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23 September 2019

Ofcom takes first steps towards a more flexible spectrum framework

In July, Ofcom announced new rules allowing spectrum sharing in four bands, with the aim of making it easier for businesses or localized service providers to build and operate cellular networks. These are welcome moves to open up spectrum for enterprises and alternative service providers, to ensure that every industry, not just telecoms, can benefit from 4G and 5G. However, there are many compromises in the mechanisms, especially when compared with presumed role models such as the USA’s CBRS framework in 3.5 GHz or Germany’s award of 100 MHz in the 3.7 GHz band for industrial use.

It has introduced two new schemes – Local Access licences and Shared Access licences. The former are clearly influenced by the example of the CBRS band in the USA, since they enable organizations to access spectrum in which incumbents already exist. Local Access licences will be awarded, typically for three years and at low cost, in any of the bands where MNOs operate. They will enable organizations to make use of the spectrum in areas where it is unused or underused by MNOs.

There are important reasons why this will not have the same disruptive impact as the CBRS scheme. One, there is no fully shared/unlicensed access mechanism, so while licences are not expensive (£950), they are required for all types of usage. Two, because the incumbents are MNOs – rather than mainly Naval users in the USA – there is a far higher level of usage of the spectrum. The main locations where it will be realistic to offer reliable services will be rural and remote, so the scheme will be valuable to improve connectivity in those areas, but will not have a nationwide impact.

The second scheme, Shared Access, applies to the 1.8 GHz, 2.3 GHz, 3.8-4.2 GHz and 24.25-26.5 GHz bands (the last of these for indoor use only). The introduction of a shared system for the 3.8-4.2 GHz band has been a centerpiece of Ofcom’s recent policy statements, clearly in response to the government’s drive to improve industries’ access to 5G and so boost innovation. The success of the national 5G strategy relies heavily on the new connectivity being used to transform enterprise processes and to support platforms such as smart cities, and the MNOs’ track record does not inspire confidence that they will find a strong case to enable such services beyond a few selected vertical sectors.

Putting affordable spectrum into the hands of businesses and their service providers is a solution which is being studied in many countries, from the USA to Japan, and has been implemented in some, such as Germany and The Netherlands. The Shared Access licences will be available at low cost (about £80 per 10 MHz per year) and will entitle organizations to use the spectrum on a first come first served basis, coordinated by a spectrum management framework administered by Ofcom.  There are two types – a low power licence which covers any number of base stations within a radius of 50 meters; and a medium power licence, which is mainly for rural areas and requires a licence per base station since wider areas can be covered.

These rules are certainly a step in the right direction in terms of opening up spectrum so that enterprises do not have to rely on MNOs to deliver the services they need. The licences are particularly framed to support local business locations such as factories. But they stop short of the visions set out by Ofcom over the past year, and of the examples set in the USA and Germany. Shared Access has similarities with the licensed access tier of CBRS, but it falls between the flexibility and affordability of a fully dynamic shared access system, like CBRS’s GAA tier; and the assured quality and control of an exclusive licence, awarded to a single business, neutral host or industry sector, to support private networks including critical services.

Ofcom says it is investigating a move to dynamic spectrum access in future, and that could address some of the limitations of its initial approach. Any moves to open up airwaves to support new commercial models and industry requirements are to be welcomed, but this needs to be the starting point for a broader strategy, including dynamic access and dedicated private spectrum, that could enable 5G to reach its full potential in terms of socio-economic impact in the UK.