Why there will never be another GSM
Ofcom squares up to EU over spectrum carve-up
The problem with this approach is that it forces the regulator to guess which technology is going to be effective over the period of the licence, and licensees to gamble that the regulator is right. With GSM the regulator hit the nail on the head but, in the UK, T-Mobile, Orange, 3, and O2 all paid for 5MHz blocks of spectrum (from 1.9GHz to 1.92GHz) to deploy Time Division Duplexed 3G services, but no such services were ever developed and even now the spectrum stands empty.
An even more extreme example, arguably, is the EU's proposal for a frequency to be mandated for DVB-H services - broadcast mobile TV. Not only is DVB-H a controversial choice of technology, but the market for broadcast TV to mobiles is very unproven and the EU could end up with a chunk of spectrum in which it would only be legal to operate an unpopular service using a redundant technology.
Commission for interference
The alternative, and that proposed by Ofcom, is a Spectrum Usage Rights (SUR) allocation which will specify how much interference a frequency licensee is allowed to generate in neighbouring frequencies, and how much interference they can expect to experience in their licensed band.
Interference comes in two types: in-band and out-of-band, the former being when a neighbour signals leak into your band, the latter being when the strength of their signal overwhelms your receivers (such as when you drive past a Southampton radio transmitter and it becomes impossible to receive anything but Radio Solent until it's out of sight). Winners of next year's UK spectrum auctions can expect to receive SURs which peg that interference at specific levels, but allow the licensee to do anything with the frequency.
These changes aren't limited to the few well-publicised national licences; there are over 40,000 licences that Ofcom manages for fixed wireless connections - often used as backhaul for mobile phone networks, but also to connect companies together. These too will move to being tradable, and non-technology specific.
This is in stark contrast to EU proposals for mandating technologies to specific frequencies in an attempt to emulate the success of GSM. The EU is committed to a more flexible approach, but while Ofcom considers itself to be leading the trend, the EU commission sees it vanishing over the horizon and is looking for powers to bring it back in to line.
Everyone agrees that spectrum licensing needs to be more flexible, but opinion is divided on how flexible and how quickly. The EU is riding a tide of good publicity on the back of its popular cap on international roaming charges, and while Ofcom tried to show what a consumer champion it was by fining companies over the premium-rate scandals it's not secured the public trust as yet.
Memories of the UK 3G auctions still loom large over any spectrum allocation, and this new way of allocating spectrum is going to be hard to explain to most punters who will just see it as more money going into the treasury.
The EU's new-found love of PR will no doubt be mobilised to sell harmonisation, though Ofcom's determination combined with the UK public's distrust of anything coming from Brussels is likely to see that campaign ultimately fail and Ofcom's free-market approach dominate the future of spectrum licensing.
Anyone really interested in how Ofcom views the future could do worse than read a copy of Essentials of Modern Spectrum Management. This rather dull book claims to be a guide to how spectrum is licensed around the world, but reads much more like a manifesto of how the authors feel spectrum ought to be licensed. And given the authors' close relationship with Ofcom, those views can easily be seen in Ofcom policy. ®
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