UK 2.6 GHz auction pushed back again, to 2010

By Caroline Gabriel

The UK, once set to be the first European country to auction 2.6 GHz spectrum for ‘4G’ services, is delaying its spectrum sale yet again. In November, regulator Ofcom indicated it hoped to award licenses by mid-2009, and in April it said it promised to hold the auction “as soon as possible”. Now it has “withdrawn” that statement and, in the wake of the new Digital Britain report recommendations, will bundle the 2.6 GHz and digital dividend spectrum sales into one super-auction next year.

The delay is a further blow for operators that had hoped to steal an early march in mobile broadband, especially those aiming to challenge the cellular incumbents, possibly with a WiMAX network. While a few countries, notably Sweden, have sold 2.6 GHz licenses, most auctions will take place in 2010, as operators create strategies that also take account of the sale of analog TV spectrum around 800 MHz; possible broadband stimulus initiatives in some markets; and the ruling, by many regulators, that 3G services can be expanded using current GSM frequencies around 900 MHz.

Existing cellcos argue that they can only reach a meaningful valuation of the 2.6 GHz licenses when the rules on all these other factors are made clear. This was one reason for the initial delays of the UK auction, which was once expected to have taken place over a year ago. It was held up by legal challenges by T-Mobile and O2, which sued Ofcom for trying to sell the licenses before it had completed its rulemaking on refarming 900 MHz GSM spectrum for 3G – something that could reduce 3G carriers’ need for 2.6 GHz licenses, and certainly affect the spectrum’s value.

The Digital Britain report has further complicated the UK auction picture, stating that it intends to implement the proposal of the independent spectrum broker to hold at least part of the 2.6 GHz sale together with the award of the 800 MHz band.  ”In light of the Government’s intention to implement the ISB’s proposals, including possibly directing us in this regard, and the further period of time which will elapse before any such direction is made, Ofcom considers that it is no longer appropriate to rely on its decision of 4 April 2008 to hold the award of the 2.6 GHz band as soon as possible,” the regulator said.

The UK auction is potentially the most significant sale of 2.6 GHz licenses in the EU, because it is the most open to a new technology such as WiMAX and is regarded as a bellwether for various reasons. Ofcom has been more aggressive than many fellow regulators about opening up new bands with as few regulations as possible in order to encourage new services and new operators. And, unusually among European states, incumbent telco BT has no wireless networks, but is widely expected to re-enter the wireless market – which it quit when it spun off its mobile arm, now Telefonica-owned O2 – via a 2.6 GHz license. It has shown a strong interest in WiMAX, and so could be the technology’s route to a national network in the heartland of 3G and LTE. Also of interest to the WiMAX community is Ofcom’s stance that it will leave 2.6 GHz winners to decide whether to implement TDD or FDD networks, according to their business models, rather than defining the split between the two profiles, as most regulators are doing. This could make a license more attractive to a data-driven carrier, since TDD spectrum is advantageous for this model.

Protecting or nurturing a natural resource? Spectrum and WiMAX

By Andrew Mitchell

In many countries throughout the world, radio frequency spectrum has been deemed as a “natural resource.”  The term “natural resource”, generally implies a resource that is of value and is accessible to citizens of the country possessing it.  Radio Frequency spectrum as a natural resource tends to be a very interesting discuss and study.

WiMAX is just one of a number of wireless solutions that vie for spectrum globally.  Just two decades ago some of the spectrum being contemplated for WiMAX and other emerging wireless technologies was viewed as being much less valuable today.  The engineering challenges for mobile wireless technologies were typically associated with providing wide coverage while limiting the needs for significant infrastructure investments such as land and tower installations.

Considerations of in-building coverage, interference issues and site saturation were of a lesser concern.  Today, the pervasiveness of mobile wireless networks brings with it new challenges.  Infrastructure is considerable less expensive than it was two decades ago but the expectations and demands of service quality are now taxing available spectrum.

Access to spectrum for mobile WiMAX services is presenting the ecosystem and regulators throughout the world with a growing problem.  Practically speaking, the most effective spectrum for deployment of mobile WiMAX is that below 3 GHz.  Deployments above 3 GHz, simply put, require too much infrastructure to support cost effective coverage.  The global problem that mobile WiMAX faces is that there are limits to the amount of available spectrum that exists below 3 GHz.

Spectrum below 3 GHz in many countries is available for mobile wireless networks however that spectrum, in all but a few countries, has been very strictly regulated.  In some countries regulators created policies based on the International Telecommunication Union (ITU) - something that suggests that wireless broadband services should be fixed or limited to nomadic use (such as a pedestrian).  That approach is most cases negates the potential for full mobility assignments (for in vehicle use) in the valuable 2.5/2.6 GHz spectrum.
 
A number of European countries are still holding firm to these dated policies and are loath to provide WiMAX operators access to 2.5/2.6 GHz spectrum.  Some would speculate that in these countries the reason for the protection of spectrum is related to an incumbent PTT.  Fortunately though, a few regulators have seen the light and are slowly beginning to release spectrum through an auction process, something proven and made popular by the US regulator, the FCC.

In spite of the progress demonstrated in the US, the demand for spectrum and its associated issues rages on in the US.  The coveted 700 MHz spectrum, made vacant by a move to digital broadcasting in the US is a “lady in waiting”.  The US Senate Commerce Committee extended a deadline for broadcasters to vacate the 700 MHz band to June 12, 2009.  The delay will frustrate Qualcomm who will be delivering mobile video over this spectrum.  But in the end, spectrum is a natural resource and national treasure.  In this case the interest of citizens is at heart – delaying the availability of spectrum ensures that they have access to analog TV broadcasts until the DTV mandate can be full realized.