require to be re-worked to achieve higher spectral efficiency. It is anticipated that an efficiently administered system, funded from spectrum use fees, would provide radio spectrum accessible to the wide range of potential users, with overall greater efficiency and capacity, and at lower cost to all users, than could be achieved by an auction system

Q14 What benefits / drawbacks of auctioning management rights to a commercial SMO?

Q15 Benefits/drawbacks of direct auction to end users?

Q16 Benefits/drawbacks of auctions only in congested bands?

Q17 The need for safeguards for 'assured market access' for certain services?

Q18 Scope of safeguards against market abuse?

Q19 What rights of spectrum access and security of tenure would be given? (1.17- 1.19, 7.39-7.58)

The questions 14 through to 19 relate to the detail of auctioning, and the comments given here relate to the overall issue of auctioning. As has been commented elsewhere in this reply, the complexity of the issues of achieving continuing improvements in spectral efficiency demand a central co-ordinating role. The use of a simplistic mechanism such as competition for spectrum through auctions would detract from the achievement of spectral efficiency. It would tend to a method of 'rationing' on the basis of price, rather than regarding spectrum as a resource which can be re-worked to yield increasing traffic capacity to meet the demands which may be placed on it in the coming decades.

If the Government were looking for novel methods of generating revenue, then, as the quoted Polish and Mexican use of auctions indicates, auctions can indeed be used to translate spectrum into money, however it is understood from the consultative document that is not the intention in the UK.

Q20 Would a secondary market encourage re-sale of unused spectrum? (1.20-1.22, 7.8-7.13)

It is presumed this relates specifically to individual schemes using spectrum in a limited geographic area, where there is a diversity of small users looking for a frequency-space slot for there own limited scheme. Even in this limited situation it is thought likely that an efficiently administered system would provide a more effective mechanism for re-allocating spectrum.

Q21 Would a secondary market promote more efficient use? (1.20-1.22, 7.8-7.13)

As above, the use of a balanced spectrum fee to fund an efficient administration of frequency-space slots is thought to offer more efficient usage.

Q22 Would a secondary market make it easier for existing and potential users to acquire spectrum? (1.20-1.22, 7.8-7.13)

An efficient administration is thought to be able to offer both existing and potential users a more effective way of acquiring unused or under used spectrum. In simple financial incentive terms, the difference between not paying the administrative fee, as against being able to sell 'rights' to redundant spectrum is not thought to be significant. The single approach to spectrum administration is likely to give better administration and a greater availability of spectrum to users.

Q23 How far should RA retain the enforcement role? (1.23, 7.28-7.38)

Please refer to the answer to Q24

Q24 How far should SMOs be given an enforcement role? (1.23, 7.28-7.38)

It is probably administratively efficient for a SMO to be the first line of enforcement of delegated licence enforcement powers, but that the ultimate powers of enforcement need to reside with RA.

Q24b Should action be in users hands through civil court action? (1.23, 7.28-7.38)

This seems to be an answer to a lawyers prayer.

Q25 What factors should determine spectrum prices? (1.24-1.29, 8.7)

It would seem reasonable that the cost of ensuring that effective spectrum management can be achieved, both current and into the future, should form the basis of the overall income required and hence the determining factor in the total income required from spectrum charges.

The underlying measure of spectrum utilisation is the use of bandwidth per unit area (Hz/km2). For large scale users, and where an SMO acts on behalf of a group of users, then allocation can be on a national basis and the spectrum charge would be based on bandwidth used UK wide. For users wanting spectrum over a limited area, then the definition of what area to use has to be resolved, and this possibly could be in terms of the area over which signals capable of creating significant interference can exist. This would need to be generalised to a workable measure, such as the effective radiated power of the transmitter.

The differences of radio propagation over the range of frequencies, mean that some services are easier and cheaper to implement in particular bands. Typically wide area coverage mobile communications is easiest and cheapest at VHF. The central theme of the consultative document is that market forces should establish what users are prepared to pay for any part of the spectrum, and even where auctions or similar market mechanisms are not used the level of pricing would be based on the market test values. It is implicit in this argument that the higher price a user or commercial SMO pays, will cause them to develop more spectrally efficient systems, to allow more users onto that spectrum. The costs of changing to more spectrally efficient techniques are high and with spectrum pricing determined by a market forces mechanism it can be anticipated that the levels of spectrum price will be correspondingly high. This could be expected to have two major impacts, one on increasing the costs to end users, and also to raise the threshold below which potential applications of radio will be turned away. In effect introducing a form of rationing by pric