By James Cemmell, Access Partnership
Companies undertaking a strategic review of their spectrum holdings and requirements should pay particular attention to developments in Whitehall. The Ministry of Defence (MoD), with rights to 35% of UK spectrum assets, will be required to manage its holdings in a transparent, efficient (read band sharing) and commercial manner, with important spectrum to be released as early as 2010. This is likely to impact the UK spectrum market significantly. In practical terms, it means that the MoD will be using market-based mechanisms to manage its spectrum assets, in parallel it will become an active market participant, procuring spectrum for its own needs.
The MoD, has recently concluded a spectrum demand review, projecting requirements out to 2027. In addition, two phases of a six-phase audit of its spectrum holdings have been completed. Once a band has been audited and its status clarified, it can either be released to the market or retained for MoD use. So far the 406.1 – 430 MHz, 3400 – 3600 MHz, 4400 – 4500 MHz, 4500 – 5000 MHz and 5300 – 5850 MHz bands have been audited and the initial releases of spectrum will commence by the end of 2010. Additional spectrum above 4 GHz is scheduled for release by the end of 2011 and additional lower frequency spectrum will be released post 2012.
Spectrum will be released to the market via a number of different paths. For example, spectrum in harmonised NATO bands will be managed in a different manner from spectrum in bands without a primary allocation for military use. The MoD has also indicated that large blocks of contiguous spectrum may be conceded to Ofcom for release whilst the MoD or a Third Party may take on the responsibility in other bands. In short, the release method is negotiable. It will depend on the status of the band and the prevailing market conditions.
Access on Whose Terms?
In December 2008, the MoD published an implementation plan for the spectrum release process. Although provisional, the detailed timeline permits interested parties to factor in the potential to use MoD spectrum in the launch of new services and technologies for the UK market. The timeframes also provide opportunity to work with the MoD to shape the terms on which spectrum will be brought to market. The MoD has already indicated that it will adopt a flexible approach to the future use of its spectrum; in practice this may allow the introduction of cognitive radio sharing techniques and other innovative technical and commercial access arrangements.
Managing the Risks
Managing the process of gaining rights to MoD spectrum requires careful attention. Government departments are only now viewing their spectrum assets through commercial lenses; it remains new territory and some experimentation with the release process will be required before it can be adopted for general use. This will benefit parties who engage with the MoD early on. They will have an important role in shaping the process in their own image – an opportunity that may not be available late on in the release process.
There are still a number of unknowns involved in the MoD spectrum release scheme. Due to the different contexts in which bands are used, appropriate release methods will be determined on a band-by-band basis. Interests who wish to understand the rules of the game should position to work closely with the MoD to ensure that they have full visibility at the earliest stages.
Complex user arrangements will add an additional degree of uncertainty to access negotiations. The MoD shares 99% of its spectrum with other public sector or commercial bodies. Whilst it is encouraging to note the apparent enthusiasm of the MoD to embrace band sharing, interested parties should determine whether protracted negotiations with other public bodies are likely to occur – this forms an important element of the due diligence process.
The landmark MoD spectrum release exercise represents a tremendous opportunity for companies with an interest in gaining access to hitherto restricted bands across all areas of the UK frequency table. However, the ‘how’ and detail of the process is still to be finalised. Interested parties should position to work closely with the MoD and Ofcom to ensure that the terms of the RSA and the subsequent release meet their needs and timeframes. Potential interests with forward-looking spectrum acquisition strategies will already have started the process of evaluating how the MoD impacts their resourcing plans.