Cluster 3 meeting

7th May 2014

Agenda

Introduction (TL)

Terms of reference and links with Clusters 1&2 (TL+SS)

Work plan (TL + RS)

UK Spectrum strategy (TL)

Existing material on social value of spectrum (Discussion)

Next steps (TL)

Terms of reference and links with Clusters 1 and 2

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Terms of reference

Cluster 3 was established to bring cross-industry insights to develop a common understanding or framework for looking at the value of spectrum to the UK – both social and economic. Its work should consider all uses of spectrum. It should also act as a two way communication channel with the Government’s Expert Panel established by the UK Spectrum strategy

・ To do its work Cluster 3 requires a strong link with Cluster 1 to identify the applications using spectrum and to understand how demand will evolve

・ Cluster 2 will provide input on access mechanism and particularly the role of sharing

As a first step, the Spectrum Forum scoping document requires the Forum to collate existing study data on the economic and social value of spectrum and the evolving demand for spectrum and identify any gaps or shortfalls [by July 2014]

Cluster 3 will develop recommendations for consideration by the Forum on a framework or set of principles for the valuation of spectrum

・ Hopefully in conjunction with the Government’s Expert Panel

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Framework for use of spectrum

The work of Cluster 3 requires a framework and it is proposed that the framework being used in Cluster 1 should also be used here

・ This will provide consistency across the work of the forum

・ Although it is possible to segment use in a number of different ways what we have captures most applications (is there anything missing?)

・ Some of the data gathered for each of the Cluster 1 review meetings should also be useful for Cluster 3

Spectrum Usage Sectors

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Sector Status in Cluster 1Utilities 16/9/13

Private Mobile Radio- Business radio- Emergency services

11/12/13

Public (cellular) mobile 26/3/1411/12/14

Transportation (aviation, road, rail, maritime) 30/9/14

Broadcasting and entertainment (Delivery and content creation) 26/3/14

Fixed broadband

Defence 30/9/14

Radio amateurs

Industrial, medical, scientific / Short range devices (incl. Wi-Fi) 11/12/14

Space 22/5/14

IoT / M2M

Data being gathered for each sector in Cluster 1

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Scope of the sector

Contributions to social and economic value

Current and recent past status

Sector trends

Usage of technologies and spectrum

Expected changes to tech and spectrum

Longer-term (10-20 years) tech and spectrum needs and options

Work plan

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Work plan

Task 1 – organisation (now)

・ TORs and any feedback on the Cluster to go to the plenary

Task 2 (July 2014)

・ Collate existing study data

・ Review material for key issues and data points

Task 3 (on-going)

・ Provide input and support to the Expert Panel

Task 4 (tbd)

・ Any specific study items driven from within the Cluster or by the Forum on the scope and approaches for developing a common set of principles for valuing spectrum

UK Spectrum Strategy

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UK Spectrum strategy

Government’s aim is “to elicit best economic and social value from spectrum”

Spectrum management and efficient allocation/assignment is an important part of the process for achieving optimum economic value

・ This has been looked at on a number of occasions (e.g. Cave)

Government now wants to take social costs and benefits into account in its assessment of value in addition to looking at the economic value it has already considered

It also wants to consider a consistent and transparent set of valuation criteria

・ “consistent valuation criteria that are as general as possible”

Key action is formation of the Expert Panel

© Plum 2014 12

Ideas in the strategy document

Factors likely to influence “value”

Behaviours and constraints on use

of spectrum

Social, technology, economic and

financial factors

Legal and technical constraints

Dynamic as opposed to static

Proposed – well being valuation

Agree or not agree with this, thoughts, other ideas?

Existing material

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Examples of existing material

Cave Reports

・Review of spectrum management (2002)

・Independent audit of spectrum holdings (2005)

Social Market Foundation report Beyond Cave: Addressing the social value and impacts of Private Mobile Radio in an evolving regulatory climate (October 2002)

EUTC report on economic value of spectrum used by utilities (January 2012)

BEREC/RSPG report on exploring the economic and social value of radio spectrum for certain electronic communications services with respect to the frequency assignment procedures (April 2012)

JRC UETC UTC report on socio economic value of spectrum (January 2014)

We will do a trawl for more inputs but any inputs from elsewhere welcomeSummarise key points on concepts and methodology

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LSE seminar on ‘public value’ of spectrum

An informal seminar involving academics and spectrum experts was organised by the LSE Media Policy group earlier this year – discussion conducted under Chatham house rule

3 questions were posed:

・ While market mechanisms should underpin the allocation of spectrum between users and uses, is there an argument for also considering ‘social’ value?

・ If so, how should we apply a value to different spectrum uses that recognise a social/public good value?

・ How to do this consistently – for example, how might we evaluate the use of a band of spectrum for mobile broadband, train communications, emergency services or broadcasting?

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Key points from discussion

Land analogy is closest (but not perfect) metaphor to spectrum

・ A finite resource like land; spectrum as a publicly owned place in which communication rights are exercised

・ Some parts can be sold to private owners and traded freely, other parts reserved for public use like a park (land zoning)

Not possible or constructive to attempt to attach a ‘value’ to every type of spectrum use; economic efficiency is important goal but not the only goal

Broadcasting case – economic value can be attached to advertising but there are externalities beyond consumer value; auction value ≠ economic impact

Opportunity cost of spectrum; non-spectrum alternatives to delivering services must be considered

There should be more flexibility and tradability of spectrum – e.g. 2-sided auctions to determine allocation and use, rather than regulator determining the use and then holding an auction

Open discussion

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Next steps

Notes of key points from today for feedback to the Forum – 2 weeks

Provide update on the Expert Panel to Cluster 3 and Forum [tbd]

Inputs of existing studies and other material to Chair by end May 2014

・ When Expert Panel meets make it aware of these

Identify and progress specific topics for Cluster 3

・ Ideas f