EU set for battle over 3G airwaves

A battle over the use of Europe’s mobile phone airwaves is set to be a test of the EU’s approach to economic liberalisation and “light touch” regulation.

UK telecom regulator Ofcom is pushing other EU regulators to open up a large chunk of radio spectrum currently allocated – but not yet used – for third-generation (3G) mobile communications.

Ofcom chief David Currie argues that current rules stipulating that the spectrum band can only be used for specific 3G technology - IMT-2000/UMTS systems – is the wrong apparoach.

“We as regulators are not the best people to make that kind of judgment,” Lord Currie told EUpolitx.com. “It is crazy to isolate a block of spectrum and to exclude innovation.”

The airwaves under question, the 190MHz between 2500 and 2690 MHz, were assigned to 3G in 2000, over and above the smaller 140MHz slot granted as part of expensive licences to mobile phone operators.

Slow roll-out of 3G services, largely due to the high costs of licences hitting investment in infrastructure by operators, means that the airwaves slot is presently unused.

“The 2500 - 2690 MHz band is a very significant piece of spectrum. It amounts to 190MHz of spectrum which could be used for mobile services,” argues the UK regulator Ofcom.

“At the moment, there is a debate in Europe relating to precisely what degree of flexibility should be afforded to administrations to allow technologies other than [the 3G] family to use the 2500–2690 MHz band.”

Britain is pushing for a markets led approach to allocating spectrum and is concerned that the possibly lucrative airwaves slot could fall into disuse.

Brussels is sympathetic to the UK approach -  heralding a fight with an opposition of countries said to include Germany, France, Italy and Finland.

“The European Commission, without committing itself, is sympathetic to the UK,” said Ofcom Senior Partner Kip Meek.

Key European Commission players are involved in the debate which ranges across three departments: information, Viviane Reding; competition, Neelie Kroes and industry, Gunter Verhuegen.

Commission sources indicate that that Ofcom has the Brussels executive’s ear and that a decision could be taken under the UK’s EU presidency later this year.

“The UK’s liberal and light touch approach is close to the commission’s own,” said an official.

Ofcom is expecting the commission to bring forward proposals to the EU’s Radio Spectrum Committee – which takes decisions by qualified majority vote.

But an initial draft EU measure to harmonise frequency standards between 2500 and 2690 MHz, set for March 2005, “does not give the flexibility that Ofcom would like”.

The UK is seeking to auction off the band in 2006 to 2007 “with the intention that the auction be technology neutral but respecting the [3G] spectrum mask developed for the band”.

Services such as wireless internet could move into the empty airwaves allowing innovation and the development of the spectrum, Ofcom suggests.

Britain is set to run into opposition with concerns expressed by mobile operators and manufacturers in Germany, France, Italy and the Nordic EU countries.

Some operators are concerned that after spending huge sums on 3G licences – at a price of €12 billion in the UK and Germany alone – rivals could enter a similar market at vastly reduced costs.

Mobile phone manufacturers, such as Nokia, are concerned that opening up the spectrum to different devices could see interference to existing hand sets.

The UK recognises that there could be problems, both technical and political, and backs standards to prevent interference between different technologies and devices.

“Clearly there are interests at stake here that have to be managed, but we have to move ahead,” said Ofcom’s Meek.

“We are not Attila the Hun, entering with deregulation at all costs… there are interference limits.”

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