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Implementing Administered Incentive Pricing for Aeronautical Spectrum - UK Update

Stay informed on the proposed pricing structure to enhance spectrum efficiency in the UK aeronautical sector. Find details on illustrative costs, consultation updates, potential challenges, and the way forward. Keep track of the evolution of spectrum management.

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Implementing Administered Incentive Pricing for Aeronautical Spectrum - UK Update

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  1. ADMINISTERED INCENTIVE PRICINGUK Update Andy Knill Head Surveillance and Spectrum Management

  2. Background • 2005 – Chancellor of the Exchequer Independent Audit of Public Sector Spectrum – “Cave Report”. • Recommendation that use of market mechanisms to deliver increased spectrum efficiency should be considered where appropriate. • Working Groups set up to progress Government’s Action Plan to progress recommendations where feasible. • 2008 Ofcom publish consultation proposing the introduction of AIP for Aeronautical and Maritime Spectrum.

  3. Current Status • Since consultation closed in Oct 08, Ofcom have been reviewing responses. • Recognition that there are still significant issues to be resolved in respect of 2.7-3.1GHz. • Ofcom published a consultation on aeronautical and maritime spectrum management excluding VHF Comms 13 Aug. • Ofcom have focused on VHF for initial application of AIP. • Helios has conducted studies into VHF pricing based on Business Radio Model which form basis of revised Ofcom proposals. • Ofcom intend publishing next consultation on aeronautical spectrum pricing Dec 09 • 12 week consultation period.

  4. VHF AIP Proposals • Information based on what has been presented at Ofcom/DfT/CAA meetings so subject to confirmation in final consultation document. • AIP for VHF to be introduced in 2010 but charges phased over 3-5 years. • Tiered structure within price range of £75-£9900 per frequency (currently £25-£250) based on classes of service. • Use of Business Radio model may introduce factors such as population density and congestion into price model. • Picing may include differentials to reflect 8.33kHz implementation.

  5. Illustrative Costs • En-Route ANSP currently <£50000 will rise to >£1.2M. • Airports: • Large International currently £3000 will rise to >£27000 . • Regional Airport currently <£1000 will rise to >£32000. • Small airport/Busjet currently <£1200 will rise to >£40000. • GA airfield currently £150 will rise to >£2000. • Across the range of airfields this could lead to a price increase per movement of between 15p – £2.40 (approx).

  6. AIP Consultation • Consultation will continue to assert that the proposed pricing structure will provide an important incentive to manage this valuable asset to the advantage of all citizens and consumers. • Pricing based per licence/assignment not per MHz. • From the illustrative pricing examples quoted, there are perceived anomalies between airports due to the individual nature of their operation, airspace arrangements and facilities.

  7. Initial Issues • Inability of stakeholders to change behaviours due to safety requirements, operational needs and international obligations. • Potential for unintended consequences on safety e.g GA community and voluntary use of VHF. • Economic impact on the industry in an extremely difficult and challenging climate. • Inappropriate use of Business Radio Model. • Per licence/assignment charge means the more efficient we are, the more the income to Treasury increases. • Although price impact per movement/passenger is low, this is only initial phase for what is a small % of aeronautical spectrum – cumulative impact is likely to be much more significant.

  8. Way Forward • Once VHF consultation published we will advise all interested stakeholders. • Ofcom will be holding workshops to discuss issues. • Encourage all parties to respond in their own right

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