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British Telecommunications PLC

  1. 1. BT Response to the Radiocommunications Agency Consultation on Use of the 1781.7-1785.0 / 1876.7-1880.0MHz Bands For the Provision of GSM1800 Telecommunications Services Submission date 25th July 2003
  2. 2. Issue: 1 th 25 July 2003 BT Response to the Radiocommunications Agency Consultation on Use of the 1781.7-1785.0 / 1876.7-1880.0MHz Bands For the Provision of GSM1800 Telecommunications Services Executive summary 1. BT welcomes this consultation on the opportunities for bringing into productive use the former guard bands in the 1800MHz GSM spectrum. 2. BT strongly recommends that the Radiocommunications Agency should make this spectrum available, on a licence-exempt basis and at the earliest opportunity, for a wide range of new low-power wireless applications and services based on GSM1800 technology. Licence-exempt GSM spectrum could provide consumer and business users of GSM with significant added value from their terminals. 3. To release the full potential of this spectrum, we also strongly recommend that the exemption from individual licences must enable public access applications as well as the sale and use of residential and business Customer Premises Equipment (CPE). This approach would be consistent with the licence-exemption actions recently completed for the 2.4GHz and 5GHz bands. 4. We do not believe it is appropriate for this spectrum to go to the wide-area cellular environment, either directly to the existing operators or via an auction. We do not see a need for this, and we do not see such an outcome as improving the GSM customer experience or broadening customer choice. 5. Likewise, we are strongly opposed to the option to retain the status quo. This would deny manufacturers, service providers and users an excellent opportunity to provide or enjoy an increased choice of services. The opportunity must be taken now to extract real benefit from this spectrum. 6. For practical reasons we do not agree with the suggestions relating to the preservation of this spectrum for T&D purposes. 7. We do not consider that it is necessary to “time-limit” the licence-exemption. BT believes that when the time eventually arrives to re-farm the GSM 1800 band for new technologies, the licence-exempt GSM market would prove to be “self extinguishing” within relatively short time scales. 8. Whilst BT generally favours technology neutrality, we recognise that, in this particular spectrum, technical viability, commercial success and best overall benefit to the UK would only be achieved via the use of GSM technology. BT therefore supports the proposal that this spectrum be limited to systems based on GSM 1800 technology. Page 2 of 14
  3. 3. Issue: 1 th 25 July 2003 BT Response to the Radiocommunications Agency Consultation on Use of the 1781.7-1785.0 / 1876.7-1880.0MHz Bands For the Provision of GSM1800 Telecommunications Services Contents EXECUTIVE SUMMARY .....................................................................................................................2 CONTENTS..............................................................................................................................................3 1INTRODUCTION..................................................................................................................................4 2BT’S OVERALL POSITION................................................................................................................4 3SHORT-RANGE LOW-POWER GSM USE ON A LICENCE-EXEMPT BASIS.........................5 3.1LICENCE-EXEMPT SPECTRUM...................................................................................................................5 3.2 THE MARKET FOR LICENCE-EXEMPT GSM...............................................................................................5 3.3 PICO-CELL “BASE STATION” AVAILABILITY...............................................................................................7 3.4 HANDSETS..........................................................................................................................................7 3.5 REGULATORY AND COMMERCIAL ISSUES...................................................................................................8 4WIDE AREA PUBLIC USE.................................................................................................................8 4.1 MAKING THE SPECTRUM AVAILABLE TO THE EXISTING OPERATORS...............................................................8 4.2 SALE BY AUCTION................................................................................................................................9 5MAINTAINING THE STATUS QUO...............................................................................................10 5.1 GENERAL COMMENTS..........................................................................................................................10 5.2 THE PROGNOSIS FOR UMTS IN THE GSM1800 BANDS..........................................................................11 5.3 DEPENDENCE OF DEMAND ON THE EXISTENCE OF GSM NETWORKS AND MARKETS.......................................11 5.4 UNSUITABILITY FOR FUTURE T&D PURPOSES.........................................................................................12 6TIME LIMITED LICENCE-EXEMPTION.....................................................................................13 7TECHNOLOGY NEUTRALITY.......................................................................................................13 CONCLUSIONS....................................................................................................................................13 Page 3 of 14
  4. 4. Issue: 1 th 25 July 2003 1 Introduction BT welcomes this consultation and the opportunity it provides to comment on the future use of the former guard bands in the 1800MHz GSM spectrum. We congratulate the Radiocommunications Agency on taking a lead in Europe in exploring the potential of this newly available spectrum, and we believe significant benefits for the UK can be forthcoming if an innovative approach is taken to its future use. In §2 below we set out our headline position that strongly supports the low-power licence-exempt option. We believe that such a move represents the next logical step in the series of license exemption initiatives originating from RA. These are popular actions by RA, and are gaining increasing support as industry and users begin to realise and develop services over them. We are convinced that, given a little time, they will prove to be highly successful and of real benefit to consumers. Underpinned by this momentum, licence-exempt GSM spectrum could provide consumers and business users with significant added value from their GSM terminals by enriching the range of services available to them. In §3 we explore the licence-exempt option in more depth, and particularly the indicators that suggest that benefits could flow quite quickly once this option is chosen. In §4 and §5 respectively we address the wide-area and status quo options, and explain why we do not believe these to represent beneficial use of the spectrum. Next, in §6 and §7, we consider the issues of time-limited use and technology neutrality in respect of this spectrum, as these are raised as specific topics in the Consultation Document1. Finally we summarise the conclusions that underpin our position. 2 BT’s Overall position Our headline position on this issue is straightforward. BT strongly believes that the Radiocommunications Agency should make this spectrum available, on a licence- exempt basis and at the earliest opportunity, for a wide range of new wireless applications and services based on GSM1800 technology. Furthermore, in line with the removal of differentiation between public and private applications in the 2.4GHz and 5GHz bands, and in order to release the full potential of this spectrum, we believe that exemption from individual licensing must include the possibility of offering public access applications as well as the sale and use of residential and business Customer Premises Equipment (CPE). We do not believe it is appropriate for this spectrum to go to the wide-area cellular environment. Just 2 x 3.3MHz is clearly an insufficient amount of spectrum to support a new operator (even a regional operator) to compete effectively with the established big players, and we do not consider that the existing operators have any particular need of this additional spectrum. BT believes that a greater, more visible, benefit to the UK would be forthcoming if this spectrum provided scope for innovation in 1 Use of the 1781.7-1785.0 / 1876.7-1880.0 MHz Bands for the Provision of GSM 1800 Telecommunications Services; A Consultation Document. Radiocommunications Agency, April 2003 Page 4 of 14
  5. 5. Issue: 1 th 25 July 2003 relatively low-power licence-exempt applications, using GSM 1800 technology, around the periphery of the main public GSM environment. This could significantly enrich the choice of services available over GSM terminals of various types. Likewise, we are strongly opposed to the option to retain the status quo. This would deny manufacturers, service providers and users an excellent opportunity to provide or enjoy an increased choice of services. Furthermore, for practical reasons, we do not agree with the suggestion relating to the preservation and appropriateness of this spectrum, in its present form, for future T&D purposes, for example in relation to future 3rd Generation mobile applications at 1800MHz. 3 Short-range low-power GSM use on a licence-exempt basis 3.1 Licence-exempt spectrum The recently released 2.4GHz and 5GHz licence-exempt bands for Wireless LANs have clearly demonstrated how these bold initiatives have unleashed a significant pent-up demand for such spectrum. Each release has stimulated a wide range of innovative business ideas that can materialise relatively quickly and be explored with low commercial risk. Not all will succeed, but emerging from the new ideas will be sustainable products and services that will enrich peoples’ home, education and work lives than would otherwise have been the case. We fully expect the forthcoming release under a light-licensing regime of 5.8GHz spectrum for Fixed Wireless Access to re-enforce this picture. The release of the 1800MHz spectrum under discussion in this consultation under licence-exempt conditions would complement both these earlier licence-exempt opportunities and the public GSM cellular offerings. We are convinced that this is not only the right thing to do but that it would be an equally successful and popular step for the Government to take. In §3.2-3.5 below we offer our views on various indicators that point to the license- exemption of this spectrum being a market, commercial and regulatory success for the UK. We have examined these carefully, and in our opinion the indicators associated with each are now strong, leading us to believe that it is timely to create this new GSM 1800 licence-exempt market, and that such a market could develop quite rapidly. 3.2 The market for licence-exempt GSM BT views the market for licence-exempt GSM applications as being broad in its scope and full of opportunity for innovation in both CPE design and localised service provision. This must be of real benefit to the end-user community. It is generally considered that the range of application would fall into the following generic areas: -  Wireless PBXs The main benefit of the proposed band is the widespread availability of handsets with economies of scale that result from the international success of the GSM standard. Users would prefer to have a single, personal communications device that contains Page 5 of 14
  6. 6. Issue: 1 th 25 July 2003 their personal directory and can be used in both the wide area and the office environment. High value terminals with dual mode devices allowing access to other radio interfaces are likely to become available. However, to extend the concept of improved in-office coverage and capacity (with commensurate increases in speech quality and data rate) to a wider market, access to the GSM handset market is a necessity.  Domestic CPE As with the office environment, the availability of customer premises equipment (CPE) in the consumer market promises the capability of a single personal device for use in the home and externally. The provision of a home base station that is connected through the fixed line infrastructure will give the customer choice in the way in which their calls are delivered, depending on their location.  Retail outlet With the availability of licence exempt spectrum in the GSM bands, truly tailored services (e.g. serving niche markets segments based on their location) could be offered by a number of service providers to customers on their single personal communications device. For example, retailers could offer in-store services, within which details of available offers or coupons could be downloaded to the handset once they have entered the building.  Local guide systems Other examples of tailored location based services could include commentaries at tourist attractions. These could be delivered to the user’s handset with the added benefit that foreign visitors could be identified from their handset network code and the appropriate language choices offered automatically. Customer choice is a key goal that would be enabled by the availability of licence exempt GSM spectrum. This choice is achieved through the availability of different methods of delivery of speech and data services and access to new services specifically tailored to a customer’s location. The capability of a variety of different Service Providers to offer these new features will drive competition and innovation in this area. This is a field where, to date, the licensed GSM operators have made the commercial decision not to operate but rather concentrate their efforts on the deployment of their wide are cellular offerings. This is only right, and falls in line with the obligations imposed by their licences, which give the benefit of exclusive control of spectrum (and therefore quality in the wide area). The enabling of public access in the 2.4GHz ISM bands has demonstrated that there is willingness amongst Service Providers of varying sizes, and with varying market segments in mind, to provide access. This fertile ground of innovation is currently typically restricted to a customer base with more expensive, high-end terminals. To extend this concept to the mass market requires the enabling of delivery to the wide range of personal communications devices that have already achieved the economies of scale. These economies of scale themselves were the result of successful Page 6 of 14
  7. 7. Issue: 1 th 25 July 2003 international collaboration by the telecommunications industry as a whole incorporating the ideas of a large number of contributing organisations. To achieve similar success in the provision of mobile services requires access by Service Providers to the consumer market. This is analogous to the growth of services on the Internet where the providers of specifically tailored content are not constrained by a limited number of commercial routes to the customer. 3.3 Pico-cell “base station” availability BT envisages that a licence-exempt GSM environment would generally be developed around the concept of low-power “pico-cell” base stations. An important indicator towards early market entry and eventual market success is therefore the ready availability of such pico-cell base station equipment based on the GSM technology. The provision of pico-cellular service could be achieved using a fully equipped pico- cell base station (comprising all the functionality of a GSM BTS). Alternatively, in environments such as retail outlets, the low power service could be achieved through the deployment of distributed antenna systems throughout the building. The markets for the applications discussed in §3.2 above have been in front of the “wide-area” GSM operators for some time, but thus far they do not seem to have found them a commercially attractive adjunct to their core wide-area businesses. The new low-power GSM technologies are not therefore to be found in any quantity in the UK at the present time. The production of the necessary low power equipment relies on the use of similar RF and base-band components to those already available in volume for the handset market. The pico-cell base station equipment that BT has seen is small and lightweight and attractive in its styling. It is possible to see that it would be welcome in both home and work environments and BT believes that there would be few issues over consumer and/or business/industry customer acceptance. BT is aware that at least three manufacturers that are already able to offer such products to a UK market, and we believe others will follow if the market reacts positively. 3.4 Handsets Perhaps uniquely in the context of new mobile applications, customer terminals (handsets) are already widely available at low cost. This has been achieved through the co-operation of the worldwide telecommunications industry as a whole supported by a co-operative standardisation process. The GSM1800 standards already include channels within the spectrum being considered (GSM Absolute Radio Frequency Channel Numbers (ARFCN) 870 – 885). In Europe these 16 channels were never activated because of the receive- before-transmit principles of GSM handsets operating under the control of base stations that recognised the previous guard-band constraints. The Consultation Document correctly notes that there are already over 50 million GSM handsets in the UK, and well over half of these are GSM1800 or dual band and Page 7 of 14
  8. 8. Issue: 1 th 25 July 2003 therefore already able to access the new 1800MHz channels. It is for this reason that we believe that the licence-exempt GSM market could grow rapidly. The number of dual band handsets will continue to rise as the UK operators with both 900MHz and 1800MHz spectrum seek to ensure that they can use their 1800MHz spectrum and maximise their roaming opportunities to 1800MHz-only overseas networks. Whilst it is likely that the release of this spectrum would be a catalyst to further innovation in terminal designs, the sizeable established base of GSM 1800 handsets, already able to operate on the new channels, confirms the existence of a potential ready-made market. The excellent availability of terminals clearly represents an important catalyst for the rapid availability and take up of new licence-exempt services at low cost to the end- user. 3.5 Regulatory and commercial issues With the regulatory groundwork undertaken prior to licence-exemption of the 2.4GHz and 5GHz bands there should be few, if any, regulatory impediments to the early release of this spectrum for licence-exempt applications, including public access applications. If the use of the new spectrum is for GSM based technology alone, issues of compatibility with the GSM networks in the adjacent bands are avoided. Indeed, the most likely impact, if any, would be from the higher-power licensed networks into the new low-power services, which clearly do not have any claim to protection in this respect. Appropriate measures must be taken to protect the adjacent DECT market, but these are not onerous and have been clearly identified during the CEPT studies2 that led up to the removal of the guard band requirement. Section 5.2.3 of the Consultation Document explores an example of GSM terminals roaming between the licence-exempt and public wide-area GSM environments. Ideally, within this scenario, customers would like to have a single personal device which has no restrictions placed upon its use. Clearly this commonly held vision embraces a range of connection and commercial issues that would need to be addressed. 4 Wide area public use We stated within our overall position in §2 above that we did not see any sound argument for making this spectrum available to the wide-area GSM environment. Apart from our belief that the spectrum should be used to enable a wholly new UK market of licence-exempt GSM applications, we have two further points that led us to this conclusion. 4.1 Making the spectrum available to the existing operators 2 ERC Report 100 Compatibility between certain radiocommunications systems operating in adjacent bands: Evaluation of DECT/GSM1800 Compatibility. European Radiocommunications Committee, Naples, February 2000 Page 8 of 14
  9. 9. Issue: 1 th 25 July 2003 One option that the Agency proposes is that the spectrum could be made available to the existing operators. BT does not support this option. A recent independent report3 from the European Radiocommunications Office on GSM spectrum usage in European (CEPT) countries provides a useful background summary of the spectrum available to various European GSM operators. This information clearly shows that the UK GSM operators, whilst not having the largest spectrum packages, are not generally disadvantaged in terms of spectrum per customer compared with other large European GSM operators. We do not therefore believe that the UK wide-area cellular environment has need of additional spectrum on these grounds. Furthermore, if sub-divided amongst the 4 existing operators, this spectrum would offer, at best, just 4 additional GSM channels for each. This would be of little benefit to GSM users at the cost of an extremely valuable licence-exempt market opportunity. The mobile market in the UK is currently reaching saturation in terms of total mobile subscriber numbers. The latest market reports from Oftel4 indicate that subscriber numbers actually fell by 245,000 in the quarter to the end of March 2003 when compared with the previous quarter. Against this background there is no further requirement to increase capacity to support rising customer numbers. Taking consideration of the other side of the capacity equation, the Oftel figures also show that the average number of call minutes per user per month has held steady at around 90 outgoing minutes for the past year. Although growth continues to take place in Short Message Service (SMS) traffic, with over 1.6 billion messages sent in June 20035. At an average of approximately 30 messages per user per month this places a relatively light load on the radio network when compared with the voice traffic. Clearly the challenge for mobile operators is to increase their revenues by the increase in data and value-added services. However, we can expect that most of the high bandwidth data growth will relate to access to media services, and it can be argued that most of the media services will go on to UMTS. In this scenario the GSM bands will only need to host a modest take-up of less demanding data services. We therefore believe that the existing GSM mobile environment has sufficient spectrum to meet existing needs for the carriage of traffic. With the availability of the 3G spectrum the operators also have sufficient capacity to expand their data services in the future. As a consequence we conclude that there is no case to be made for the additional 2 x 3.3MHz to be made available automatically to the existing GSM operators. 4.2 Sale by auction 3 ERO Information Document on GSM Frequency Utilisation within Europe (updated February 2001), European Radiocommunications Office. 4 Market Information: Mobile Update; OFTEL; June 2003 5 Mobile Data Association (www.mda-mobiledata.org) Page 9 of 14
  10. 10. Issue: 1 th 25 July 2003 Another option suggested by the Agency is to make the spectrum available via an auction for wide area (national, regional or presumably local use) under normal GSM operator authorisation. We believe that the probable outcome of an auction would be its purchase by one of the established GSM operators, which would then, under the Agency’s own arguments, gain a very modest cost advantage (we do not believe that the small amount of spectrum involved would upset the competitive stability imparted by the more-or-less balanced GSM spectrum allocations that exist at present). However, this result would probably not realise any noticeable benefit to GSM users. It is conceivable, but we believe most unlikely, that a new operator could purchase the spectrum. Whilst the Agency suggests (§5.1.2 of the Consultation Document) that, with 2 x 3.3MHz …it would just be possible to implement a stand-alone wide-area macro-cellular network... we do not believe that this is actually realistic on either national or regional scales. The limitations on traffic capacity, barriers to growth and infrastructure costs of such a new network would not allow a sound business case to be established. Even if this result did happen, perhaps for local applications in high traffic areas, it is very difficult to see how it would create any significantly new benefit for the GSM user community in general, unless there was a unique service offering. A further issue arises as how this relatively new commercial operation might be positioned vis-à-vis any future re-farming of the 1800MHz band. In terms of tangible benefit to the UK, we do not see the availability of this spectrum to the wide area environment, either directly or via an auction, as improving the GSM customer experience or broadening customer choice in services and applications. Furthermore, if the spectrum were made available under licence-exempt conditions, the GSM operators would have the opportunity to participate in the new market that this action would create, should they wish to do so. 5 Maintaining the status quo 5.1 General comments Section 5.3 of the Consultation Document explores the option of maintaining the status quo in the GSM 1800 bands, primarily because of its potential eventual re-use for 3rd Generation mobile applications. BT is firmly opposed to this option, and we believe that there are several indicators available to suggest it would be more appropriate to take an immediate and proactive approach to extracting economic benefit from this spectrum. These indicators are explored in §5.2-§5.4 below. Page 10 of 14
  11. 11. Issue: 1 th 25 July 2003 5.2 The prognosis for UMTS in the GSM1800 bands BT believes that the global success of GSM will ensure that the technology will remain deployed in its present form for the foreseeable future. The 2000 World Radio Conference did identify the bands 1710-1785MHz and 1810-1885MHz for possible eventual re-farming for UMTS/IMT-2000. Nevertheless, the GSM operators strongly argued that any such “re-farming” would be in the longer term and, in some cases, not until after the 2500-2690MHz UMTS/IMT-2000 extension band had become fully utilised. Furthermore, it is clear that unless and until the 3rd Generation networks can match the extensive coverage of GSM, the latter will be needed on an ongoing basis to underpin the 3G roll out and to support global roaming. Ubiquitous 3G coverage is likely to be many years away. This would suggest that GSM could be required for, say, another 20 years (however we fully recognise that the lifetime of GSM is primarily an issue for the GSM operators). By that time, even if re-farming does take place, the required mobile spectrum arrangements (e.g. the up-link vs. downlink asymmetry, channel widths and duplex arrangements) could be different to those of the current GSM spectrum configuration. It is possible that the band would therefore require significant re- organisation at that stage. BT therefore believes that it makes no sense to sit on this spectrum in its present form for what would probably be a protracted period, and that the opportunity must be taken to extract maximum benefit from it in the interim. 5.3 Dependence of demand on the existence of GSM networks and markets In §5.3.2 of the Consultation Document the Agency expresses a concern that the permitting of licence-exempt GSM devices would lead to a situation whereby it would not be possible to recall these devices should re-farming of the 1800MHz band eventually become desirable. BT does not believe that this represents a significant barrier to licence-exemption. The licence-exempt GSM environment will be strongly related to the public wide-area GSM networks – the intention being to add value for the users of GSM terminals. When the GSM networks are eventually replaced by newer technology, the associated licence-exempt market would undoubtedly want to match the technology evolution within its own environment. BT believes that when the time eventually arrives to re-farm the GSM 1800 band for new technologies, the licence-exempt GSM market would prove to be “self extinguishing” within relatively short time scales. We were pleased to note that in §5.4.2 of the Consultation Document the Radiocommunications Agency also suggested the possibility of this outcome. Page 11 of 14
  12. 12. Issue: 1 th 25 July 2003 5.4 Unsuitability for future T&D purposes Part of the Agency’s argument for retaining the status quo is that the spectrum recovered from the guard bands could continue to be used for test and development (T&D) licences, especially for organisations developing cellular systems. Given that the ongoing requirement for GSM technology T&D activities will progressively reduce, we believe it might be possible for some such tests to continue in the band without significant impact on licence-exempt applications, particularly if they are limited to modest power levels at a few specific locations. We believe this possibility should be explored by the Agency, and in this context we were pleased to see the recent consultation document6 from the Agency on licence-exemption for the non-operational use of wireless telegraphy equipment under suppressed radiation conditions. We view this initiative as a positive step that has relevance to this present discussion. Nevertheless, given that the focus is now on 3rd Generation mobile systems, BT envisages that T&D requirements will increasingly become associated with this new generation of cellular mobile development. The spectrum under discussion is just 2 x 3.3MHz of symmetrical paired spectrum. Whilst some of the 3G mobile technologies (e.g. EDGE, CDMA 1x) could be tested within this spectrum, UMTS W-CDMA (universally adopted by the UK 3G operators) and its future evolutions will require 5MHz wide channels (as recognised in §5.3.3 of the Consultation Document) as a minimum. To preserve the principle of technology neutrality the spectrum available for 1800MHz T&D applications would need to accommodate channel widths of at least 5MHz. Furthermore, as ERC Report 100 implies, it is not yet known what size of guard-band would be needed between the operational 1800MHz GSM networks and any other technologies under test in this adjacent spectrum. Whilst the first generation of UK 3rd generation environment uses Frequency Division Duplex and symmetrical 5MHz channels, it is recognised that, even for the 2500-2690MHz band the frequency arrangements, especially in respect of asymmetry, may need to be different. As noted above, by the time the UK considers the re- farming of the GSM1800MHz spectrum, the frequency arrangements may need to be different from those of the GSM networks. It would be those different arrangements that would need to be tested, and 2 x 3.3MHz may be totally inappropriate. BT believes that, as the next major cellular development is likely to be in the band 2500-2690MHz, it would make more sense to prepare for the early availability of some of this spectrum for T&D purposes. This would be of greater benefit to the system developers. It is therefore difficult to envisage how the present ex-guard band spectrum could host the more important future T&D requirements. 6 Licence exemption for non-operational use of wireless telegraphy equipment under suppressed radiation conditions; A Consultation Document. Radiocommunications Agency, July 2003 Page 12 of 14
  13. 13. Issue: 1 th 25 July 2003 6 Time limited licence-exemption Section 5.4 of the Consultation Document considers the idea of a time-limited licence exemption in order to facilitate future 1800MHz re-farming. BT believes that the arguments provided in §5.3 above make this unnecessary. Furthermore, in §5.4.1 of the document, the Agency suggests a time limit of 10 years on licence-exempt applications. BT believes that such a limit would have a negative impact on the market by discouraging business take up of the new exempted GSM systems and manufacturer and service provider interest. 7 Technology neutrality As a general principal BT favours technology neutrality, as we have indicated in responses to previous RA consultations. However, it is clear that, in this particular spectrum, technical viability, commercial success and best overall benefit to the UK would undoubtedly be achieved via the use of GSM technology. Furthermore, we recognise the situation indicated in §5.5.1 of the Consultation Document. Whilst it has been demonstrated in ERC Report 100 that a guard band between GSM1800 and DECT is no longer necessary, the compatibility with DECT and GSM1800 has not been analysed for other technologies that might be considered for this new spectrum. Those wishing to use alternative technologies would therefore need to present an appropriate technical compatibility case. In this case BT therefore supports the proposal that this new spectrum be limited to systems based on GSM 1800 technology. Conclusions BT has carefully considered the future use of the 2x3.3MHz of ex-guard band spectrum in the 1800MHz band. Our goal was a solution that offered best overall benefit to the UK, with particularly emphasis on value-add for the GSM user-base in the adjacent GSM1800 spectrum that represents a significant proportion of the population. Our clear conclusion was that the creation of a licence-exempt environment for GSM1800 technology would offer the potential for an enhanced GSM user experience with greater choice of services for these users and new markets for home and business CPE equipment. We therefore strongly recommend that the Radiocommunications Agency make this spectrum available, on a licence-exempt basis and at the earliest opportunity, for a wide range of new wireless applications and services based on GSM1800 technology. To release the full potential of this spectrum, we also recommend that the exemption from individual licences must enable public access applications as well as the sale and use of residential and business Customer Premises Equipment (CPE). Page 13 of 14
  14. 14. Issue: 1 th 25 July 2003 In arriving at this position, we found no justifiable reason for making the spectrum available to the wide area cellular network (either directly or via an auction), as there does not seem to be a need for this, and there would be little tangible benefit for the UK as a whole. For a range of practical reasons we also discounted the retention of this spectrum for T&D purposes, and we could not support the suggestion that the “status quo” should be maintained pending possible re-farming for UMTS at some future date. This is prime spectrum for mobile/cordless applications, and we believe that the earliest possible opportunity should be taken to extract significant value from it. Manufacturers have pico-cell “base station” technology available, and there is a massive existing GSM 1800 user base that could take advantage of a licence-exempt environment, although it is recognised that there would be significant commercial issues to be addressed for some applications. Page 14 of 14

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