O2 (UK) Limited

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O2 (UK) Limited

  1. 1. 9 June 2010 Martin Fenton Public Wireless Networks Unit Radiocommunications Agency 11R/2A Wyndham House 189 Marsh Wall London E14 9SX Dear Martin, O2 Response to RA Consultation Document "Use of the 1781.7-1785.0/1876.7-1880.0MHz Bands for the Provision of GSM1800 Telecommunication Services" April 2003 O2 welcomes the RA Consultation reviewing the possible options for the use of all or part of the 1781.7-1785.0/1876.7-1880.0MHz band to provide telecommunications services based on GSM1800 technology. As a leading mobile network operator in the development and delivery of mobile communication services in the UK, we provide our views in response to the three basic scenarios that have been identified, the questions raised in the Consultation, and the draft Regulatory Impact Assessment. O2 encourages the RA to continue with its open and considered approach to issues such as the use of this spectrum as it moves into OFCOM. As stated in the Consultation, the Government licensed the entire available spectrum identified for public mobile GSM (both the GSM900 and GSM1800 bands), apart from the guard bands that were thought to have been necessary, completing this process in 1996. It can be assumed that, if the guard band at 1800MHz had not been considered necessary at that time, the entire GSM1800 frequency band would have been assigned and would now be used to provide public mobile GSM services. Since 1996 the mobile market has continued to develop and is now an enormously significant market for the UK, contributing an estimated £8 billion pounds of net economic benefit to the UK economy in 2000 1. We firmly believe that any changes that may be made to the use of this spectrum should not impose additional burdens on existing GSM licensees, nor should it lead to any adverse impact on the strength of this highly successful market and its customers O2 believes that the potential benefits of making this spectrum available must be viewed in a long term context, since long term investments have been made by existing licensees and it would be detrimental to the UK economy for these to be undermined. An understanding of the benefits of a stable regulatory environment, a clear picture of businesses supported by current licences, and clarity of future opportunities are all required when considering any changes to spectrum 1 “The Economic Impact of Radio”, RA, February 2001 1 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  2. 2. allocations, and we believe that in this case great care should be taken when assessing the relative impact and benefits of the different scenarios presented. In March 1999, the ITU-R concluded that an additional 160MHz would be required globally for terrestrial IMT-2000, over and above the spectrum already identified for IMT-2000 in the 2GHz bands and the spectrum used for 2G cellular systems (such as GSM in Europe). Within the UK, the Government has consistently supported the identification of additional spectrum for terrestrial IMT-2000 and has worked within the ERC (now ECC) and the ITU, including at the World Radio Conference in 2000, to secure suitable frequency bands. The Government has supported, in particular, action within the ERC and ECC “to make any additional spectrum available on a harmonised basis across CEPT countries.”2 In the case of the GSM1800 band as a whole, it is clear that, in the relatively near future, use of the spectrum will need to be expanded to include public mobile terrestrial IMT-2000, following identification of the band at WRC-2000. O2 supports the Government’s strategy3 to make this spectrum available for 3G use, although we acknowledge that the timing of this migration is currently undefined, and we therefore believe that the primary conclusion of the Consultation should be to ensure that the entire GSM1800 spectrum can be made available for future IMT-2000 use at an appropriate time and as part of a carefully planned migration. To enable the 1781.7-1785.0/1876.7-1880.0MHz band to be migrated at the same time as the GSM1800 spectrum already licensed in the UK, any licences for the additional 2 x 3.3MHz would need to be awarded under the same terms and with the same obligations as the existing GSM1800 licences, so that they could be amended at the same time as the existing licences. Those licences have been awarded on a national basis and are paid for annually through administrative incentive pricing. O2 therefore supports that, if the spectrum were to be made available on a licensed basis, it should be done on a national basis, under the same terms and conditions as existing GSM1800 licences. We also support the RA’s stated intention that the detailed arrangements for assigning this spectrum, if new authorisations were to be permitted, would be the subject of further Consultation. We note that the complete GSM1800 band is currently closed to new authorisations4. O2 does not consider it to be appropriate for the RA to make the spectrum available for short-range, low power use on a licence-exempt basis, since this would effectively prevent the planned migration of the GSM1800 band as a whole to IMT-2000, due to the difficulty of withdrawing licence-exempt equipment from usage. Additional comments on scenarios Our additional comments covering the overall approach to this band are included in an Annex to this response. Answers to Consultation questions Our answers to the questions posed in the consultation are included in the Annex to this response. Regulatory Impact Assessment (RIA) 2 Information Memorandum “Third Generation – The Next Generation of Mobile Communications”, NM Rothschild & Sons / RA, November 1999 3 “Strategy for the future use of the radio spectrum in the UK”, RA, April 2002 4 “United Kingdom Plan for Frequency Authorisation”, RA, July 2003 2 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  3. 3. As noted above, O2 supports the Agency’s intention stated in the RIA that the detailed arrangements for assigning this spectrum would be the subject of further Consultation if either of Options 1 or 2 were to be chosen. O2 considers that the interest expressed in this band, and therefore the indication observed by the Agency in the RIA that demand for spectrum exceeds supply, is based on the assumption “that operators/service providers will be able to make use of the existing base of GSM handsets”. O2 points out that the vast majority of these handsets have been heavily subsidised by the existing GSM licensees, and that the issue of maintaining a consistent regulatory regime, that takes account of the substantial investments made by the existing mobile network operators and avoids market distortions, should be added to the list of risks. The use of handset subsidies has been part of the mobile network operators’ strategy that has helped to generate the exponential market growth observed in the UK, bringing the benefits of mobile communications services to the vast majority of UK citizens. We are therefore not certain that the cost of deploying equipment for licence-exempt use would be low. Otherwise, we agree that the risks of radio interference between users and migration of the band to 3G services are significant and need to be taken into account. With regard to the balance between demand and supply, O2 agrees with the Agency’s assessment that there is also uncertainty over the demand from users for licence-exempt spectrum, given the previous release of not only the 2.4GHz band (as stated in the RIA), but of the 5GHz band as well (as noted in the Consultation). With over 80MHz of spectrum available at 2.4GHz , and over 450MHz available at 5GHz, there is already over 80 times the total spectrum available for public licence-exempt service provision when compared to the 2 x 3.3MHz of spectrum under consideration. We are unconvinced that there is insufficient licence-exempt spectrum already available to support the range of applications suggested in the Consultation. With regard to the risk of radio interference, whilst supporting the principle of technology neutrality O2 considers in this case that the potential benefits of a technology neutral approach would be significantly outweighed by the impact of adjacent band compatibility issues, since interference issues would be of concern to both the incoming service and the existing adjacent services. We therefore support the proposal only to consider options based on the use of GSM technology, which would also offer benefits in terms of roaming and economies of scale. Finally, with regard to the risks to migration of the whole GSM1800 band to 3G usage, O2 considers that the prospect of a relatively short-term licence to deploy GSM technology in the band is more significant a risk than the cost of retrieving the spectrum from licensed users, particularly if the licences were offered under the same terms and conditions as the current GSM1800 licences. The risk is that demand for the spectrum might be suppressed by the knowledge that any investment in GSM technology will be short-lived due to the migration to 3G usage. As noted above, although the timing of the migration is currently undefined, O2 believes that the planning associated with migration will need to be considered at the same time as the process(es) for assigning the 2500-2690MHz 3G extension band are discussed. The current timescales relating to the 2.5GHz band are that the detailed frequency arrangements are due to be finalised by the end of 2004 5 (although O2 considers that there is a possibility that this might slip into 2005), and that consideration of the assignment process(es) would follow in 2005/6. We do agree that the cost of 5 Draft 5th Mandate on UMTS, EC, due to be finalised late summer 2003 3 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  4. 4. retrieving the spectrum from a licence-exempt use would be significant, if indeed it is at all practical. As stated in the Consultation, “once spectrum has been released for licence-exempt services, it is very difficult to change its use at a future date as it almost impossible to recall equipment from users when there are no records of who and where they are”. If the option to maintain the status quo were to be followed, we agree that there is a risk that there might be a delay in migration of the GSM1800 band to 3G usage, but we consider that this is offset to some extent by the opportunity for testing and development. If the spectrum were to be offered initially for licensed use and some or all of the spectrum remains unassigned following the initial award process, the opportunity cost of that spectrum will have been demonstrated to be low. We look forward to seeing the consolidated views of all stakeholders brought together in the RA response to this Consultation. We would also welcome the opportunity to meet with you to discuss our comments in further detail. Yours sincerely, Simon Wilson Spectrum Policy Manager 4 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  5. 5. Annex to O2 Response to RA Consultation Document “Use of the 1781.7-1785.0/1876.7-1880.0MHz Bands for the Provision of GSM1800 Telecommunication Services" April 2003 Additional comments on scenarios Our additional comments covering the overall approach to this band are: • O2 believes that there is uncertainty about the level of demand for the 1781.7-1785.0/1876.7-1880.0MHz band, due to the lack of supply side characteristics (i.e. how and when the spectrum might be made available, and at what cost). Nevertheless, O2 considers as a matter of principle that it may be inappropriate to let spectrum lie fallow prior to future allocation, unless the market decides it is uneconomic to make use of the spectrum in question for a relatively short period of time. We would therefore support the RA’s stated intention that the detailed arrangements for assigning this spectrum, if new authorisations were to be permitted, would be the subject of further Consultation. • Should some or all of the 1781.7-1785.0/1876.7-1880.0MHz band be left unassigned following an initial offer, O2 suggests that the spectrum should be left closed to new authorisations, pending the future migration to 3G, whilst allowing and indeed encouraging the use of the spectrum for Testing and Development. Significant innovation can be expected in a regulatory environment that promotes test and development, and O2 believes that radio based industries would be encouraged by the retention of this band for Testing and Development Licensing to increase investment, to become more dynamic in their creation of new services and to consider how they can increase the efficiency of their use of spectrum both nationally and regionally, including rural areas. This, we believe, would contribute to the vision of Broadband Britain. • O2 supports the use of spectrum in a consistent manner throughout the EU, and if possible within the wider European region, and encourages the RA, if it decides to make this spectrum available, to continue with the award of spectrum in line with ERC Decision (95)03 6, which the UK has incorporated into the national frequency allocation table. As noted above, O2 is not certain about the level of demand for additional GSM1800 spectrum in the short term, but in order to avoid introducing market distortions we believe that there should be a consistent opportunity throughout the EU for utilisation of the GSM1800 band whilst avoiding the introduction of additional complexities to the market. O2 supports a regulatory framework that promotes competition, prevents harmful interference and ensures compliance with international obligations, and agrees that the RA should, if it chooses either of Options 1 or 2, make the spectrum available either to existing GSM operators or to new entrants. O2 does not consider it to be appropriate for the RA to make the spectrum available for short-range, low power use on a licence-exempt basis, since this would effectively prevent the migration of the GSM1800 band as a whole to public mobile 3G usage, due to the difficulty of withdrawing licence-exempt equipment from usage. The prevention of migration of the whole GSM1800 band to 3G usage would mean that the spectrum could not be used in a consistent manner throughout the EU. O2 is also unconvinced that there is insufficient licence-exempt spectrum already available to support the range of applications suggested as being suitable for the 1781.7-1785.0/1876.7-1880.0MHz band, given that the 2.4GHz and 5GHz bands recently 6 “ERC Decision of 1 December 1995 on frequency bands to be designated for the introduction of DCS1800” A.5 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  6. 6. released for public service provision have, between them, over 80 times the total amount of spectrum being considered in this Consultation. Should the overriding factor in the consideration of the 1781.7-1785.0/1876.7-1880.0MHz band for licence exemption be the availability of GSM handsets, as implied in the Consultation, O2 would wish to see further details of how the issue of maintaining a consistent regulatory regime, that takes account of the substantial investments made by the existing mobile network operators and avoids market distortions, would be addressed. Answers to Consultation questions Question 1 Given the other potential uses outlined in this document, do you consider it most appropriate to make the spectrum available for wide-area public use? Yes, O2 considers that it is most appropriate to make the spectrum available for wide-area public use. Current use of the GSM1800 band is for national public mobile GSM services, as the UK has committed to through implementation of ERC Decision (95)03, and future use of the whole band will be for public mobile 3G services, as the UK is expecting to commit to following identification of the band by WRC-2000 as potential expansion spectrum for IMT-2000 (3G). Question 2 If your answer to question 1 is yes, do you consider it most appropriate for the spectrum to be used to supplement the spectrum of the existing GSM operators, or to be made available for potential new GSM operators on a regional or national basis? O2 considers that the spectrum should be made available to either existing GSM operators or potential new GSM operators on a national basis, under the same terms and conditions (including obligations) as the existing GSM1800 licences, if it were to be made available at this time. However, O2 considers that the primary conclusion of the Consultation should be to ensure that the entire GSM1800 spectrum can be made available for future IMT-2000 use at an appropriate time and as part of a carefully planned migration. Question 3 If your answers to questions 1 and 2 are yes, do you consider it most appropriate for the spectrum to be awarded via an auction process? O2 considers that the detail of how the spectrum is to be assigned should be the subject of a further Consultation, as stated in the draft Regulatory Impact Assessment. One of the difficulties that will be encountered when consideration is given to the award process, if the spectrum were to be made available at this time, is that the duration of the licence cannot yet be defined, due to the requirement for migration to 3G (see also Questions 9 and 10 below). Question 4 Given the other potential uses outlined in this document, do you consider it most appropriate to make the spectrum available for short-range, low-power GSM use on a licence- exempt basis? No, O2 considers it to be inappropriate to make the spectrum available for short-range, low- power GSM use on a licence-exempt basis, since this would effectively prevent the migration A.6 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  7. 7. of the GSM1800 band as a whole to public mobile 3G usage, due to the difficulty of withdrawing licence-exempt equipment from usage. Question 5 If your answer to question 4 is yes, what kinds of application do you anticipate will develop? Estimates of potential market size and anticipated penetration would also be useful. N/A. Question 6 If your answer to question 4 is yes, should the use of this spectrum for the provision of public services be allowed? N/A. Question 7 If your answer to question 6 is yes, specifically what kinds of public-service offerings do you anticipate will develop? Estimates of potential market size and anticipated penetration would also be useful. N/A. Question 8 Do you consider it prudent not to release the spectrum at this stage but to keep it unassigned, thus assisting future migration to 3G and facilitating T&D work O2 considers that the primary conclusion of the Consultation should be to ensure that the entire GSM1800 spectrum can be made available for future IMT-2000 use at an appropriate time and as part of a carefully planned migration. However, if the spectrum were to be made available at this time, O2 considers that any spectrum left unassigned following the initial award process should be kept unassigned, since we agree that it would both assist the future migration to 3G and facilitate T&D work. The cost of leaving the spectrum unassigned will be low. Question 9 Do you consider it necessary to limit future use of the spectrum for a set period, to ensure that future migration to 3G is not hindered? Yes, O2 considers that it would be necessary to limit the future use of the spectrum, if it were to be made available at this time, to ensure that a carefully planned migration to 3G is not prevented. Question 10 If your answer to question 9 is yes, what period do you consider is appropriate? O2 believes that it is not possible at this stage to specify the duration of any licences, since there has not yet been full consideration of how migration from GSM to 3G will occur. Aspects that will need to be considered prior to a decision on timing of migration in the GSM1800 band include the future use of the GSM900 and other WRC-2000 3G bands and the timing, frequency arrangements and award process(es) associated with the 2.5GHz 3G extension band. For this reason, O2 considers that the 1781.7-1785.0/1876.7-1880.0MHz band should be made available under the same terms and conditions as the existing GSM1800 A.7 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX
  8. 8. licences, so that the entire GSM1800 band could be migrated, if appropriate, at the same time. The existing licences are annually renewable, although there is a presumption that, given the investments that have been made in the existing GSM networks, there is a significant right of tenure that would require a significant period of notice. Question 11 Is it desirable and practical to make the spectrum available in a technology-neutral way, either for wide-area public use or for short-range, low-power, licence-exempt use? Whilst O2 considers it desirable in principle to make new spectrum available in a technology- neutral way, in this case we believe that it would not be practical to do so. As stated in the Consultation, ERC Report 100 concludes that a guard band is unnecessary between GSM1800 and DECT services. If other technologies were to be considered, further studies and possibly guard bands would be needed, delaying the process and reducing the amount of spectrum, to ensure that adjacent services remain protected against intereference. A.8 Wellington Street Slough Berkshire SL1 1YP United Kingdom www.O2.co.uk O2 (UK) Limited Registered in England no. 1743099 Registered Office 260 Bath Road Slough SL1 4DX

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