The views expressed in this paper are those of the author and do not necessarily reflect the opinions of the ITU or its

1. Radio Spectrum Management for aConverging World Eric LieTelecommunication Development BureauITU ITU-WTO Workshop on Telecom and ICT RegulationGeneva, Switzerland1 - 7 December 2004 The views expressed in this paper are those of the author and do not necessarily reflect the opinions of the ITU or its Membership.

2. Presentation Overview • Introduction to spectrum management • Role of spectrum management • Int’l and national regulatory frameworks • Market-based approaches to spectrum planning • Auctions, secondary trading, administrative incentive pricing and license-exempt use • Policy and regulatory aspects of advanced wireless technologies • Spread spectrum, Ultra Wide Band (UWB), software defined radio, agile radios, etc.

3. Role of Spectrum Management • Technical efficiency • Minimizing interference • Economic efficiency • Allocating and assigning spectrum to its most economically valuable use • Harmonization • Public policy • Public services (e.g. Public broadcasting, safety, defense, etc.), Technological diversity Introduction to Spectrum Management

4. International Framework • ITU • World Radiocommunication Conference (WRC) • Table of Frequency Allocations • ITU Radio Regulations • Regional Organizations • Regional co-ordination • Harmonization • e.g. European Commission • Bilateral Agreements • Cross-border co-ordination Introduction to Spectrum Management

5. National Framework • Spectrum planning • Allocation (“Band Plan”) • Table of Frequency Allocations • Assignment (“Spectrum licensing”) • “First come, first served”, beauty contest, lotteries, auctions • Spectrum engineering • Modeling of propagation patterns • Spectrum monitoring and enforcement • Type approval of equipment • Detection of illegal or wrongful use of frequencies or equipment • Enforcement of regulations & licence conditions Introduction to Spectrum Management

6. Introduction to Spectrum Management

7. Strain on traditional command and control model of spectrum planning Changing Paradigms • Increasing demand for spectrum • New technologies and services • Need for mobility • Advantages of wireless infrastructure • Rapid technological change • Greater capabilities of market players • Convergence • Blurring of regulatory boundaries between different services & technologies Introduction to Spectrum Management

8. Market-based approaches • Exclusive rights regime • Where spectrum is licensed or awarded to a single user for his exclusive use • Market based spectrum planning approaches include: • Auctions • Administrative incentive pricing • Secondary trading of spectrum rights • Non-exclusive rights regime • Where the use of spectrum is licence-exempt or shared with other users Market-based approaches to Spectrum Planning

9. Auctions • Types of auctions • English auction, first price sealed-bid auction, second price sealed bid auction, Dutch auction, simultaneous multiple round auction • Advantages • Transparent and economically efficient • Windfalls or economic rents accrue to the govt. • Disadvantages • May lead to higher prices and concentration in the wireless sector • Auction design can be complex • Temptation to use auctions to generate revenue Market-based approaches to Spectrum Planning

10. Secondary Trading (1) • Promotes economically efficient use of spectrum after initial assignment • Modes and variations • Change of ownership • Reconfiguration • Partitioning and aggregation • Change of use • Constraints e.g. interference, international obligations • Leasing / Sharing • Partial transfer of rights to use spectrum for a limited time or for a limited portion of the spectrum “owned” Market-based approaches to Spectrum Planning

11. Secondary Trading (2) • Making the transition to secondary trading • Refarming, conversion (e.g.UK), creation of management rights (e.g. NZ), overlay licensing • Dividing and packaging spectrum • e.g. Standard Trading Units (Aust.) • Non-commercial uses • Institutional arrangements • Competition safeguards • Trading mechanisms • Windfall gains Market-based approaches to Spectrum Planning

12. Secondary Trading (3) • The case of New Zealand • Intro. of secondary trading despite presence of incumbents in the band • 3 tier system of rights: • Management rights • Manage nationwide band of frequencies • Right to issue licences for frequencies in the band • No restrictions as to usage • Licence rights • Issued by band management rights holders • Apparatus licences • Legacy regime where management rights have not been created Market-based approaches to Spectrum Planning

13. Administrative Incentive Pricing • Use of fees as an incentive for spectrum to be used efficiently • Fees levied by government act as the opportunity cost of using spectrum to the user • Users would return spectrum if the opportunity cost is higher than the economic value derived • Factors in calculating fees • Coverage area, bandwidth, population density • Simulated auctions, financial studies, extrapolations from secondary markets • Imperfect substitute for market-forces • Information deficiencies and methodological problems in determining fees. Market-based approaches to Spectrum Planning

14. Licence-exempt Spectrum • 2 forms: Low power transmissions or allocated bands • ISM bands at 2.4GHz and 5.8GHz • 5150-5250, 5250-5350MHz and 5470-5725MHz • Benefits • “Hostile environment” and power limitations create a fertile test bed for new wireless technologies and services (e.g. WiFi, WiMax, etc.) • Lower costs for manufacturers and consumers • Drawbacks • Spectrum bands can become congested • Difficulty clearing new bands • Loss of direct revenues to governments if spectrum is not auctioned Market-based approaches to Spectrum Planning

15. A Flexible Framework • Exclusive vs. Non-exclusive approaches • Interference (and spectrum scarcity) • Underutilization vs. overuse • Technology and innovation • Towards a more flexible framework? • e.g. different regimes in different bands, open access to spectrum underlay, etc. Market-based approaches to Spectrum Planning

16. Cross-cutting concerns • Non-commercial users • E.g Public broadcasting, aviation, defense, etc. • Market-based incentives include: • Imposing administrative incentive pricing • Allowing spectrum leasing / sharing • International aspects • Harmonization • Interference management Market-based approaches to Spectrum Planning

17. Technology (2004) Fast processing power and intelligent radios New technologies that are more tolerant towards interference and that make better use of available spectrum Spread spectrum Agile radios Software defined radios Regulation (circa 1930) Built on the assumption of “dumb” radios Tightly regulated use to prevent interference Very limited provisions for reclaiming inefficiently used spectrum Policy and Technology Policy and Regulatory Aspects of Advanced Wireless Technologies

18. Spread Spectrum Information is sent over a much wider band than the actual bandwidth of the information by using a code to either modify the carrier wave (direct sequence) or to define a hopping pattern for frequencies (frequency hopping). Policy and Regulatory Aspects of Advanced Wireless Technologies Image source: http://www.futaba.com/IRC/irctechlib.htm

19. Ultra-wide band (UWB) • Ultra-wide band is a spread spectrum technology that transmits data at very high speeds by sending the transmission over a wide range of frequencies but at very low power levels. Policy and Regulatory Aspects of Advanced Wireless Technologies Image source: ITU adapted fromIntel

20. Agile radios • Agile radios act as frequency scavengers. They can broadcast on an unused frequency until the agile radio “senses” another radio trying to use the same frequency. At that moment, the radio “hops” frequency to another temporarily unused portion of the radio spectrum. Policy and Regulatory Aspects of Advanced Wireless Technologies Frequency Time

21. Software-defined radio • A wireless communication device where a computer controls the transmitter modulation. • Can be re-programmed to transmit on different frequencies. • Promising applications: • Multiple uses from generic radio terminal • Mobile phone, cordless phone, pager, WLAN, etc. • Quick software upgrades to adapt to regulatory changes or to different regulatory environments Policy and Regulatory Aspects of Advanced Wireless Technologies

22. Key policy decisions • Introducing underlays/noise floor rights • Allows use of the noise floor by technologies such as UWB • Developing noise temperature measures • Requires devices to measure the level of interference and to transmit accordingly • Developing co-existence models • Allows agile devices to operate in bands alongside licensed users • Allowing multi-use or software defined radios Policy and Regulatory Aspects of Advanced Wireless Technologies

23. Summary • Introduction to spectrum management • Increasing demand for spectrum and convergence are placing a strain on the traditional “Command and Control” model • Market-based approaches to spectrum planning • Greater use of auctions, secondary trading, administrative incentive pricing and license-exempt use to reflect market forces • Need to resolve issues of non-commercial use and int’l constraints • Policy and regulatory aspects of advanced wireless technologies • Policy has to keep up with technology

24. Thank you http://www.itu.int/itu-r http://www.itu.int/itu-d/treg http://www.itu.int/spectrum Eric Lie eric.lie@itu.int