re: European Commission Backing Spectrum Trading
>> EU Seeks To Promote Flexible Radio Spectrum Trading
Commission seeks to speed move to 3G.
Lisa Jucca
Reuters
31 May 2002
The European Commission wants to promote trading of unused parts of the radio spectrum to help ease the burden on indebted cellphone firms and speed the move to third generation services, a draft document showed on Thursday.
Since radio spectrum is a scarce resource, analysts say selling portions of it could help operators, which have jointly paid over 100 billion euros ($93.8 billion) to acquire third generation (3G) licences and have yet to introduce commercial services.
But in most cases, national laws prevent European operators from selling or transferring their spectrum or portions of it.
In its forthcoming communication on the roll-out of 3G services, a draft of which was obtained by Reuters, the EU executive will call for a more flexible and harmonised approach to spectrum trading in the 15-nation bloc.
"The Commission intends to establish a dialogue with industry and national regulators on secondary trading of radio spectrum and its implications," the document said.
"This will include a discussion on harmonised spectrum trading conditions and the debate on introduction timing in different member states, which would avoid distortions in the assignment process for services of community coverage or interest."
The EU has already approved a bill that will allow member states to introduce spectrum trading, subject to certain conditions, from July 2003.
The Commission's communication, whose final version is to be unveiled in the coming weeks, may increase pressure on EU states to start now to ease rules banning spectrum selling or to require operators to hand back one licence in case of a merger.
Secondary spectrum trading is under consideration in some EU countries. Outside the EU, New Zealand has allowed it for years.
Merger Restraint
Since licences in some countries have cost operators billions of euros, the prohibition on selling radio spectrum is seen by the industry as a costly barrier to consolidation in Europe's most competitive telecoms markets such as Germany.
In February, Telefonica Chairman Cesar Alierta urged the EU to introduce regulations to allow "an effective management of the radio spectrum".
"A large part of the industry would like to see the EU introducing the concept of spectrum trading," Rob Mourik, senior public policy manager for cellphone giant Vodafone told Reuters. "The market would like more flexibility to solve the sector's problems, and spectrum trading is one instrument to partially solve those problems," he added.
David Cleevely, of British consultancy Analysys, said a market-based approach would mean more efficient pricing of radio frequencies. The issue would become increasingly important as technology frees up larger portions of spectrum, he added.
Spectrum for 3G services was allocated in an uneven way in the EU. In some countries operators were given licences to use it for free, while in others a strict auctioning process drove prices through the roof.
Barriers To 3G
Spectrum trading would not be a quick fix to the industry's problems, the Commission said.
In a separate part of the document, the Commission looked at barriers that operators face when building their networks, such as concerns about health risks or environment impacts.
The document said obtaining the authorisation for installing base stations had become "a real challenge in a number of member states" that increased costs and risked delaying the roll-out of the network.
Industry sources said the situation was particularly difficult in Italy, where companies needed authorisation from the local council.
"The Commission views it a priority to contribute to general awareness and understanding of the objective risks associated with the use of mobile terminal and base stations and to involve users' associations in the debate."
The document says current scientific research does not suggest that mobile equipment can adversely affect health and says the Commission is currently preparing a campaign to raise awareness on this matter. <<
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