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ERG/RSPG Joint Session Göteborg, Sweden ‘Spectrum Policy for the Many Possible Futures of Broadband in Europe’ February 27 2008. Martin Cave Warwick Business School, UK Martin.Cave@wbs.ac.uk. The Issue is High Speed Broadband. Platform Endowments in Europe.
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ERG/RSPG Joint SessionGöteborg, Sweden‘Spectrum Policy for the Many Possible Futures of Broadband in Europe’February 27 2008 Martin Cave Warwick Business School, UK Martin.Cave@wbs.ac.uk mec1595
Platform Endowments in Europe 2F + W Upgraded cable system, ubiquitous DSL, 3G networks (30-40%) F + W (Near) ubiquitous DSL, 3G (50-60%) W Wireless only- 2G/3G (3-8%) mec1595
What Triggers NGA Investment? • Revenue loss to current competitors • Fear of pre-emption by rival NGA • Regulatory certainty (cf. Australian approach) • Prospect of adequate (non truncated) return mec1595
Key Issue for Regulators How many competitors are enough? • 2F + wireless (US generally, WBA in Malta) • ≥ 4 (Ofcom WBA notification) mec1595
Intermediate Regulation in the Absence of Effective Competition Access with • higher cost of capital • pricing flexibility • limitations on capacity of mandated service (basic or ‘anchor’ product only) • limitations on PoI- but the ‘ladder’ may be broken. mec1595
The Role of Wireless Uncertainty about future capabilities Competitive platforms: • LTE (long term evolution) • WiMax • UMB (ultra mobile broadband) Whether it is the only option or a competitive constraint, wireless opportunities must be maximised. mec1595
Making Spectrum Available on Flexible Basis • Minimum restrictions on existing assignments • Refarming regimes to minimise downtime • Licensing of additional spectrum as quickly as possible, without restrictions on use • Minimising impediments to trade and change of use • Consider synchronising transactions- the ‘big bang’ mec1595
2007 mec1595
The UK Frequency Allocations 20XX? Not Allocated 3kHz Not Allocated Not Allocated Not Allocated Not Allocated 300 GHz mec1595
The contribution of the public sector • Public sector users account for about half use of ‘beachfront spectrum’ in the EU • Typically, they- especially defence ministries- are subject to little scrutiny • Option 1-encourage spectrum release by monetary incentives and spectrum pricing • Option 2-make them part of the market system , as buyers or (more plausibly) sellers • see www.spectrumaudit.org.uk mec1595
What Level of Harmonisation in the EU? • Focus on harmonisation of spectrum management techniques, not harmonisation of spectrum use • De facto harmonisation will follow from manufacturer/operator interaction, subject to competition • EU power needed to harmonise tradable frequencies etc. • Digital dividend is a test case. mec1595