Review of the European Union Telecommunications Regulatory Framework, 2007

The Commission’s proposals seek to make better use of radio spectrum. Management of radio spectrum will be made more flexible and market oriented, to make sure industries depending on spectrum can reap the maximum economic benefits of the vital and scarce resource. Furthermore, the ‘digital dividend’ – the valuable part of the spectrum released through the introduction of digital television broadcasting and resultant analogue switch-off – will be available for new uses. Needing to take full advantage of these opportunities, the Commission proposed that these frequencies are used more flexibly, so that service providers themselves decide on the value to be placed on the different services that could use it. For more on the EU Regulatory Framework, See Module 3.0 Authorization of Telecom/ICT Services, Section 3.2.1 EU Regulatory Framework.

The main recommendations of the 2007 Review concerning spectrum management were as follows:

-          Efficient Use - Radio frequencies should be considered a scarce public resource that has an important public and market value. It is in the public interest that spectrum is managed as efficiently and effectively as possible from an economic, social and environmental perspective and the obstacles to its efficient use are gradually withdrawn;

-          Harmful Interference - Radio frequencies should be managed so as to ensure that harmful interference is avoided. This basic concept of harmful interference should therefore be properly defined to ensure that regulatory intervention is limited to the extent necessary to prevent such interference;

-          Increased Use of Market Mechanisms - The current spectrum management and distribution system is generally based on administrative decisions that are insufficiently flexible to cope with technological and economic evolution, in particular with the rapid development of wireless technology and the increasing demand for bandwidth. The undue fragmentation amongst national policies results in increased costs and lost market opportunities for spectrum users, and slows down innovation, to the detriment of the internal market, consumers and the economy as a whole. Moreover, the conditions for access to, and use of, radio frequencies may vary according to the type of operator, while electronic services provided by these operators increasingly overlap, thereby creating tensions between rights holders, discrepancies in the cost of access to spectrum, and potential distortions in the functioning of the internal market;

-          Coordination - National borders are increasingly irrelevant in determining optimal radio spectrum use. Fragmentation of the management of access to spectrum rights limits investment and innovation and does not allow operators and equipment manufacturers to realize economies of scale, thereby hindering the development of an internal market for electronic communications networks and services using radio spectrum;

-          Technology and Service Neutrality - Flexibility in spectrum management and access to spectrum should be increased through technology- and service-neutral authorisations to let spectrum users, choose the best technologies and services to apply in a frequency band (hereinafter referred to as the 'principles of technology and service neutrality'). The administrative determination of technologies and services should become the exception and should be clearly justified and subject to regular periodic review;

-          Limited Exceptions - Exceptions to the principle of technology neutrality should be limited and justified by the need to avoid harmful interference, for example by imposing emission masks and power levels, or to ensure the protection of public health by limiting public exposure to electromagnetic fields, or to ensure proper sharing of spectrum, in particular where its use is only subject to general authorisations, or where strictly necessary to comply with an exception to the principle of service neutrality;

-          Freedom to Chose - Spectrum users should also be able to freely choose the services they wish to offer over the spectrum subject to transitional measures to cope with previously acquired rights. It should be possible for exceptions to the principle of service neutrality which require the provision of a specific service to meet clearly defined general interest objectives such as safety of life, the need to promote social, regional and territorial cohesion, or the avoidance of inefficient use of spectrum to be permitted where necessary and proportionate. Those objectives should include the promotion of cultural and linguistic diversity and media pluralism as defined in national legislation in conformity with Community law. Except where necessary to protect safety of life, exceptions should not result in exclusive use for certain services, but rather grant priority so that other services or technologies may coexist in the same band insofar as possible. In order that the holder of the authorisation may choose freely the most efficient means to carry the content of services provided over radio frequencies, the content should not be regulated in the authorisation to use radio frequencies (there is no specific mention of must-carry obligations as typically imposed on cable broadcasters);

-          Public Consultation - As the allocation of spectrum to specific technologies or services is an exception to the principles of technology and service neutrality and reduces the freedom to choose the service provided or technology used, any proposal for such allocation should be transparent and subject to public consultation;

-          Spectrum User Rights - In the interests of flexibility and efficiency, national regulatory authorities should, in bands which will be identified on a harmonised basis, also allow spectrum users to freely transfer or lease their usage rights to third parties, which would allow spectrum valuation by the market. In view of their power to ensure effective use of spectrum, national regulatory authorities should take action so as to ensure that trading does not lead to a distortion of competition where spectrum is left unused.

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