Liberal Spectrum Management

1. Liberal Spectrum Management Andreas Orr Askland Legal Adviser Frequency Department Norwegian Post and Telecommunications Authority

2. Background • “Command and control” • Static approach • Strict connection between radio service and assigned frequency band/channel • Last decades stronger focus on international harmonization of frequency usage • transition to spectrum management based on user needs (trading/flexible use)

3. Norwegian spectrum reform • For many years based upon traditional frequency management principles • In the beginning of the present millennium NPT took initiatives to a significantly more flexible management scheme, in order to: • increase competition • increase assignments and utilization • reduce management costs and red tape • reduce transaction costs • potentially increase the value of the spectrum and the benefits for end users and the society at whole

4. Frequency management • ”The user oriented model” • User = licence owner • Companies/operators have a much better knowledge than the regulator of the end users needs • Know how these best can be accommodated through choice of technology and organization of the service provision • Let these companies/operators have a greater freedom of choice and the ability to administer the frequency resources in a flexible manner • Technology and service neutrality management

5. Technology neutrality • Licence not restricted to a specific technology • The licensee chooses freely from the beginning which technology to use and may also decide later to change the technology in use • Must comply with spectrum mask defined at the band edge, unless otherwise agreed with neighbouring licensees • The “mask concept” is not completely neutral Most spectrum licences awarded by the NPT since 2000 are neutral in this respect

6. Service neutrality • No (or few) restrictions on what type of service is allowed in the frequency band assigned • Often connected to whether mobility is allowed or not

7. Harmonization vs. flexibility • Harmonization has shown to be a good thing – in justified cases • It is not necessarily a “solution for everything” • May impede innovation • Unused/unassigned spectrum for years and years • Small vs. big markets, “one size does not fit all” • Harmonization does not need to be forced upon the market • Voluntary harmonization comes naturally in evolved markets

8. General procedures in licensing • “Open, transparent, non-discriminatory” • Anyone can apply for vacant spectrum or for spectrum in which existing licences expire in less than 3 years • Information in anonymised format about received applications is published (“polling of demand”) • Other interested parties may come forward • Auctions are the default means of assigning spectrum when demand for spectrum exceeds supply

9. Transparency • Information on the status of frequency assignments shall be updated and available for all • NPT has a list of vacant frequency resources • Also a list of assigned frequencies (spectrum licences) and the identity of the users they are assigned to • The NPT frequency portal is continuously being updated

10. Auctions • Previously, the initiative for auctions was taken by the authorities • Except for special cases, auctions will be triggered by an application for spectrum • Publication of the application received  further parties showing interest  not enough spectrum for all  authorities announce that auction will be held and define auction rules • Auctions announced and interested parties invited to bid according to defined rules

11. 2.6 GHz auction • Auction originally planned for April 2007, but postponed to November 2007 – first in Europe • Public consultations: • September 2006 (CEPT band “centre gap”) • April 2007 (mainly spectrum cap) • July 2007 (band plan, spectrum masks) • Technology neutral approach – spectrum opportunity for UMTS/IMT as well as other technologies • Regional plan, Norway divided into six regions • Deviation from the CEPT plan, increased possibilities for unpaired spectrum • Auction over the Internet. Software provided by DotEcon

12. Frequency band plan

13. Incumbent operator 2G/3G Mobile operator 2G/3G Awarded to Hafslund in a single bid auction in February 2008 Results

14. Trading of frequency licences • A “market” for frequencies • No restriction on what can be traded • Licences may be divided geographically, spectrally, in time or in “layers” • A licensee may hire out frequencies • Some forms of trade must be notified and approved by the authorities • Challenge: Who owns which licence? • In order to trade efficiently, the market needs a means to get hold of this information

15. 2.6 GHz - Trading

16. Prices • High compared to previous technology neutral auctions €0.033/MHz/population • 3.5 GHz raised €0.0076/MHz/pop • Swedish 2.6 GHz raised approx €0.137/MHz/pop • Difference in competition in the 3G market • More “equal” market players in Sweden • Finland €0.0031/MHz/population • The Netherlands €0.00132/MHz/population

17. Summary: Liberal Spectrum Management • The user oriented model • Neutrality • Few restrictions • Tradability • Shortest possible time to assign licences • Easy to access information on web • Promote technology neutral regulations in international negotiations

18. Thank you for your attention www.npt.no www.frekvensportalen.no