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mec1595
ERG/RSPG Joint Session
Göteborg, Sweden
‘Spectrum Policy for the Many Possible Futures of Broadband in Europe’
February 27 2008
Martin CaveWarwick Business School, [email protected]
mec15952
The Issue is High Speed Broadband
FTTx Market Share by Region
3%
41%
6%6%
44%
Western Europe
South and EastAsia
North America
Eastern Europe
Asia-Pacific
mec15953
Platform Endowments in Europe
2F + W Upgraded cable system, ubiquitous DSL, 3G networks (30-40%)
F + W (Near) ubiquitous DSL, 3G (50-60%)
W Wireless only- 2G/3G (3-8%)
mec15954
Cable and DSL in the EU15 (millions and %)
2003 2005 2007
CableIncumbent DSLCompetitive DSL
- resale- bitstream- ULL
4.19.62.8
54% 23% 23%
8.224.316.5
30% 28% 42%
11.837.031.3
25%
17%
56%
mec15955
What Triggers NGA Investment?
Revenue loss to current competitorsFear of pre-emption by rival NGARegulatory certainty (cf. Australian approach)Prospect of adequate (non truncated) return
mec15956
Key Issue for Regulators
How many competitors are enough?
- 2F + wireless (US generally, WBA in Malta)- ≥ 4 (Ofcom WBA notification)
mec15957
Intermediate Regulation in the Absence of Effective Competition
Access with- higher cost of capital- pricing flexibility- limitations on capacity of mandated
service (basic or ‘anchor’ product only)- limitations on PoI- but the ‘ladder’ may be
broken.
mec15958
The Role of Wireless
Uncertainty about future capabilitiesCompetitive platforms:- LTE (long term evolution)- WiMax- UMB (ultra mobile broadband)Whether it is the only option or a
competitive constraint, wireless opportunities must be maximised.
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Making Spectrum Available on Flexible Basis
Minimum restrictions on existing assignmentsRefarming regimes to minimise downtimeLicensing of additional spectrum as quickly as possible, without restrictions on useMinimising impediments to trade and change of useConsider synchronising transactions- the ‘big bang’
mec159510
2007
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The UK Frequency Allocations
20XX?
3kHz
300 GHz
Not Allocated
Not Allocated
Not Allocated
Not Allocated
Not Allocated
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The contribution of the public sector
Public sector users account for about half use of ‘beachfront spectrum’ in the EUTypically, they- especially defence ministries- are subject to little scrutinyOption 1-encourage spectrum release by monetary incentives and spectrum pricingOption 2-make them part of the market system , as buyers or (more plausibly) sellers see www.spectrumaudit.org.uk
mec159513
What Level of Harmonisation in the EU?
Focus on harmonisation of spectrum management techniques, not harmonisation of spectrum use De facto harmonisation will follow from manufacturer/operator interaction, subject to competitionEU power needed to harmonise tradable frequencies etc.Digital dividend is a test case.
