UHF2 realignment study - Ofcom Licensing
UHF2 realignment study - Ofcom Licensing
UHF2 realignment study - Ofcom Licensing
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Final Report<br />
Study to review the configuration of<br />
the 450-470MHz Band in the UK<br />
December 2008<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page i<br />
abc<br />
abc
<strong>Ofcom</strong><br />
Riverside House<br />
2a Southwark Bridge Road<br />
London SE1 9HA<br />
STUDY TO REVIEW THE<br />
CONFIGURATION OF THE<br />
450-470MHZ BAND IN<br />
THE UK<br />
December 2008<br />
Issue and Revision Record<br />
Rev Date Originator<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page ii<br />
Checker<br />
Approver<br />
Description<br />
1 29 February 2008 Mark Redman Sean Kennedy Susan Sweet Final Draft<br />
2 21 July 2008 Mark Redman Sean Kennedy Susan Sweet Revision<br />
3 16 December 2008 Sean Kennedy Susan Sweet Susan Sweet Final<br />
This document has been prepared for the titled project or named part thereof and should not be relied upon or used for any other project<br />
without an independent check being carried out as to its suitability and prior written authority of Mott MacDonald being obtained. Mott<br />
MacDonald accepts no responsibility or liability for the consequences of this document being used for a purpose other than the purposes for<br />
which it was commissioned. Any person using or relying on the document for such other purpose agrees, and will by such use or reliance be<br />
taken to confirm his agreement to indemnify Mott MacDonald for all loss or damage resulting there from Mott MacDonald accepts no<br />
responsibility or liability for this document to any party other than the person by whom it was commissioned.<br />
To the extent that the report commissioned is to be based on information supplied by other parties, Mott MacDonald accepts no liability for<br />
any loss or damage suffered by the client, whether contractual or tortious, stemming from any conclusions based on data supplied by parties<br />
other than Mott MacDonald and used by Mott MacDonald in preparing this report.<br />
Mott MacDonald Ltd<br />
Information, Communications and Media<br />
Division<br />
Victory House<br />
Trafalgar Place<br />
Brighton<br />
BN1 4FY<br />
United Kingdom<br />
abc
About the authors<br />
Mott MacDonald prepared this report for the Office of Communications (<strong>Ofcom</strong>). Mott<br />
MacDonald, wish to thank <strong>Ofcom</strong> for their assistance and for providing expert comments on<br />
the draft. We also wish to thank the Stakeholders who participated in our interviews and<br />
questionnaires.<br />
This report represents the work of Mott MacDonald Ltd and does not necessarily represent<br />
the views of <strong>Ofcom</strong> or any other group.<br />
abc<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Mott MacDonald is a world-class multi-disciplinary engineering,<br />
management and development company delivering solutions<br />
touching many facets of everyday life – from transport, energy,<br />
building, water and the environment to health and education,<br />
industry and communications. Further information can be found at<br />
www.mottmac.com<br />
ATDI is a radiocommunications software components solution<br />
provider providing radio networking planning and consultancy with<br />
a focus on radio and the technologies and systems that use radio<br />
spectrum. Further information can be found at www.atdi.co.uk<br />
Page iii<br />
abc
List of Contents Page<br />
0 Executive Summary 1<br />
0.1 Introduction 1<br />
0.2 <strong>UHF2</strong> Band in the UK 1<br />
0.3 Regulatory Environment for <strong>UHF2</strong> 2<br />
0.4 <strong>UHF2</strong> Technology and Market 3<br />
0.5 <strong>UHF2</strong> Stakeholders 3<br />
0.6 Interference in the <strong>UHF2</strong> Band 4<br />
0.7 Cost Benefit Analysis of different Options for the <strong>UHF2</strong> Band 5<br />
0.8 Recommendations 6<br />
1 Introduction 8<br />
1.1 Aims and Scope 8<br />
1.2 Background 9<br />
1.3 Catalyst for change 9<br />
1.4 Overview of this <strong>study</strong> 10<br />
2 Spectrum Management of the <strong>UHF2</strong> Band 11<br />
2.1 Introduction 11<br />
2.2 <strong>UHF2</strong> Band in the UK 11<br />
2.3 Types of service 11<br />
2.4 Licences 14<br />
2.5 Users in <strong>UHF2</strong> band 17<br />
2.6 Geographic and User Split 21<br />
2.7 Summary & Conclusions 24<br />
3 Regulatory Environment 25<br />
3.1 Introduction 25<br />
3.2 International Telecommunications Union (ITU) 25<br />
3.3 European Regulatory Framework 25<br />
3.4 Electronic Communications Committee (ECC) 26<br />
3.5 UK Regulatory Environment for <strong>UHF2</strong> 29<br />
3.6 Summary & Conclusions 31<br />
4 Technology and Market 32<br />
4.1 Introduction 32<br />
4.2 Technology and Services 32<br />
4.3 Projected Sales of PMR Terminals 38<br />
4.4 Summary & Conclusions 40<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page iv<br />
abc
5 Reconfiguration drivers and challenges 41<br />
5.1 Introduction 41<br />
5.2 Drivers and challenges for band alignment 41<br />
5.3 Stakeholders current views on the <strong>UHF2</strong> band 42<br />
5.4 Summary & Conclusions 46<br />
6 Interference environment 47<br />
6.1 Introduction 47<br />
6.2 Interference challenges for <strong>UHF2</strong> spectrum 47<br />
6.3 Analysis of the continental interference environment 48<br />
6.4 Analysis of the affects of interference in different spectrum configurations 50<br />
6.5 Economic evaluation of Interference 54<br />
6.6 Future interference environment 55<br />
6.7 Summary & Conclusions 57<br />
7 Economics, Costs, Demands and Benefits of Reconfiguring the <strong>UHF2</strong> band 58<br />
7.1 Introduction 58<br />
7.2 Measuring Costs and Benefits of <strong>UHF2</strong> spectrum reconfiguration 58<br />
7.3 Methodology for measuring the costs and benefits of Band Alignment 62<br />
7.4 Review of previous research on the costs of band alignment 63<br />
7.5 Review of previous research on the benefits of band alignment 68<br />
7.6 Distribution of costs and benefits 76<br />
7.7 Summary & Conclusions 77<br />
8 Options development and CBA 80<br />
8.1 Introduction 80<br />
8.2 The options for band alignment 80<br />
8.3 The major cost and benefit categories 80<br />
8.4 Interference Costs and Benefits 87<br />
8.5 Results 89<br />
8.6 Conclusions 97<br />
9 Conclusions and Recommendations 99<br />
9.1 Introduction 99<br />
9.2 Summary of Findings 99<br />
9.3 PEST Analysis 102<br />
9.4 Summary of Conclusions 103<br />
9.5 Recommendations 104<br />
Appendix A: Stakeholder Engagement A-1<br />
Appendix B: Interference B-1<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page v<br />
abc
Appendix C: <strong>UHF2</strong> Interference Regulation C-1<br />
Appendix D: Modelling Interference D-1<br />
Appendix E: Narrowband Interference Modelling Results E-1<br />
Appendix F: Wideband Interference Modelling Results F-1<br />
Appendix G: Spectrum Trading and Liberalisation Modelling G-1<br />
Appendix H: Cost Benefit Analysis Assumptions H-1<br />
Appendix I: Glossary I-3<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page vi<br />
abc
0 Executive Summary<br />
0.1 Introduction<br />
This report presents the findings of a <strong>study</strong> on the configuration of the <strong>UHF2</strong> band (450-<br />
470MHz), undertaken for <strong>Ofcom</strong> by Mott MacDonald Ltd and ATDI Ltd. The configuration of<br />
the <strong>UHF2</strong> band in the UK is not harmonised with its European neighbours, leading to<br />
challenges around continental interference and the introduction of digital technologies.<br />
The opportunity presented by the Emergency & Public Safety Services vacating most of its<br />
use from the <strong>UHF2</strong> band, recent technological and regulatory changes means that now is<br />
the right time for a policy review to ensure the highest value use of the <strong>UHF2</strong> spectrum.<br />
0.2 <strong>UHF2</strong> Band in the UK<br />
The <strong>UHF2</strong> band supports a number of business and mission critical systems. The<br />
configuration of the spectrum enables the deployment of on-site systems, wide area systems<br />
and national/regional systems for use by land mobile services. The <strong>UHF2</strong> spectrum in the<br />
UK is suited to narrow band systems with channel spacing ranging from 6.25 kHz to 25 kHz,<br />
due to the configuration and management of the band. The benefits of this spectrum are<br />
realised by both businesses and public safety organisations.<br />
Emergency and Public Safety Services<br />
(E&PSS);<br />
Scanning Telemetry (ST);<br />
Business Radio (BR), including Maritime<br />
radio on board ships;<br />
Programme Making and Special Events<br />
(PMSE);<br />
Short Range Devices (SRD).<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 1<br />
E&PSS<br />
32%<br />
We concluded the following main points concerning the <strong>UHF2</strong> band:<br />
Spectrum used in the <strong>UHF2</strong> band in the UK supports the operation of multi-<br />
billion pound businesses which benefit from the use of the spectrum in its<br />
current configuration and any disruption to the full time operation of these<br />
systems could result in very costly and very complex changes to critical<br />
national infrastructure;<br />
There is high utilisation of the <strong>UHF2</strong> band with a growing number of licensees<br />
with thousands of mobiles operating in the band. This indicates the demand<br />
for use of the band and cost effectiveness as an attraction for business type<br />
use;<br />
SRD<br />
5%<br />
PMSE<br />
20%<br />
ST<br />
10%<br />
BR<br />
33%<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The current configuration of the band is complex with many small fragmented<br />
0.3 Regulatory Environment for <strong>UHF2</strong><br />
portions spread throughout the band in a reverse aligned arrangement. The<br />
large number of duplex splits makes network development difficult and limits<br />
use to narrowband type systems, excluding wideband systems.<br />
The regulatory environment has moved at a fast pace and will continue to do so, with <strong>Ofcom</strong><br />
introducing liberalisation and trading policies, coupled with simplification of the licensing<br />
processes. These changes have in effect handed much of the future re-configuration of the<br />
<strong>UHF2</strong> band into the hands of the market by enabling the configuration of the band to be<br />
managed by licensees within the regulatory framework set by <strong>Ofcom</strong>. In addition, we drew<br />
the following main conclusions:<br />
The 450-470MHz band will become an IMT-2000 band, where IMT2000<br />
wideband technology may be deployed in neighbouring countries in the<br />
future, which may increase interference received from the continent. The UK<br />
will need to ensure that its services in the band are protected from<br />
interference;<br />
Liberalisation and Trading will be established as a market mechanism for the<br />
market to decide how the band should be used in the future, allowing<br />
licensees the opportunity to re-configure the band as they wish;<br />
Most of the UK’s continental neighbours have adopted ECC Recommendation<br />
TR25-08, but the UK has not adopted this Recommendation, which could lead<br />
to co-ordination problems in the future, thereby necessitating the need for the<br />
UK to proceed with developing an MoU in the <strong>UHF2</strong> with its continental<br />
neighbours;<br />
The 6-month notice period set by <strong>Ofcom</strong> for Band Alignment of the <strong>UHF2</strong><br />
band still remains an issue that is outstanding and would need to be<br />
addressed to give stakeholders certainty on their security of tenure in the<br />
band.<br />
Page 2<br />
abc
0.4 <strong>UHF2</strong> Technology and Market<br />
The market has risen to the challenge of un-harmonised spectrum by introducing either<br />
flexible digital technology in the form of DMR or indeed has altered existing TERTA products<br />
to fit the UK specific configuration. The diagram below illustrates that either DMR or TETRA<br />
will meet the demands of all market sectors for narrowband technology, where it is expected<br />
that the market will effectively churn<br />
from analogue to digital rather than a<br />
growth in overall market. However,<br />
the introduction of wideband<br />
technology will remain difficult owing<br />
to the lack of aligned contiguous<br />
spectrum with the necessary<br />
spectrum masks.<br />
We concluded the following main points on <strong>UHF2</strong> technology and markets:<br />
0.5 <strong>UHF2</strong> Stakeholders<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
For the introduction of narrow band digital technology, a 10MHz duplex split is<br />
no longer required;<br />
Digital PMR technology will out sell analogue over the next two years in the<br />
UHF bands;<br />
DMR will be the digital narrowband technology of choice over the next few<br />
years, which will increase capacity of networks, with users benefiting from<br />
new features;<br />
There is a market for narrowband Digital PMR technology in the UK now and<br />
in the future;<br />
CDMA450 is seen as a technology to deliver 3G services to rural areas.<br />
We conducted stakeholder interviews from a cross section of the industry on what the future<br />
policy of the <strong>UHF2</strong> spectrum should be, where we drew the following conclusions:<br />
The original drivers for the alignment project are mainly irrelevant in the light<br />
of new regulation and technology development. The main drivers are now<br />
economic benefit and interference which will be reviewed in the following<br />
chapters;<br />
Market Catagories<br />
Public Safety/<br />
Mission Critical<br />
Professional/<br />
Business Critical<br />
Commercial &<br />
Light Industrial<br />
The future spectrum manager of the E&PSS will have a key role to play in the<br />
future re-configuration of the <strong>UHF2</strong> band as they will manage the largest<br />
amount of clear spectrum for potential re-assignment;<br />
Page 3<br />
Vertical Markets<br />
Emergency Services<br />
Airports/Ports Utilities<br />
Public Transport<br />
Local Government<br />
Mining<br />
Manufacturing<br />
Petrochemical Taxi/Logistics<br />
Construction Radio Hire<br />
Private Security<br />
Retail<br />
Military<br />
Hospitality<br />
Warehousing<br />
Agriculture<br />
European<br />
Digital Radio Standards<br />
TETRA: Release 2 (TEDS)<br />
TETRA: Release 1<br />
DMR Tier 3: Licensed<br />
Trunked<br />
DMR Tier 2: Licensed<br />
Conventional<br />
DMR Tier 1: Licence<br />
Exempt<br />
European<br />
Analogue Standards<br />
MPT 1327 & Standard<br />
PMR<br />
Standard PMR (EN 300<br />
086)<br />
PMR446<br />
Other technology<br />
CDMA: PAMR<br />
TIA Project 25<br />
TETRAPOL<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
There is a demand for narrowband technology, which does not need to be re-<br />
configured;<br />
The introduction of wide band systems, would probably need at least 2 x<br />
5MHz and would need a review of the adjacent channel and international co-<br />
ordination measures to make it attractive to new entrants;<br />
Stakeholders would like clear guidance on the future policy of the <strong>UHF2</strong> band;<br />
Operators of mission critical services within the band would need a<br />
compelling reason and assurances for funding the re-configuration of the<br />
band and would also need to develop mitigation techniques to avoid<br />
interference risks to their services;<br />
There is little appetite for any re-configuration within the band from incumbent<br />
licensees.<br />
0.6 Interference in the <strong>UHF2</strong> Band<br />
We reviewed current and future interference scenarios that could potentially impact services<br />
in the <strong>UHF2</strong> band. We also looked at the procedures that are in place to manage<br />
interference both nationally and internationally. The main element from our analysis was the<br />
geographical area covered in the UK by continental interference, this interference raises the<br />
noise floor by 3dB and gives an indication of how interference impacts coverage areas – see<br />
the diagrams below.<br />
Through our analysis of the interference environment, we concluded the following main<br />
points:<br />
There is significant interference from the continent into UK base station<br />
receivers when modelling the current realistic scenario (UK CEPT reversed<br />
with 1% time and Base station antenna is 30m agl);<br />
Page 4<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The effect of interference on service area to narrowband systems is around<br />
70% of the noise for which the following coverage areas are lost due to the<br />
noise; 30% in the south of England, 0% in the Midlands and 1% in the North;<br />
The UK would benefit from a Memorandum of Understanding for the <strong>UHF2</strong><br />
band over and above the procedures contained in the HCM agreement;<br />
The introduction of wide band systems into the <strong>UHF2</strong> band would have a<br />
dramatic effect on the existing narrow band users not only in the trading<br />
coordination aspect but also in the noise levels rising from 3 to 8dB<br />
depending on the separation distance between the systems. These<br />
degradations will change depending on the separation distances and<br />
geographic terrain between the various co-channel systems;<br />
There is an economic impact to the <strong>UHF2</strong> band to consider if the UK were to<br />
suffer significant continental interference;<br />
Guard bands and geographical separation would be necessary if the UK were<br />
to adopt partial alignment in some areas in the UK;<br />
Users of <strong>UHF2</strong> spectrum in the UK currently do not suffer continental<br />
interference due to the low level of radio communications activity in the <strong>UHF2</strong><br />
band on the continent. It is has been found that if the UK were to become<br />
CEPT aligned, any future potential interference could be greatly reduced.<br />
0.7 Cost Benefit Analysis of different Options for the <strong>UHF2</strong> Band<br />
A number of options were used to carry out our Cost Benefit Analysis (CBA) for the <strong>UHF2</strong><br />
band. From a case of a ‘do nothing option’ to ‘Partial alignment’. The results of this are<br />
outlined in the table below.<br />
Rank Net Benefit<br />
1 Base case (do nothing) -<br />
2 Partial alignment (narrowband) – Block C only -£2.1M<br />
3 Partial alignment (narrowband) – other blocks -£6.7M to -£22.4M<br />
4 Partial alignment (wideband) -£80M<br />
5 Full alignment – managed -£189M<br />
Page 5<br />
abc
The CBA was developed from previous studies commissioned by different organisations and<br />
agencies such as the Government, the Radiocommunications Agency (RA) and <strong>Ofcom</strong> and<br />
drew on information from recent auctions, information on new technology and the impact of<br />
regulatory changes.<br />
0.8 Recommendations<br />
The Band Alignment project was withdrawn by <strong>Ofcom</strong> in 2004. This project was generally a<br />
process of partial alignment steps, through which these steps are taken through the use of<br />
vacant spectrum as a result of the Emergency Services migrating out of the band, for which<br />
over a period of a few years would have resulted in full alignment. We do not believe that<br />
this process would have been suitable to either industry or indeed <strong>Ofcom</strong> due to the<br />
upheaval, uncertainty and cost over a long duration this would have had on industry. We<br />
believe that if now <strong>Ofcom</strong> were to opt for partial or full alignment of the band, then the use of<br />
an Overlay auction process would be attractive, allowing notice to be served on incumbents<br />
of the <strong>UHF2</strong> band and allowing the market the option to migrate to new services and new<br />
spectrum. However, our analysis leads us to conclude that a policy of no regulatory<br />
intervention should be maintained, due to the introduction of flexible digital technology, the<br />
CBA results and the regulatory measures currently in place should enable the market to<br />
reconfigure the spectrum should they wish.<br />
Based on the findings of the report, we concluded that <strong>Ofcom</strong> should not manage any re-<br />
alignment within the <strong>UHF2</strong> band. We also recommend the following:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
<strong>Ofcom</strong> should not directly intervene in any alignment of the <strong>UHF2</strong> band and<br />
should enable the market to align through market mechanisms such as<br />
trading and liberalisation, assisting where necessary;<br />
<strong>Ofcom</strong> should assist the E&PSS spectrum manager (Post 2009) in working<br />
closely with <strong>UHF2</strong> stakeholders in any re-configuration of the band;<br />
MASTS should be modified or processes put in place to assess the impact of<br />
aligning a channel within unaligned spectrum and amendments to the<br />
algorithm for a guard band and geographical separation needed between co-<br />
channel users. This tool should also be used to assist in any future re-<br />
configuration of the band;<br />
<strong>Ofcom</strong> should proceed with developing an MOU with the its continental<br />
neighbours to avoid any future interference;<br />
<strong>Ofcom</strong> must decide and communicate the future policy for the <strong>UHF2</strong> band in<br />
order to remove uncertainty over the band to users;<br />
Page 6<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
<strong>Ofcom</strong> should continue to monitor interference that may be caused by any<br />
future deployments of wideband networks from the Continent and the impact<br />
this would have from current licensees;<br />
If <strong>Ofcom</strong> does decide to proceed with alignment, we would recommend Partial<br />
Alignment where users of the <strong>UHF2</strong> band are least impacted and further<br />
detailed analysis is carried out.<br />
Page 7<br />
abc
1 Introduction<br />
1.1 Aims and Scope<br />
One of <strong>Ofcom</strong>’s key statutory duties is to ensure the optimal use of the radio spectrum under<br />
its management. Radio spectrum is a major asset to the UK, contributing some £24bn to the<br />
economy each year and underlying many aspects of our lives.<br />
In line with its principal statutory duties, <strong>Ofcom</strong> seeks to further the interests of citizens in<br />
relation to communication matters and to further the interest of consumers in relevant<br />
markets, where appropriate, by promoting competition. In relation to spectrum management,<br />
<strong>Ofcom</strong> is required to secure the optimal use of the spectrum.<br />
<strong>Ofcom</strong> does not manage the entire spectrum as some bands are managed by the<br />
Government for defence and other purposes.<br />
In carrying out its spectrum management duties <strong>Ofcom</strong> has responsibility for:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Enabling the availability of spectrum;<br />
Understanding current and future demand for spectrum;<br />
Promoting efficient management and use of the spectrum;<br />
Understanding the economic and other benefits arising from its use;<br />
Facilitating the development of innovative services through the use of<br />
spectrum; and<br />
Facilitating competition in electronic communications services.<br />
This <strong>study</strong> investigates and addresses at a high level the optimum balance between the<br />
factors affecting the optimum management of the 450-470MHz (<strong>UHF2</strong>) spectrum.<br />
Objectives and considerations include:<br />
maximising the socio-economics benefit for the UK;<br />
minimising regulatory intervention;<br />
examining the impact of the adopted policy on the user community;<br />
relating the objectives to <strong>Ofcom</strong>'s market led management policy; and<br />
taking into account the needs of industry.<br />
This <strong>study</strong> builds upon previous studies and uses a methodical approach to the development<br />
of future policy options for the spectrum management of <strong>UHF2</strong>.<br />
Page 8<br />
abc
1.2 Background<br />
The <strong>UHF2</strong> band in the UK is occupied by two distinct communities: a wide variety of narrow<br />
band business radio users and the Emergency and Public Safety Services operating mission<br />
critical systems.<br />
Prior to 2003, a key part of the UK’s spectrum strategy was alignment of the <strong>UHF2</strong> band with<br />
the rest of Europe 1 and the Radiocommunications Agency (RA) initiated a project to align the<br />
<strong>UHF2</strong> band by 2006. This alignment would have significantly reduced the interference from<br />
the continent into the UK, in particular in the coastal regions and on occasion in London and<br />
the Midlands. Additionally it would have created the potential for the existing systems to grow<br />
and enabled the introduction of new digital systems to facilitate more technical and<br />
economically efficient use of the band.<br />
In 2003, the RA, now part of the new communications regulator, <strong>Ofcom</strong>, was lobbied by the<br />
industry to re-consider the <strong>UHF2</strong> alignment project. Although the stakeholders understood<br />
continental interference was a potential risk to the stakeholders operations, the cost and<br />
disruption of alignment was seen as complex and prohibitive.<br />
The alignment project was withdrawn in July 2004, due to industries’ concerns and the<br />
approach not being in-line with <strong>Ofcom</strong>’s market approach to the management of spectrum 2 .<br />
1.3 Catalyst for change<br />
Since 2004, regulation and technology have moved on considerably, with <strong>Ofcom</strong> introducing<br />
spectrum trading and liberalisation and the industry developing new innovative digital<br />
technologies. In addition, the interference environment and how <strong>Ofcom</strong> quantifies this<br />
through Spectrum Quality Benchmarking, the use of spectrum masks and latterly Spectrum<br />
Usage Rights has now moved forward.<br />
The <strong>UHF2</strong> band currently has approximately 7MHz of spectrum allocated for Emergency and<br />
Public Safety Services (E&PSS) use. Within the next 2 years, a significant portion of this part<br />
of the spectrum will become unassigned owing to the majority of the current <strong>UHF2</strong> E&PSS<br />
users migrating onto the Airwave service. This migration of E&PSS to Airwave will leave a<br />
considerable amount of <strong>UHF2</strong> spectrum potentially available which could be re-assigned,<br />
used as an aid to re-configuration through partial alignment or could assist any migration of<br />
services through temporary assignment.<br />
The opportunities presented by potential availability of E&PSS spectrum, technological<br />
progress and regulatory change mean that now is the right time for a policy review of the<br />
<strong>UHF2</strong> band to ensure the highest value use of the spectrum.<br />
1 CEPT Spectrum configuration as defined in ECC Recommendation TR25-08: www.ero.dk<br />
2 Withdrawal of the Band Re-alignment Project: www.ofcom.org.uk/radiocomms/ifi/glines/pbr_cg/450_470_band_<strong>realignment</strong><br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 9<br />
abc
1.4 Overview of this <strong>study</strong><br />
This project draws upon studies previously undertaken on the subject of band <strong>realignment</strong><br />
and supports the creation of a progressive approach to reviewing any reconfiguration of the<br />
<strong>UHF2</strong> band. The main challenges are explored and a method of assessing the Cost and<br />
Benefits of chosen policy directions have been developed, taking into account concerns of<br />
key stakeholders in this era of liberalisation and spectrum trading.<br />
The <strong>study</strong> takes a three stage approach where we:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Understand the environment – Review the use of the <strong>UHF2</strong> Band, the<br />
regulatory environment, technical developments and assess the demand. In<br />
addition, through key stakeholder engagement gain an understanding of any<br />
challenges for re-configuration and explore any benefits. Stakeholders,<br />
consulted or interviewed are listed at Appendix A.<br />
Model the interference and Economics of <strong>UHF2</strong> – The main challenges for<br />
policy of the <strong>UHF2</strong> band is the debate between interference and the<br />
economics of policy decisions.<br />
Draw conclusions and make recommendations - From the modelling and<br />
understand and develop conclusions and recommendations for the future<br />
policy of the <strong>UHF2</strong> band.<br />
Page 10<br />
abc
2 Spectrum Management of the <strong>UHF2</strong> Band<br />
2.1 Introduction<br />
This chapter outlines how the 450-470MHz (<strong>UHF2</strong> band) spectrum is used and services are<br />
supported. We address key aspects of the licence regime used in the UK and the<br />
complexities that exist due to the configuration of the spectrum. We also identify the main<br />
industry sectors and stakeholders and discuss how they use the spectrum.<br />
2.2 <strong>UHF2</strong> Band in the UK<br />
The <strong>UHF2</strong> band supports a number of business and mission critical systems. The<br />
configuration of the spectrum enables the deployment of on-site systems, wide area systems<br />
and national/regional systems for use by land mobile services. The <strong>UHF2</strong> spectrum in the<br />
UK is suited to narrow band systems with channel spacing ranging from 6.25 kHz to 25 kHz,<br />
due to the configuration and management of the band. The benefits of this spectrum are<br />
realised by both businesses and public safety organisations.<br />
2.3 Types of service<br />
In the UK the <strong>UHF2</strong> band contains many types of services that are categorised as follows:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Emergency and Public Safety Services (E&PSS);<br />
Scanning Telemetry (ST);<br />
Business Radio (BR), including Maritime radio on board ships;<br />
Programme Making and Special Events (PMSE);<br />
Short Range Devices (SRD).<br />
Each service has its own spectrum allocation, within the <strong>UHF2</strong> band. Figure 1 below, shows<br />
the approximate percentage allocation by service.<br />
E&PSS<br />
32%<br />
Source: Mott MacDonald<br />
Figure 1 <strong>UHF2</strong> Band Allocations<br />
SRD<br />
5%<br />
PMSE<br />
20%<br />
Page 11<br />
ST<br />
10%<br />
BR<br />
33%<br />
abc
2.3.1 Spectrum allocation and configuration<br />
The <strong>UHF2</strong> spectrum allocations are made up of different size blocks of spectrum for each<br />
service. Each block is fragmented throughout the band as can be seen on the next page at<br />
Figure 2, which shows the <strong>UHF2</strong> band frequency allocations by service.<br />
Figure 2 illustrates that the <strong>UHF2</strong> spectrum configuration in the UK makes provision for<br />
using dual frequencies and single frequencies. Dual frequency operation requires the use of<br />
a duplex split (the frequency separation of a base station transmit frequency and a mobile<br />
transmit frequency). The <strong>UHF2</strong> band in the UK makes use of many duplex splits, however,<br />
most of the <strong>UHF2</strong> dual frequency channels are on 5.5 MHz and 6.5 MHz duplex splits.<br />
The configuration of the <strong>UHF2</strong> band in the UK is mainly the reverse of the European <strong>UHF2</strong><br />
allocation. This means the UK band is not in accordance with ECC recommendation T/R 25-<br />
08 which recommends that the <strong>UHF2</strong> band is formed of 1x10 MHz (450-460MHz) allocated<br />
for Base Station Receive, and 1x10 MHz (460-470MHz) allocated for Base Station Transmit.<br />
The European configuration of a single 10 MHz duplex split throughout the <strong>UHF2</strong> band<br />
makes efficient use of the spectrum and benefits from harmonisation throughout continental<br />
Europe thereby limiting the probability of interference.<br />
There are currently 48 different frequency duplex splits used within the band in the UK which<br />
allows for a variety of different deployments, however we have found:<br />
Excluding E&PSS:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Approximately 16,500 assignments (including E&PSS) are duplex and would<br />
have to retune to a 10 MHz duplex split if the UK were to move to the<br />
European band plan.<br />
10,250 assignments are duplex; of which,<br />
2200 are the right way round (99% are 6.5 MHz, range 6.5 MHz – 17.8<br />
MHz); and<br />
Approximately 8100 are the wrong way round (range 5.3 – 10 MHz).<br />
7400 assignments are simplex<br />
4 base stations have 10 MHz duplex split but are the wrong way round.<br />
The diagram in Figure 2 and the statistics given above are indicative of the complexity and<br />
high utilisation of the <strong>UHF2</strong> band. If demand for use of this band increases, making<br />
assignments and finding new frequencies will become increasingly difficult.<br />
Page 12<br />
abc
Source: Mott MacDonald<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 2 <strong>UHF2</strong> High Level UK Band Plan<br />
abc<br />
Page 13
2.3.2 Spectrum management<br />
The historical deployment of services in the <strong>UHF2</strong> band with the many duplex splits has<br />
helped enable the Business Radio community to meet the particular needs of businesses.<br />
However, this has led to a complex <strong>UHF2</strong> spectrum arrangement and the need for guard<br />
bands. The guard bands aid the management of the spectrum and enable the different<br />
services to co-exist. The guard bands provide sufficient protection between channels and<br />
create a non-utilised, reserved set of spectrum allocating enough empty space so that users<br />
either side of the guard band can operate without affecting each other. This spectrum<br />
management technique is essential for making assignments to avoid harmful interference.<br />
However, demand for spectrum will increase in the future and there will be a limit to how<br />
much more spectrum will be available in the current configuration.<br />
The fragmented allocations and variety of duplex splits in the <strong>UHF2</strong> band make it extremely<br />
difficult to deploy wide-band systems. This means that currently narrow band systems are<br />
the only technologies accessing this spectrum. The variety of different services and<br />
assignment types, discussed in Section 2.5, add another level of complexity for efficient<br />
spectrum management.<br />
2.4 Licences<br />
Most business radio users requiring a licence must currently apply through <strong>Ofcom</strong> who<br />
conducts the technical analysis and makes the frequency assignment. Recently <strong>Ofcom</strong> has<br />
developed a licensing tool that enables new and existing licensees to apply for their licence<br />
online. This facility eases the process of making new frequency assignments in the <strong>UHF2</strong><br />
band. In addition to <strong>Ofcom</strong>, spectrum is managed by other ‘Spectrum Managers’ that<br />
provide the technical analysis to enable frequency assignments to be made. The <strong>UHF2</strong><br />
band has several band managers, the Joint Frequency Management Group (JFMG) for the<br />
PMSE sector and the Joint Radio Company (JRC) and CSS Spectrum Management<br />
Services for the Utilities sector. Spectrum Managers are expected to increase over the next<br />
few years, with the next Spectrum Manger in the <strong>UHF2</strong> band likely to manage the E&PSS<br />
spectrum.<br />
<strong>Ofcom</strong> publishes licence statistics to provide knowledge and an understanding of the amount<br />
of spectrum that is occupied from year to year. The last set of published licence statistics for<br />
Business Radio use within the UK was for 2006 3 . This report provides an overview of the<br />
latest business radio licence figures and spectrum availability. Key licence figures are<br />
summarised in the following five tables.<br />
3 Business radio licence class report for 2006:<br />
www.ofcom.org.uk/radiocomms/ifi/licensing/classes/business_radio/information/brls06.pdf<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 14<br />
abc
Table 1 provides information on the number of licences and mobiles for wide area Business<br />
Radio licences operating in the UK.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 1 Business Radio Wide Area Licences 2005<br />
Business Category Number of licences No of Mobiles<br />
Ambulance & General Medical 260 5,657<br />
Bus & Coach operators 97 25,213<br />
Gas, electricity, coal & Nuclear 45 10,712<br />
General (Wide Area Shared) 3,145 52,550<br />
Local & Central Government 883 66,291<br />
Motor/Pedal Cycle Despatch 126 7,810<br />
Taxis & Private Car Hire 6,121 154,060<br />
Water Industry 12 2,466<br />
TOTAL 10,689 324,759<br />
Table 2 shows the number of licences and mobiles for on-site Business Radio up to the end<br />
of 2005 for Business Radio frequencies licensed to operate between 26 – 466 MHz.<br />
Table 2 Business Radio On-site Licences 2005<br />
Business Category Number of licences No of Mobiles<br />
Ambulance & General Medical 955 10,274<br />
Gas, electricity, coal & Nuclear 342 9,300<br />
General (Single & Dual Frequency) 21,247 302,958<br />
Local & Central Government 1,426 20,408<br />
Water Industry 138 979<br />
Table 1 and Table 2 show that for Business Radio:<br />
TOTAL 24,108 343,919<br />
Almost 60% of wide area mobiles are used by taxis and private car hire. This<br />
represents about 40% to the total number of mobiles deployed in the UK.<br />
Table 3 shows the number of mobiles deployed by the end of 2005 for wide area and on-site<br />
licences. These numbers represent over 60% of the total number of mobiles deployed in the<br />
UK.<br />
Table 3 Number of mobiles in <strong>UHF2</strong> band Licences 2005<br />
Number of mobiles in <strong>UHF2</strong> band<br />
WIDE AREA LICENCE 24,712<br />
ON-SITE LICENCE 184,082<br />
TOTAL 208,794<br />
Page 15<br />
abc
Table 4 below, shows for each type of use, the number of single and dual channels in the<br />
453-462 block of the <strong>UHF2</strong> band. It shows that the majority of single channels are available<br />
for on-site shared systems, which typically includes single frequency data services such as<br />
paging. Table 4 also shows that National channels account for almost 25% of all dual<br />
channels available in 2005.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 4 Number of single and dual channels available in <strong>UHF2</strong><br />
UHF 2 453.00625-462.49375 MHz Single Dual<br />
Wide area shared 0 15<br />
On-site shared 57 30<br />
National Public Mobile Data operators 0 14<br />
National Channel users 1 41<br />
Exclusive channel users 1 6<br />
UK General 3 0<br />
Short Term Hire 1 9<br />
Parking and Demonstration 0 1<br />
Short Term Hire/Parking and Demonstration 0 1<br />
Limited availability channels 0 32<br />
Split dual frequency channels 0 23<br />
No assignments at present 8 36<br />
TOTAL CHANNELS 71 208<br />
Table 5 below shows the number of single and dual channels assigned for <strong>UHF2</strong> licences at<br />
the end of 2005. The majority of assignments were made for on-site licences which make up<br />
over 80% of channels assigned in the UK.<br />
Table 5 Number of single and dual channels for <strong>UHF2</strong> Licences 2006<br />
Band Dual Frequency<br />
channels<br />
Page 16<br />
Single frequency<br />
channels<br />
Total Channels<br />
WIDE AREA LICENCE ASSIGNMENTS 78 1,169 1,247<br />
ON-SITE LICENCE ASSIGNMENTS 8,174 5,915 14,089<br />
NATIONAL & REGIONAL LICENCE<br />
ASSIGNMENTS<br />
849 1,183 2,032<br />
TOTAL CHANNELS 9,101 7,197 17,368<br />
BAND Dual frequency<br />
channels<br />
Single frequency<br />
channels<br />
Total spectrum available<br />
(MHz)<br />
<strong>UHF2</strong> AVAILABLE CHANNELS 207 71 5.3250<br />
The tables above demonstrate that due to the limited amount of spectrum allocated for<br />
Business Radio, many licences and frequency assignments have been made which include<br />
many hundreds of mobiles deployed. This suggests that there has been very intense use of<br />
the <strong>UHF2</strong> band corresponding with high demand, which can be seen from the number of<br />
channels that are available in the <strong>UHF2</strong> band for both wide area and on-site. The limit in<br />
abc
spectrum will continue to make awarding licences very challenging and therefore careful<br />
planning is required when making future assignments.<br />
It is clear from tables 1 – 5 that the <strong>UHF2</strong> band has been highly utilised and sought after for<br />
business radio use, which could be a concern for the future. Should demand increase for use<br />
of the band, channels will become scarcer and users may have to move to a less optimum<br />
spectrum solution both in terms of cost and network requirements.<br />
Previous land Mobile statistics suggest that licensing in PMR has reached a plateau. There<br />
has been no noticeable increase in sales of PMR equipment or significant developments in<br />
PMR equipment in the last few years. However, it is anticipated that these numbers will<br />
decline with cellular networks attracting users of business radio using wide area networks<br />
due to lower cost bundled minutes offering a more cost effective solution than a private<br />
mobile network.<br />
It is likely in the future that PMR users in the <strong>UHF2</strong> band will remain using on-site networks<br />
as a provision for their local communications rather than for wide area systems. On-site<br />
networks for users in the <strong>UHF2</strong> band are economical as minimal operational expenditure and<br />
smaller capital outlay is required compared to wide area networks. Therefore, we believe<br />
that wide area users of the <strong>UHF2</strong> band business radio will begin to move to public mobile<br />
networks, where their needs are met (i.e. balance of resilience/Facilities (group call)/Costs)),<br />
with on-site users predominantly remaining with their service.<br />
2.5 Users in <strong>UHF2</strong> band<br />
This section discusses the main industry sectors that use the <strong>UHF2</strong> band and explains in<br />
more detail how they use the <strong>UHF2</strong> spectrum, why they have chosen to use the <strong>UHF2</strong><br />
spectrum and where they use <strong>UHF2</strong> spectrum in the UK. We examine the following sector<br />
users:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Emergency and Public Safety Services (E&PSS);<br />
Scanning Telemetry (ST);<br />
Business Radio (BR), including Maritime radio on board ships;<br />
Programme Making and Special Events (PMSE);<br />
Short Range Devices (SRD).<br />
2.5.1 Emergency and Public Safety Services (E&PSS)<br />
The Public Safety Spectrum Policy Group (PSSPG) currently dictates policy for the use of<br />
the <strong>UHF2</strong> band, and other bands, for the emergency and public safety services. The PSSPG<br />
manages the spectrum policy for the spectrum assigned within the UK3 footnote included in<br />
the UK Frequency Allocation Table (UKFAT) 4 .<br />
4 UKFAT 2007: http://www.ofcom.org.uk/radiocomms/isu/ukfat/<br />
Page 17<br />
abc
The E&PSS make extensive use of the <strong>UHF2</strong> band. The 81 channel assignments for the<br />
E&PSS make up approximately 30% of the allocated spectrum. The use of the spectrum by<br />
the E&PSS varies between voice only wide area systems and on-site voice and data<br />
systems.<br />
The Fire and Rescue Services (FRS) use six incident ground communication channels and<br />
one national inter-agency channel within the band. This use is for critical communications at<br />
an incident where fire fighters can communicate with each other via their self-provided peer-<br />
to-peer radios. Individual FRS’s hold their own licence enabling them to manage their own<br />
communications effectively.<br />
The Police use 49 channels nationwide in the <strong>UHF2</strong> band for their variety of different<br />
communications needs, such as emergency, events, inter-agency and training. The<br />
migration of all these services onto Airwave in 2008/9 will result in the return of these<br />
channels to the PSSPG. The Police and National Policing Improvement Agency (NPIA) are<br />
planning the replacement or augmentation of the Airwave network for 2016 to include<br />
wideband services, where <strong>UHF2</strong> is under consideration for a band that could support such a<br />
service.<br />
The majority of E&PSS will be migrating their mobile communications provision in <strong>UHF2</strong><br />
band to the Airwave service in 2008/9. However, there are a number of users within the<br />
E&PSS, for example the prison service and HM Customs and Excise, who are not moving on<br />
to the Airwave network and will remain using the <strong>UHF2</strong> band. Access to the spectrum for<br />
these other non-emergency users will need to be maintained and consideration given to their<br />
requirements for any re-configuration in the future.<br />
2.5.2 Scanning Telemetry<br />
The service provided by Scanning Telemetry allows the monitoring of critical national fuel<br />
and power, water and non-utility services. The spectrum licensed for the operation of these<br />
national networks is essential to maintain a safe, reliable and resilient service to the<br />
businesses that use them and ultimately to the customers. Certain users of Scanning<br />
Telemetry systems are integrated into the Critical National Infrastructure to ensure the<br />
highest-level priority is given in case of major catastrophic events severely disrupting the<br />
network.<br />
The fuel and power services use 38 channels. Operating on a 24/7 basis there are<br />
approximately 500 base stations deployed in the UK for the fuel and power network with<br />
thousands of outstations which report their status every 2 minutes to the central control<br />
room. This level of management is crucial should an incident occur in the network and allows<br />
for a swift analysis and response to any incident. The network infrastructure has been<br />
developed over many years to ensure national coverage is maintained and a reliable,<br />
resilient service guaranteed.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 18<br />
abc
The water industry use 24 national core channels and the non-utilities use 8 channels. These<br />
channels are available 24/7 for the safe and reliable operation of the national network. Using<br />
approximately 500 base stations and over 10,000 outstations, this critical network monitors<br />
and controls the operation of the water industries services to its customers. The current<br />
spectrum configuration is suited to this type of narrow band use where high packing<br />
densities are utilised to make the most use out of the spectrum.<br />
The duplex split for Scanning Telemetry provides a suitable arrangement for the deployment<br />
of services on a national basis.<br />
The mission critical nature of the utility companies means that any future national spectrum<br />
management policy decisions must be sensitive to these radio systems.<br />
2.5.3 Business Radio (BR)<br />
There are a large number of different users and types of usage within the <strong>UHF2</strong> band for<br />
Business Radio (BR). BR extends into many areas of business use, such as:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Logistics and services industry;<br />
Power and Fuel industry;<br />
Private Security services;<br />
Transport services - private and public;<br />
Media, Sport and Recreation.<br />
BR systems are deployed across the UK and there are some national channel allocations<br />
available to large organisations that require them. An example of a large organisation is<br />
Network Rail, which has a national requirement for a secure, private communications<br />
network. An organisation like this uses several narrowband channels on a national basis to<br />
enable the safe and dedicated operation that is required.<br />
The spectrum allocated for BR services is 5.325 MHz of <strong>UHF2</strong> spectrum. The current<br />
configuration in the UK is the reverse alignment with ERC Recommendation T/R 25-08. The<br />
current consequences of this are minimal due to limited activity in Europe in the lower part of<br />
the band, 450-460 MHz, and there is no significant impact to users at the moment. The<br />
situation in Europe could potentially change and could in the future cause interference to<br />
these services in the UK.<br />
There are over 17,000 assignments operating BR within the <strong>UHF2</strong> band. The implication of<br />
this in relation to any re-configuration of the band has meant in the past that many users<br />
would need to retune equipment, buy new equipment and possibly obtain new licences at<br />
significant cost. However, selective partial re-configuration, which is planned effectively, may<br />
now be practicable owing to technology advancement.<br />
Page 19<br />
abc
2.5.4 Programming and Special Event (PMSE)<br />
The Joint Frequency Management Group on behalf of <strong>Ofcom</strong> licenses Programme Making<br />
and Special Events (PMSE) users in the <strong>UHF2</strong> band. The main applications used within the<br />
band are talkback systems together with some audio links, wireless cameras and airborne<br />
systems.<br />
The current configuration of the <strong>UHF2</strong> band offers a flexible and robust spectrum<br />
management arrangement to make efficient assignments. The duplex split in the <strong>UHF2</strong> band<br />
for PMSE enables many users to operate in the same vicinity on a time-shared basis, which<br />
is the main attraction for PMSE users. PMSE users require spectrum on an ad-hoc basis, for<br />
example for outside broadcasts.<br />
PMSE spectrum is used on a nationwide basis and the requirement for immediate availability<br />
underpins the need for a continued allocation in the <strong>UHF2</strong> band.<br />
2.5.5 Short Range Devices (SRDs)<br />
The SRDs that operate in the <strong>UHF2</strong> band do not impact other licensed users and are exempt<br />
from requiring a licence to operate. The minimum requirements to operate a Short Range<br />
device can be found in the UK Interface Requirement 2030 document.<br />
Table 6 below shows the technical parameters implemented by short-range device<br />
equipment in accordance with the ETSI harmonised standard EN 300 220.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 6 Short Range Devices in <strong>UHF2</strong><br />
Application Frequency<br />
Telemetry and Tele-<br />
command<br />
Medical and Biological<br />
Applications<br />
Mobile, Transportable<br />
and Lone Safety Alarms<br />
Range<br />
458.5 -<br />
458.95MHz<br />
458.9625 -<br />
459.1MHz<br />
Page 20<br />
ERP Channel<br />
widths<br />
500mW 12.5kHz,<br />
10mW,<br />
500mW<br />
25kHz<br />
12.5kHz,<br />
25kHz<br />
458.8375MHz 100mw 12.5kHz<br />
Fixed Alarms 458.825MHz 100mW 12.5kHz<br />
Model Control 458.5 -<br />
459.5MHz<br />
100mW 25kHz<br />
Reference<br />
Standard<br />
EN300 220<br />
Currently it is estimated by the European Commission that the short-range devices market<br />
will be valued at around £15 billion by 2009 and SRDs operating in the UK in the <strong>UHF2</strong> band<br />
make up a significant proportion of that figure. This indicates further the intense use of the<br />
abc
and for this type of service. Some users rely on SRDs for operation of non-critical<br />
component parts of their business in the knowledge the spectrum and equipment are readily<br />
available and they can purchase a device and use it immediately. It is this type of<br />
deployment that is attractive to businesses and consumers alike and hence the large number<br />
of devices in operation.<br />
Licence exempt spectrum is identified as an attractive option for users in the <strong>UHF2</strong> band and<br />
in future, it is possible more applications will become licence exempt based on<br />
recommendations made in a report from <strong>Ofcom</strong> on the economic value of licence exempt<br />
spectrum 5 .<br />
2.6 Geographic and User Split<br />
Frequency planning and how the spectrum is assigned, ensures that spectrum is re-used<br />
geographically, distributing licensees, often for the same type of services nationwide.<br />
Stakeholders and <strong>Ofcom</strong> have both considered a possible alignment of the spectrum within<br />
the UK borders, providing a geographical split between aligned and un-aligned spectrum.<br />
We have provided a high-level view of the geographical distribution of licensed base-stations<br />
that allows the identification of a significant geographical split between licensees to enable a<br />
UK border of aligned/non-aligned spectrum.<br />
The criteria that would enable a geographical user split are:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Identify areas of white space;<br />
Minimum density of users affected;<br />
Minimum population effect.<br />
To introduce a geographical split certain mitigation requirements would need to be<br />
considered, such as a 50 - 60km exclusion zone around the dividing line and the<br />
consideration of any potential effects with the Fylingdales Radar system.<br />
5 The economic value of licence exempt spectrum – Aegis, Ovum and Indepen December 2006<br />
Page 21<br />
abc
Figure 3 and Figure 4 demonstrate the vast geographical distribution of data systems across<br />
the UK. There is no large single area that could be geographically separated for alignment<br />
for this type of use. Figure 3 shows both simplex and duplex operation for on-site and Figure<br />
4 shows mainly duplex operation for wide area systems.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 3 On-site speech<br />
and data systems<br />
Page 22<br />
Figure 4 Wide Area speech<br />
and data systems<br />
Figure 5 and Figure 6 show the usage distribution of wide area PBR and national and<br />
regional PBR. Figure 5 illustrates the geographical distribution of wide area PBR licensees<br />
are mainly used near or within the major conurbations. Most of Wales and the majority of<br />
South West England do not use wide area PBR. National and regional PBR use is mainly<br />
located in the South East with a high concentration of frequency paired use. Simplex use is<br />
quite wide spread throughout the UK for regional and national PBR licences.<br />
abc
Figure 5 Wide Area PBR<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 6 National and<br />
Regional PBR<br />
Page 23<br />
Figure 7 Public Mobile Data<br />
Figure 7 shows the geographical separation between licensees using the public mobile data<br />
service. There is a distinct natural geographical separation between users throughout the<br />
UK, which is based on terrain shielding and a lack of assignments around this identified<br />
boundary, show below at Figure 8.<br />
Figure 8 Natural geographical boundary<br />
Figure 8 shows a predicted geographical boundary based on the distribution of <strong>UHF2</strong> users<br />
in the UK that could separate the country for CEPT aligned and CEPT non-aligned use.<br />
Analysis of the geographical boundary found that areas 60km either side of the boundary<br />
line sterilises use of the <strong>UHF2</strong> band and would mean including an exclusion zone that<br />
extends south as far as Manchester and north as far as Glasgow. This level of exclusion of<br />
use would not be an attractive option for separating the country for CEPT aligned and CEPT<br />
non-aligned use and has been discounted as an option.<br />
abc
2.7 Summary & Conclusions<br />
This chapter has discussed the key aspects of <strong>UHF2</strong> spectrum configuration and its use<br />
within the UK. It can be concluded that:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Spectrum used in the <strong>UHF2</strong> band in the UK supports the operation of multi-<br />
billion pound businesses that benefit from the use of the spectrum in its<br />
current configuration.<br />
Disruption to the full time operation of these systems could result in very<br />
costly and very complex changes to critical national infrastructure.<br />
There is high utilisation of the <strong>UHF2</strong> band with a growing number of licensees<br />
with thousands of mobiles operating in the band. This indicates the demand<br />
for use of the band and cost effectiveness as an attraction for business type<br />
use.<br />
It is likely that on-site services will remain in the <strong>UHF2</strong> band whilst wide area<br />
services not necessarily need to be a private network will diminish as they<br />
move to cellular services for communication provision.<br />
The current configuration of the band is complex with many small fragmented<br />
portions spread throughout the band in a reverse aligned arrangement. The<br />
large number of duplex splits makes network development difficult and limits<br />
use to narrowband type systems, excluding wideband systems.<br />
<strong>UHF2</strong> licensees are geographically distributed across the UK utilising the<br />
spectrum in different ways. This would make introducing a natural<br />
geographical user split across the UK difficult, which was further confirmed by<br />
our analysis.<br />
The benefits in using the band in its current configuration are that secure,<br />
reliable and resilient networks can be deployed creating the ability to make<br />
many assignments as the <strong>UHF2</strong> band is suited to narrowband systems.<br />
It is possible a user split could be found in some areas of the UK for wideband<br />
systems. However, further investigation would be necessary to determine if<br />
any area would satisfy all the criteria for a user split and is beyond the scope<br />
of this <strong>study</strong>.<br />
Page 24<br />
abc
3 Regulatory Environment<br />
3.1 Introduction<br />
In this chapter, we review the current regulatory environment with a particular focus on the<br />
following issues:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Actions at an international level including the ITU, European Commission and<br />
the Electronic Communications Committee (ECC).<br />
The development of the UK <strong>UHF2</strong> regulatory environment.<br />
3.2 International Telecommunications Union (ITU)<br />
At the recent ITU World Radio Conference 2007, it was agreed that the 450-470MHz (<strong>UHF2</strong>)<br />
band would be a recognised IMT-2000 band from early 2009. However, it is understood that<br />
Western European regulators would be unlikely to entertain the use of IMT-2000<br />
technologies in the <strong>UHF2</strong> band in the near term owing to the incumbent narrowband use<br />
within the band.<br />
However, in all cases, allocations must comply with internationally agreed allocations defined<br />
under the auspices of the International Telecommunications Union (ITU) and detailed in<br />
Article 5 of the ITU Radio Regulations, if the service concerned is to be protected from<br />
interference from other services in neighbouring countries. This effectively means that from<br />
2009, the UK would need to protect IMT2000 services, either in the UK or internationally<br />
from harmful interference.<br />
3.3 European Regulatory Framework<br />
The last decade has seen a series of regulatory measures resulting in progressive changes<br />
in radio spectrum management and policy in the European Union (EU) through a series of<br />
regulatory measures. These measures enabled decisions to be taken on the availability of<br />
radio spectrum for relevant EU policies, providing legal confidence, mechanisms for radio<br />
spectrum policy development, transparency on spectrum usage and a consolidated<br />
European position in international radio spectrum fora.<br />
The key objective of EU radio spectrum policy is to optimise the use of spectrum, to<br />
maximise its value for society and to avoid harmful interference. 6 Since February 2005, the<br />
Commission has issued a number of policy statements aimed at promoting more flexible use<br />
of spectrum and greater use of market approaches to spectrum management. The<br />
Commission has emphasised the need for “a gradual but systematic liberalisation of radio<br />
spectrum use”. As part of the i2010 initiative the Commission has presented a strategy for<br />
advancing a single market for radio spectrum use in Europe. Recently, as part of the 2006<br />
6 The Radio Spectrum Decision also refers to economic, safety, health, public interest, freedom of expression, cultural,<br />
scientific, social and technical aspects of Community policies.<br />
Page 25<br />
abc
eview of the Regulatory Framework for Electronic Communications, the Commission has<br />
signalled its intention to adopt legally binding instruments to:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Achieve the introduction of technology and service neutral spectrum use as a<br />
default position (through the WAPECs concept);<br />
Establish a committee process to identify selected bands for use under<br />
general authorisation;<br />
Develop a common framework for spectrum trading in the EU.<br />
This strategy is aimed at ensuring a common approach within the EU to managing spectrum<br />
resources that will allow innovators to place new technologies on the EU single market<br />
quickly and with legal certainty. By putting in place a common framework across the EU the<br />
costs to organisations of acquiring and using spectrum in Europe on a multi-national and<br />
possibly a pan-European basis are expected to be reduced.<br />
More recently, following two years of consultations with stakeholders, with national<br />
regulators and with users of telecoms services, the Commission has proposed a review of<br />
the telecoms framework 7 . The proposals are due to be debated in the European Parliament,<br />
and by Member State governments in the Council. Once adopted by the EU the revised rules<br />
have to be incorporated into national law before taking effect. The Commission expects the<br />
new framework to be in place from 2010 onwards. The most pertinent part of the telecoms<br />
framework proposals to this <strong>study</strong> is the ‘new deal for Radio spectrum’, where the<br />
commission wish to drive a common approach to radio spectrum management, particularly<br />
for the Digital Dividend. Although the proposals may be a radical change for some European<br />
regulators, the proposals are in the main in line with the UK.<br />
3.4 Electronic Communications Committee (ECC)<br />
Historically, the approach to harmonising spectrum use in Europe has been predominantly<br />
on the basis of Recommendations or Decisions issued by the ECC within CEPT. There are<br />
certain exceptions, such as the spectrum allocated to DECT cordless phones, which is<br />
mandated by an EC Directive. ECC Recommendations are limited in the extent to which they<br />
can support harmonisation, as they are voluntary in nature and there is no obligation on<br />
individual Member States to implement them. ECC Decisions carry greater weight, in that<br />
once Member States have committed to implement the Decision they are obliged to<br />
implement them, usually by means of transposition into national legislation or incorporation<br />
into the national frequency allocation table. However, there is no obligation on Member<br />
States to commit to ECC Decisions.<br />
The ECC Recommendation T/R 25-08: ‘Planning criteria and coordination of frequencies in<br />
the Land Mobile services in the range 29.7 – 960 MHz’ describes the <strong>UHF2</strong> frequency band<br />
7 Proposals for reform of the EU telecoms rules 13 November 2007:<br />
http://ec.europa.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=3701<br />
Page 26<br />
abc
arrangement with a 10 MHz duplex split between base transmit and mobile transmit. This<br />
can be seen at Figure 9 below.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 9: <strong>UHF2</strong> ECC Recommended Band Plan<br />
This is the frequency arrangement to which the UK has been attempting to realign. The<br />
contiguous nature of this European band plan has enabled the harmonisation of radio<br />
equipment standards resulting in benefits to consumers in continental Europe. It is important<br />
to note that the UK is not a signatory to this recommendation; however, the UK’s continental<br />
neighbours, the Netherlands, Belgium and France are signatories, whilst Ireland is under<br />
consideration. Twenty-five European Radiocommunications Office (ERO) members have<br />
implemented this recommendation, while 21 members have not. However, four of these<br />
members have either partially implemented or are planning to implement the<br />
recommendation. These statistics demonstrate that most ERO members are signatories or<br />
will be, but most importantly, our near continental neighbours are signatories, except Ireland.<br />
This in effect means that whilst the UK is not necessarily co-ordinating according to the ECC<br />
recommendation its neighbours are.<br />
Page 27<br />
abc
Table 7 below is from ERO Frequency Information System (EFIS), which outlines the<br />
frequency band, the type of allocations and associated applications for use within Europe.<br />
Table 7: Frequency table from EFIS of 450 – 470 MHz band allocations and applications<br />
3.4.1 FM38<br />
FREQUENCY BAND ALLOCATIONS APPLICATIONS<br />
450.0 - 455.0 MHz MOBILE On-site paging (440.0 - 470.0 MHz)<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
PMR/PAMR (440.0 - 470.0 MHz)<br />
Analogue cellular (450.0 - 460.0 MHz)<br />
455.0 - 456.0 MHz MOBILE On-site paging (440.0 - 470.0 MHz)<br />
PMR/PAMR (440.0 - 470.0 MHz)<br />
Analogue cellular (450.0 - 460.0 MHz)<br />
456.0 - 459.0 MHz MOBILE On-site paging (440.0 - 470.0 MHz)<br />
PMR/PAMR (440.0 - 470.0 MHz)<br />
Analogue cellular (450.0 - 460.0 MHz)<br />
On-board communications (457.525 - 457.575 MHz)<br />
459.0 - 460.0 MHz MOBILE On-site paging (440.0 – 470.0 MHz)<br />
PMR/PAMR (440.0 - 470.0 MHz)<br />
Analogue cellular (450.0 - 460.0 MHz)<br />
460.0 - 470.0 MHz MOBILE On-site paging (440.0 – 470.0 MHz)<br />
PMR/PAMR (440.0 - 470.0 MHz)<br />
Analogue cellular (460.0-470.0MHz)<br />
On-board communications (467.525 - 467.575 MHz)<br />
A review of this table tells us that, PMR/PAMR and paging are consistent with the allocations<br />
in the UK, whilst analogue cellular is probably historic, back to the NMT450 standard and is<br />
therefore not an issue.<br />
ECC working group FM38 has the remit of developing and reviewing ECC Decisions,<br />
Recommendations, Reports and other deliverables on PMR/PAMR, Public Protection,<br />
Disaster Relief and cross-border coordination issues based on the requests from Working<br />
Group Frequency Management (WGFM).<br />
FM38 are currently engaged in developing a new draft ECC Decision on the "harmonisation<br />
of frequency bands for the implementation of digital Public Protection and Disaster Relief<br />
(PPDR) radio applications in the 400 MHz bands". This draft ECC Decision covers frequency<br />
bands for narrow band as well as for wide band PPDR radio applications.<br />
Similar to ECC Decision (04)06 on Wide Band Digital PMR/PAMR this Decision will allow<br />
flexibility and technology neutrality. It is important to note that the UK has not adopted this<br />
Page 28<br />
abc
decision, but Ireland and the Netherlands have, with a commitment from France that they will<br />
also adopt the decision.<br />
Once this new ECC Decision on PPDR at 400 MHz frequency range is adopted, it is<br />
expected that it will replace ERC Decision (96)01 on narrow band emergency services.<br />
3.5 UK Regulatory Environment for <strong>UHF2</strong><br />
The status of the <strong>UHF2</strong> band remains uncertain, as no decision has been made whether the<br />
undertakings of the alignment project remain active:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Radiocommunications Agency, 450-470MHz Band Alignment Project<br />
Information Sheet: “The alignment of frequencies will require the majority of<br />
licensees to adjust or replace their existing equipment. Licensees will be<br />
responsible for arranging replacement or re-tuning of their own equipment.<br />
Service providers should be able to provide the expertise necessary for this<br />
task. The Agency will notify all licensees individually of their new frequency or<br />
frequencies and the date upon which this change will be implemented. The<br />
intention will be to give six months notice of the date when the change is to be<br />
given effect.”; and latterly<br />
<strong>Ofcom</strong>, Withdrawal of the Band Re-alignment Project, Update on the<br />
450-470MHz (<strong>UHF2</strong>) Band Alignment project: “Until further decisions are<br />
made and communicated to stakeholders, the relevant licences should be<br />
considered as remaining subject to the notices of re-alignment previously<br />
issued by the RA/<strong>Ofcom</strong>.”<br />
This last statement above effectively means that current <strong>UHF2</strong> licensees could still be given<br />
6 months notice to move from their frequencies even though the band alignment project was<br />
withdrawn in July 2004.<br />
The Spectrum Framework Review (SFR) Implementation plan 8 amalgamated <strong>Ofcom</strong>’s<br />
polices for Spectrum Trading and Liberalisation for the future spectrum management, with a<br />
plan relating to specific sectors and spectrum bands. This document, together with the<br />
statement on measures to liberalise and simplify business radio licensing in January 2007 9<br />
(to be introduced after Q1 2008), will result in the reduction of the current twenty-one<br />
business radio licence products to five. This exercise will result in a simpler licence product<br />
structure enabling easier trading of rights and liberalisation by removal of service<br />
segmentation of spectrum. One of the most significant changes is the introduction of a 5<br />
year revocation notice period for licences, providing security of licence tenure. Table 8<br />
8 Spectrum Frame work Implementation Plan: http://www.ofcom.org.uk/radiocomms/sfr/<br />
9 A statement on measures to liberalise and simplify Business Radio licensing (including measures to extend trading):<br />
http://www.ofcom.org.uk/consult/condocs/brtrading/statement/<br />
Page 29<br />
abc
depicts the timetable for introduction of spectrum trading and the simplification of business<br />
radio licenses.<br />
Table 8 Timetable for the introduction of spectrum trading and licence simplification in<br />
<strong>UHF2</strong> 10<br />
Onsite PBR(1) includes Onsite Speech and Data Systems and On site Hospital Paging and Emergencies Speech<br />
Systems, Onsite PBR(2) includes On-site One-Way Paging<br />
Source: Mott MacDonald<br />
Although the SFR refers to spectrum trading being enabled for the E&PSS in 2006, it is<br />
understood that this has subsequently changed to 2008 11 . This new date is likely to coincide<br />
with the proposal for the introduction of Crown Recognised Spectrum Access (CRSA), which<br />
is mentioned in the Independent Audit of Spectrum Holdings and the subsequent<br />
Governments Response 12 .<br />
To date, with the licence products that have been made tradable, only one trade has<br />
happened in <strong>UHF2</strong>, which was a simple ‘take-over’ of a licence. As a result, spectrum trading<br />
and liberalisation have not had any significant impact on Business Radio in <strong>UHF2</strong> to date.<br />
However, the impact of these new liberalisation and simplification measures should further<br />
remove regulatory barriers for self-configuration, by providing the license holder more<br />
coherent rights, enabling the market to take the most appropriate action. It is therefore<br />
considered that the impact of trading and liberalisation will become more significant in the<br />
<strong>UHF2</strong> band post 2008.<br />
10 This table refers to published timescales and documents as of November 2007, which is subject to change.<br />
11 Confirmed by PSSPG members<br />
12 Independent Audit of Spectrum Holdings: http://www.spectrumaudit.org.uk<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 30<br />
abc
3.6 Summary & Conclusions<br />
This chapter has reviewed spectrum regulation at a high level from both an international<br />
perspective (the ITU), through to national implementation (the UK). We make four main<br />
points:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The 450-470MHz band will become an IMT-2000 band, which may in the<br />
future ensure that the UK must protect these services from interference as<br />
they could be deployed in neighbouring countries;<br />
Liberalisation and Trading will become the norm with the market deciding the<br />
future use of the bands, enabling the <strong>UHF2</strong> licensees to reconfigure there<br />
spectrum should they need to;<br />
Most of the UK’s continental neighbours have adopted ECC Recommendation<br />
TR25-08, which enables international co-ordination, but the UK has not<br />
adopted this Recommendation, this could in time cause co-ordination<br />
problems;<br />
The UK regulation surrounding the <strong>UHF2</strong> band, regarding the 6 month notice<br />
period, remains an issue of uncertainty on security of tenure for stakeholders.<br />
Page 31<br />
abc
4 Technology and Market<br />
4.1 Introduction<br />
In this chapter, we examine three issues with regard to technologies and services available<br />
with <strong>UHF2</strong> spectrum and provide potential market demand statistics. Understanding the<br />
possible technology and service developments and future market demand will inform any<br />
further policy recommendations. The issues covered are:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Technologies available for <strong>UHF2</strong> spectrum including Digital Mobile Radio<br />
(DMR), Tetra, Professional Mobile Radio (PRM) and associated services<br />
such as mobile TV;<br />
Market demand review of projected sales;<br />
Future options for technology and service development.<br />
We summarise our findings and provide conclusions at the end of the chapter.<br />
4.2 Technology and Services<br />
The technology available for the <strong>UHF2</strong> spectrum falls into two high level categories;<br />
Narrowband (=100 kHz) and high data rates (>100kbps) providing short range<br />
(
from Airwave (380-400MHz). Potential non-civil adopters of TETRA (e.g. Airports) have been<br />
limited to either using the Airwave service (if on the sharers list) or negotiating with Arqiva to<br />
use the only non-civil UK spectrum within the tuning range of TETRA with a 10MHz duplex<br />
split, and aligned with TR25/08. This recently awarded spectrum is 412-414MHz, paired with<br />
422-424MHz. There is a further civil allocation of 10MHz duplex split spectrum found at 410-<br />
412, paired with 420-422MHz, which is managed by the Public Safety Spectrum Policy<br />
Group (PSSPG).<br />
Historically digital PMR/PAMR technology that requires duplex split has generally been<br />
10MHz in the CEPT TR25-08 configuration. However, we now have exceptions in Digital<br />
Mobile Radio (DMR), a digital standard that can have varying duplex split and a few<br />
manufacturers have recently started to provide TETRA at various duplex split (non-<br />
standard). The technology currently used within <strong>UHF2</strong> is predominantly PMR and paging<br />
type services, which are spectrally very similar, at either 12.5 or 25 kHz channel split.<br />
The introduction of the new DMR standard, with its three tiers (discussed in more detail in<br />
Section 4.2.1), now offers the market a real distinct digital alternative to standard analogue<br />
PMR; this can be seen below in Table 9. Prior to the introduction of DMR, only TETRA and<br />
Project 25 narrowband digital technology was available. This was designed to serve the<br />
E&PSS market and required the 10MHz duplex split, which is in short supply to non-civil<br />
users. However, now the majority of the non-civil markets needs for digital PMR/PAMR can<br />
be met by the DMR technology.<br />
Source: Mott MacDonald<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 9 Radio Technology and Addressable Markets<br />
Page 33<br />
abc
The benefits of digital PMR over analogue PMR have, until recently, centred on the cost of<br />
the equipment as analogue technology has been more cost effective. This was mainly due to<br />
TETRA, TETRAPOL and Project 25 being the only realistic narrowband deployable<br />
technologies. However, these technologies have focused on the Public Safety/Mission<br />
Critical Markets and are usually not cost effective for Professional/Business Critical markets.<br />
The price gap between digital and analogue PMR, and the lack of available 10MHz duplex<br />
spaced spectrum in the UK, have until recently meant sales of digital PMR to the E&PSS<br />
market only, as this market has access to the correctly configured spectrum.<br />
The availability of UHF spectrum configured with a 10MHz duplex split as CEPT TR 25/08 is<br />
as follows:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
380-400MHz and 410-12 paired with 420-422MHz managed by the PSSPG<br />
for use by the E&PSS;<br />
412-414 paired with 422-424MHz, licensed to Arqiva 16 .<br />
However, recently manufacturers have produced TETRA standard equipment in the UK on<br />
10MHz, reversed ERC Recommendation TR 25-08 (10MHz duplex spaced but the BS Tx is<br />
opposite to TR 25-08) and 7MHz duplex split, allowing for on-site TETRA systems to be<br />
deployed (e.g. Heathrow T5).<br />
DMR has recently changed the paradigm from an inability to deploy digital services in <strong>UHF2</strong>,<br />
to one that allows cost-effective digital radios, which have programmable duplex splits<br />
allowing them to operate on the same channels as Analogue PMR. The DMR standard was<br />
developed to replace Analogue PMR. This is a simple form-fit replacement as the two<br />
technologies are spectrally the same, conforming to the same ETSI spectral requirements.<br />
In effect, licensees of Analogue PMR can replace the equipment directly, employing the<br />
same feeders, antenna systems and radio spectrum licence with DMR and benefit<br />
immediately from the added features that digital technology brings.<br />
The main benefit of both TETRA and DMR digital technology is a doubling of spectrum<br />
efficiency using TDMA, allowing four voice channels on a 25 kHz channel for TETRA and<br />
two voice channels on a 12.5 kHz channel for DMR.<br />
The benefits of digital technology include:<br />
Cost effective virtual-duplex operation, by using TDMA for forward and<br />
reverse channels<br />
Battery saving techniques, inherent within the protocol. (e.g. DMR has<br />
approximately a 40% increase in battery life over analogue 17 )<br />
16 No permanent systems have been deployed yet in 412 MHz but they have numerous bids out to current and potential<br />
customers that will result in systems being deployed in 2008.<br />
17 According to a leading manufacturer<br />
Page 34<br />
abc
4.2.1 DMR<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Call interruption.<br />
See ETSI TR 102 398 18 and TR 300-4 for a complete list of DMR and TETRA features.<br />
The DMR standard covers three tiers of products:<br />
Tier I – 6.25 kHz Channel split, which is PMR446 equivalent, is now legal in<br />
the UK, for latest news see <strong>Ofcom</strong> web-updates 19<br />
Tier II – 12.5 kHz Channel split, employing 2 slot-TDMA, which is the<br />
conventional PMR equivalent, peer-to-peer and through a repeater.<br />
Tier III – 12.5 kHz Channel Split, employing 2 Slot-TDMA, which is the<br />
trunked and quasi-synchronous/simulcast variant.<br />
A leading manufacturer currently offers Tier II products, with a frequency tuning range of<br />
403-470MHz and duplex split of 3.5, 5 and 10MHz. The duplex split(s) have been through<br />
the approval process, but the duplex split is fully programmable, enabling most duplex splits,<br />
particularly splits that currently exist within <strong>UHF2</strong>. In addition, the price gap between<br />
analogue and digital radios has narrowed with DMR, with a typical terminal price being 20%<br />
more expensive for DMR over analogue.<br />
DMR Tier III, trunked products are expected to become available in 2008 and like Tier II<br />
products will be available in any practicable duplex split.<br />
4.2.2 PMR Technology Evolution to Higher Data Rates<br />
Mobile Radio network design requires a balance between coverage capability and data<br />
rates. Law’s of Physics determine the maximum data rate of a given channel and states that<br />
the channel bandwidth will affect the data rate, amongst other factors. Therefore, for higher<br />
data rates additional spectrum is required and/or new, innovative modulation and coding<br />
schemes.<br />
The two most prevalent PMR/PAMR technologies capable of providing higher bandwidths to<br />
meet the operational requirements for a self-provided, or potential out-sourced operator<br />
provided network are TETRA release 2 and CDMA450.<br />
i. TETRA Evolution<br />
TETRA Release 1 is a digital trunked mobile radio standard developed by ETSI. The TETRA<br />
standard was developed to meet the needs of traditional PMR user organisations, in<br />
particular the E&PSS feature requirements and specific security issues. The TETRA<br />
standard has been developed over a number of years and continues to evolve.<br />
18 Digital Mobile Radio (DMR) General System Design ETSI TR 102 398, available from www.etsi.org<br />
19 DMR446 update http://www.ofcom.org.uk/consult/condocs/wireless_exemption/statement/<br />
Page 35<br />
abc
The significant developments in TETRA Release 2 consists of the following:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Trunked Mode Operation (TMO) Range Extension;<br />
Adaptive Multiple Rate (AMR) Voice Codec ;<br />
Mixed Excitation Liner Predictive, enhanced (MELPe) Voice Codec;<br />
TETRA Enhanced Data Service (TEDS).<br />
The most significant development, in terms of the emerging requirement for greater<br />
bandwidth, is TETRA Enhanced Data Service (TEDS). This is a High Speed Data (HSD)<br />
service dynamically using multiple RF channel bandwidths and data rates for flexible use of<br />
PMR frequency bands. TEDS is fully compatible with TETRA Release 1 and allows for ease<br />
of migration. The RF channel bandwidths supported in TEDS are 25, 50, 100 and 150 kHz<br />
and when using the 4 TDMA slots in the channel, the maximum data rates in Table 10 can<br />
be achieved.<br />
Table 10 TEDS Packet Data Throughput (Kbps)<br />
Modulation<br />
π/4 DQPSK 15.6<br />
π/8 D8PSK 24.3<br />
Channel Widths<br />
25kHz 50kHz 100kHz 150kHz<br />
4-QAM 11 27 58 90<br />
16-QAM 22 54 116 179<br />
64-QAM 33 80 175 269<br />
64-QAM 44 107 233 359<br />
64-QAM 66 160 349 538<br />
The perception in the communications industry is that the first major users of TETRA TEDS<br />
will be the E&PSS networks, which in the UK is a managed service through Airwave using<br />
TETRA Release 1, utilising spectrum at 380-385, 390-395MHz. However, this band does not<br />
have any capacity for implementation of additional TEDS channels. If TEDS was to be<br />
implemented in the UK for the E&PSS, the spectrum configuration would need to be CEPT<br />
TR25/08 aligned and an estimated 2x10MHz of spectrum would be required to meet the<br />
capacity requirements.<br />
Page 36<br />
abc
Assuming that an E&PSS network operator enters the market for TEDS products, they will<br />
be available during the next 2 years, according to the TETRA MOU. The real market uptake<br />
will depend on whether governments allocate budgets to TEDS, particularly having just<br />
invested in narrowband TETRA networks. Market uptake could also be promoted if new<br />
E&PSS communication network projects invest in TETRA TEDS right from the start (and<br />
have the right spectrum assigned soon).<br />
ii. CDMA – PAMR<br />
The air interface used in CDMA-PAMR 20 is known as CDMA 2000 1x. This is specified in the<br />
relevant parts of the TIA standards IS-2000.1 to IS-2000.5, and the radio performance is<br />
specified in IS-97 and IS-98. CDMA-PAMR is designed for use in the frequency bands 410-<br />
430 MHz, 450-470MHz, and 870-876/915-921 MHz. A separation of 1.25MHz is employed<br />
between centre frequency carriers of adjacent CDMA-PAMR carriers, with a minimum of 1<br />
channel required for a network, but typically a minimum of two channels (2 x 2.5MHz) are<br />
required. This standard is capable of 307kbps from the Base to mobile (downlink) and<br />
153kbps in the uplink. This is achieved by adding multiple channels (9.6 or 14.4kbps)<br />
together to achieve higher data rates. There is an upgrade path as 3G services evolve to<br />
higher data rates (2.4Mbps) and more importantly, CDMA-PAMR is deemed more spectrally<br />
efficient and therefore has greater capacity per MHz than TETRA TAPS and GSM-R<br />
according to ECC Report 42 21 .<br />
From a European perspective 19 CDMA450 networks have already been deployed with a<br />
further 8 others planned (source www.450world.org, Oct 2007).<br />
The majority of these networks operate in "Block A", which covers 452.5 - 457.5 / 462.5 -<br />
467.5 MHz (with standard CEPT 10MHz duplex split). The planned Irish CDMA450 network<br />
will not be deployed in <strong>UHF2</strong>, but in UHF1 410-430MHz, so should not cause continental<br />
interference into the UK at <strong>UHF2</strong>. It is understood the licensee of the potential CDMA450<br />
network in Ireland wishes to obtain spectrum in Northern Ireland to provide a seamless<br />
network, with <strong>UHF2</strong> being a candidate band.<br />
CDMA450 technology now offers a dual band scheme, 450MHz and 2100MHz to provide an<br />
upgrade to 3G services to extend coverage into rural areas.<br />
4.2.3 Mobile Television<br />
Mobile Television is a service in the UK, which is in need of appropriate spectrum. The<br />
Digital Dividend may provide access to the appropriate spectrum, but spectrum is unlikely to<br />
be made available until 2012.<br />
The main frequency bands for Mobile Television are:<br />
20 CDMA PAMR – Code Division Multiple Access – Public Access Mobile Radio: for details see the ETSI SRDoc submitted to<br />
FM38 at: http://www.nodnett.no/FILES/FM38(2002)81-SRDoc_for_CDMA-PAMR_V0.1.1.pdf<br />
21 Spectrum Efficiency of CDMA-PAMR and other Wideband systems for PMR/PAMR, Granada, February 2004<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 37<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
VHF (170-230 MHz, or a portion of it);<br />
UHF-IV/V (470-862 MHz, or a portion of it);<br />
L (1.452-1.492 GHz).<br />
The three most prominent technologies, DVB-H, DMB and MediaFLO, require dedicated<br />
spectrum. DVB-H is available in all three bands, DMB is available in VHF-III and L Band, and<br />
MediaFLO is available from 450MHz - 3GHz.<br />
Therefore the most likely candidate technologies for use in the 450-470MHz band, for<br />
supplying Mobile Television, are DVB-H and MediaFLO, which each have a channel split of<br />
5, 6, 7 or 8MHz. However, none of these technologies have been manufactured for the 450-<br />
470MHz band and are unlikely to be deployed in this band owing to global economies of<br />
scale. Therefore, it is unlikely that Mobile television technologies will be deployed within the<br />
<strong>UHF2</strong> band.<br />
4.3 Projected Sales of PMR Terminals<br />
<strong>Ofcom</strong> commissioned a bespoke market research report in November 2007, which focused<br />
on the market for <strong>UHF2</strong> terminals. The objective of the report was to provide evidence from<br />
the market as to whether Digital PMR is seen as a replacement for analogue PMR. We<br />
summarise the results in this section.<br />
4.3.1 European Market<br />
The PMR industry is predicted to ship 33% more Digital UHF terminals in Europe, over the<br />
period 2006 – 2010. Analogue shipments will decrease over the same period by 6%.<br />
Therefore in 2008, digital shipments of UHF PMR terminals will eclipse analogue shipments<br />
for the first time.<br />
The shipment of Digital <strong>UHF2</strong> PMR terminals in Europe is predicted to rise by 42% over the<br />
period 2006-2010, whilst analogue shipments will decrease over the same period by 5%.<br />
This means that during 2009, digital shipments will eclipse analogue in the <strong>UHF2</strong> band.<br />
Page 38<br />
abc
4.3.2 UK Market<br />
The UK market for terminals in the rest of UHF can be seen below at Figure 10, where digital<br />
terminals will see an increase of 16% over the period, with analogue terminals will decrease<br />
over the period by 5%.<br />
Units Shipped<br />
140,000<br />
120,000<br />
100,000<br />
80,000<br />
60,000<br />
40,000<br />
20,000<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
0<br />
Source: IMS Research<br />
Figure 10 UK Market for UHF terminals<br />
2006 2007 2008 2009 2010<br />
Analogue Digital<br />
The UK market for terminals in <strong>UHF2</strong> can be seen below Figure 11, where digital terminals<br />
will see a rapid increase over the next 4 years, with analogue terminals decreasing over the<br />
period by 5%.<br />
Units Shipped<br />
16,000<br />
14,000<br />
12,000<br />
10,000<br />
8,000<br />
6,000<br />
4,000<br />
2,000<br />
0<br />
Source: IMS Research<br />
Figure 11 UK <strong>UHF2</strong> Terminals<br />
2006 2007 2008 2009 2010<br />
Analogue Digital<br />
Page 39<br />
abc
4.3.3 UK Market Analysis<br />
This market review includes Analogue and Digital (Tetra, Tetrapol, P25, Iden, DMR) and<br />
excludes PMR446 or dPMR446.<br />
The forecasts for the <strong>UHF2</strong> band have assumed no frequency band will be allocated for<br />
TETRA in the <strong>UHF2</strong> band (if not on a limited/local basis) and that people will therefore opt<br />
for a DMR Tier 2 (or Tier 3) solution for the band.<br />
It is IMS Research's opinion that as much as 80 -90% of the growth in the <strong>UHF2</strong> band will be<br />
DMR (starting end 2007). This assumes that no nationwide <strong>UHF2</strong> band is allocated to<br />
TETRA for civil/commercial use.<br />
4.4 Summary & Conclusions<br />
This chapter has covered the current wide and narrow band technologies that could be<br />
potentially used in the <strong>UHF2</strong> band. Also by looking at market forecasts, we have determined<br />
the likely uptake of Digital vs Analogue PMR terminals over the next 3 years in <strong>UHF2</strong>.<br />
We have the concluded the following:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
For the introduction of narrow band digital technology, a 10MHz duplex split is<br />
no longer required;<br />
Digital PMR technology will out sell analogue over the next two years in the<br />
UHF bands;<br />
DMR will be the digital narrowband technology of choice over the next few<br />
years, which will increase capacity of networks, with users benefiting from<br />
new features;<br />
There is a market for narrowband Digital PMR technology in the UK now and<br />
in the future;<br />
CDMA450 is being used elsewhere in Europe or is planned, with particular<br />
mention to Ireland, where a CDMA450 network is planned for use in the 410-<br />
430MHz band;<br />
CDMA450 is seen as a technology to deliver 3G services to rural areas.<br />
Page 40<br />
abc
5 Reconfiguration drivers and challenges<br />
5.1 Introduction<br />
This chapter discusses the overarching drivers and challenges for the reconfiguration of the<br />
<strong>UHF2</strong> band and includes a summary of previous studies in this area together with<br />
stakeholder views and considerations.<br />
5.2 Drivers and challenges for band alignment<br />
The challenges facing any re-configuration will be similar to the challenges that faced the<br />
industry during the proposed band alignment project in 2004. The conclusions from an open<br />
forum hosted by the Spectrum Management Advisory Group (SMAG) in 2003 22 can be<br />
summarised as follows:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Economics: The economics <strong>study</strong> concluded that the value to the UK<br />
economy of the spectrum that could be released was over £200 million<br />
Interference: By aligning the spectrum with Europe, a 32dB improvement of<br />
isolation from continental interference would be achieved.<br />
Spectrum Scarcity: The impact of co-ordination with RAF Fylingdales on<br />
UHF1 (410-430MHz), will reduce the usability of UHF1 for additional systems,<br />
particularly high sites and power. This alternate band for UHF Business<br />
Radio services, makes <strong>UHF2</strong> spectrum scarce and therefore more valuable.<br />
New Technology & Harmonisation: The introduction of new technology and<br />
the additional benefits that it can bring is dependent on aligned, harmonised<br />
CEPT TR 25/08 spectrum.<br />
Yield of Spectrum: Band alignment was expected to yield an additional 2 to<br />
3 MHz of paired spectrum (in addition to spectrum returned by the E&PSS).<br />
The benefits to the UK GDP of between £247m and £430m NPV were greater<br />
than the costs.<br />
Competitive Environment: Alignment would assist the Business Radio<br />
sector to compete with operator provided services such as GSM.<br />
In 2003 the stakeholders had three main points concerning the band alignment project,<br />
namely:<br />
The cost of alignment would be expensive compared to the benefits,<br />
considering there were 17,000 licensees, with very few suffering interference;<br />
22 450-470 MHz Band Realignment Open Forum, hosted by the Spectrum Management Advisory Group (SMAG),24 October<br />
2003: http://www.ofcom.org.uk/static/archive/ra/smag/bandalignforum/450summaryfinal.doc<br />
Page 41<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
There were mission critical systems, that can not be shut down during a re-<br />
alignment process and interference from the process would not be an<br />
acceptable risk;<br />
There was a shortage of skilled engineers to undertake the actual alignment<br />
process of physically re-tuning and deploying new systems.<br />
In summary, there was concern that the alignment was not achievable or cost effective and<br />
presented too many risks. The alignment would have serious consequences for all current<br />
stakeholders, except the E&PSS. However, the industry accepted that the main benefit for<br />
alignment would be for future protection from continental interference; but protection from<br />
interference for some users does not necessarily mean that all users should be disrupted.<br />
The stakeholders suggested that a more palatable way forward would be, rather than align<br />
the spectrum with Europe, to remedy only those services affected by continental interference<br />
in the South East.<br />
Therefore, the industry saw no immediate need to align and that interference was a problem<br />
only to <strong>UHF2</strong> services in the South East of England.<br />
5.3 Stakeholders current views on the <strong>UHF2</strong> band<br />
Mott MacDonald interviewed Key Stakeholders of the <strong>UHF2</strong> spectrum, on the current and<br />
future issues of <strong>UHF2</strong> policy. The interviewees selected were identified as a representative<br />
view of the industry (See Appendix A for a list of the key stakeholders interviewed as part of<br />
this <strong>study</strong>.)<br />
5.3.1 Representative view of <strong>UHF2</strong> Spectrum Managers<br />
<strong>UHF2</strong> Spectrum Managers account for >30% of the <strong>UHF2</strong> spectrum use.<br />
Spectrum managers in this band manage the spectrum for national infrastructure networks.<br />
These provide mission critical services, in addition to supporting broadcast services. The<br />
following summarises their position on reconfiguration of the <strong>UHF2</strong> band:<br />
Any change in configuration would cause a number of detrimental effects to<br />
networks;<br />
There is a large financial implication of replacing equipment and running a costly<br />
parallel network (24/7) so that operation and services are not interrupted;<br />
Industry would need to be satisfied that all business risks were mitigated;<br />
The cost benefit of any re-configuration would need to be clearly identified and<br />
costed to include opportunity cost and parallel networks;<br />
There is some interest based on guaranteed access to spectrum at the same<br />
market rate but only if <strong>Ofcom</strong> was to underwrite the full business cost;<br />
Page 42<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
There is an interest in how the development of technology proceeds in the future to<br />
help make the most efficient use from the spectrum.<br />
5.3.2 Representative view of Trade Associations<br />
The Trade Associations represent users of the business radio spectrum (>30% of <strong>UHF2</strong><br />
spectrum) and manufactures of communications equipment. The following points summarise<br />
their position on reconfiguration of the <strong>UHF2</strong> band:<br />
As businesses demand more security and insurance there is an increased<br />
requirement for more of the same spectrum;<br />
There is strong support for continued licensing of the spectrum in its current<br />
configuration;<br />
Generally there is little support for re-configuration owing to the costs involved<br />
and the disruption to many of its mission critical services;<br />
It is believed that there is not enough demand for wideband systems in the<br />
<strong>UHF2</strong> band, where concentration should be on spectrum offerings higher up<br />
the band;<br />
<strong>Ofcom</strong> are to be discouraged from:<br />
setting up a third party band manager due to the increased<br />
complexities that would be involved in accessing the spectrum;<br />
creating large blocks of contiguous spectrum that could potentially<br />
be auctioned off;<br />
A swift decision on <strong>UHF2</strong> spectrum policy is needed as industry and business<br />
cannot develop their business plans with this current climate of uncertainty;<br />
A new digital narrow band technology, DMR can enable reconfiguration of the<br />
band over the air, according to a leading manufacturer.<br />
Administered Incentive Pricing (AIP) should be the incentive for moving<br />
forward in spectrum management and users involved in a trading and<br />
liberalisation environment to assist the development of sensible systems;<br />
New technology is likely to remain of a narrowband nature due to the current<br />
fragmentation of the band. However, should contiguous blocks of spectrum<br />
become available it will allow for development of networks and increase the<br />
availability of products.<br />
Page 43<br />
abc
5.3.3 Representative view of the E&PSS<br />
The Emergency and Public Safety Services (E&PSS) are allocated >30% of the <strong>UHF2</strong><br />
spectrum. The migration to the Airwave service will leave the majority of the spectrum<br />
available for re-assignment by the Public Safety Spectrum Policy Group (PSSPG).<br />
The PSSPG are planning to appoint a spectrum manager, by the end of 2008, whose role<br />
will be to understand and assess the needs within the E&PSS environment and engage the<br />
market on a commercial basis. The following points summarises the position of the PSSPG<br />
on reconfiguration of the <strong>UHF2</strong> band:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Provided the same numbers of frequencies were assigned in a known,<br />
interference-free environment some of the E&PSS services within <strong>UHF2</strong><br />
could be re-programmed to use alternate frequencies within the band. This<br />
reprogramming could aid the availability of contiguous spectrum within the<br />
band.<br />
The impact on individual Fire and Rescue Services (FRS) would be significant<br />
capital cost and a need for a 3-year lead-time.<br />
E&PSS will be able to acquire spectrum in CEPT TR 25/08 configuration for<br />
the Future Radio Network (FRN), providing wideband services, which could<br />
be a key role of the future E&PSS spectrum manager. The FRN will either<br />
complement or replace Airwave which is expected to start deployment around<br />
2015, where it is currently estimated that at least 2 x 10 MHz of aligned<br />
spectrum will be required.<br />
Most of the use of the E&PSS 7MHz of spectrum is reducing as services<br />
migrate to Airwave. However, use by the prison services and other services<br />
will remain with no current plans to move, meaning that spectrum will not<br />
necessarily be contiguously clear of use.<br />
Temporary use could be made of the E&PSS part of the <strong>UHF2</strong> band ensuring<br />
that the E&PSS had a sufficient level of protection from interference.<br />
5.3.4 Representative view of Potential New Entrants of aligned <strong>UHF2</strong> spectrum<br />
Potential new entrants of aligned <strong>UHF2</strong> spectrum would be interested in acquiring spectrum<br />
under particular circumstances in relation to type of configuration and duplex split. The<br />
following points summarise their position on reconfiguration to the <strong>UHF2</strong> band:<br />
Spectrum should be made available in a ‘useable, contiguous configuration’ of<br />
at least 2 x 3MHz with a preference for 2 x 5MHz (in the configuration of the<br />
latest technology (CEPT Aligned)) or 1 x 10MHz as a minimum.<br />
Page 44<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
New entrants would look to deploy technologies such as CDMA450 (452.5 -<br />
457.5 (uplink) / 462.5 - 467.5 MHz (downlink) (standard CEPT 10MHz duplex<br />
split) TETRA TEDS, TD CDMA( 3G) to satisfy its customer base.<br />
For a wideband national network to be deployed in the <strong>UHF2</strong> band in the UK,<br />
regulations would be needed to support technology neutrality, spectrum<br />
masks and guard bands allowing an operator to rollout a viable network.<br />
Cross-border co-ordination would be required to enable a viable national<br />
network (around 200 to 300W max ERP). New entrants would prefer a normal<br />
network-to-network interference model used for cross-border coordination to<br />
allow for coverage in border areas, rather than the recent no interference / no<br />
coverage policy adopted by <strong>Ofcom</strong>.<br />
New entrants see demand emerging from the Emergency services, for<br />
deployment of a wideband network.<br />
New entrants believe that the spectrum would be worthless if awarded as it<br />
stands. The options either are seen as an overlay auction or vacated E&PSS<br />
spectrum thereby enabling swift reconfiguration for the introduction of<br />
wideband services.<br />
Preference would be for national licences.<br />
5.3.5 Representative view of Licensees<br />
The licensees that were interviewed use both on-site voice and data systems throughout the<br />
UK and national wide area voice and data systems. The following points summarise their<br />
position on reconfiguration of the <strong>UHF2</strong> band:<br />
Licensees generally support the use of <strong>UHF2</strong> spectrum in its current<br />
configuration and do not believe that any change in configuration would<br />
necessarily increase the value use of spectrum. Also licensees believe re-<br />
configuration would have a huge commercial risk and cost to customers;<br />
Some licensees would be interested in deploying TETRA systems;<br />
Some licensees have already deployed TETRA systems through the use of<br />
recent changes in the technology that allow a reverse aligned configuration<br />
and non standard duplex split e.g. 7MHz;<br />
Some licensees could potentially realign some channels with Europe as and<br />
when reconfiguration takes place. However, it would be necessary to create<br />
some temporary frequencies to aid migration to a new vacant piece of<br />
spectrum allocated for the particular service migrating;<br />
Page 45<br />
abc
5.4 Summary & Conclusions<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Licensees identified that it would allow them to maximise benefit and minimise<br />
cost if a migration plan over the next 5-10 years was developed.<br />
This chapter has reviewed drivers for band alignment, previous studies and stakeholders’<br />
views in 2004 during the band alignment project and now, 2007. This review highlights the<br />
concerns of the industry, should reconfiguration of the band be mandated. In addition, it is<br />
noted that the industry wish to only address the interference cases, if needed rather than a<br />
mandated re-configuration of the band.<br />
In the light of the findings of this chapter, we conclude the following:<br />
The original drivers for the alignment project are mainly irrelevant in the light<br />
of new regulation and technology development. The main drivers are now<br />
economic benefit and interference which will be reviewed in the following<br />
chapters;<br />
The future spectrum manager of the E&PSS will have a key role to play in the<br />
future re-configuration of the <strong>UHF2</strong> band as they will manage the largest<br />
amount of clear spectrum for potential re-assignment;<br />
There is a demand for narrowband technology, which does not need to be re-<br />
configured;<br />
The introduction of wide band systems, would probably need at least 2 x<br />
5MHz and would need a review of the adjacent channel and international co-<br />
ordination measures to make it attractive to new entrants;<br />
The stakeholders want clear guidance as to the future policy of the <strong>UHF2</strong><br />
band;<br />
Operators of mission critical services within the band would need a<br />
compelling reason, funding and assurances that any risk to outage of services<br />
was mitigated to consider any re-configuration;<br />
There is little appetite for any re-configuration with the band from incumbent<br />
licensees.<br />
Page 46<br />
abc
6 Interference environment<br />
6.1 Introduction<br />
In this chapter, we explore the interference environment within which <strong>UHF2</strong> services are<br />
affected by other UK services and interference from continental Europe. We also cover the<br />
following interference issues:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
the international coordination process for the <strong>UHF2</strong> band;<br />
the level of potential interference for aligned and un-aligned spectrum;<br />
the different interference scenarios with either narrowband or wideband<br />
technology.<br />
Supporting material and detailed results can be found in Appendices E to I at the end of this<br />
report.<br />
6.2 Interference challenges for <strong>UHF2</strong> spectrum<br />
Interference is a technically complex subject, which limits the amount of users that can be<br />
assigned spectrum and therefore its value. If the interference is too high then<br />
communications systems become unusable and, conversely, if interference is extremely low<br />
then spectrum use is inefficient. It is therefore the task of the regulator to achieve the<br />
optimum balance between acceptable levels of interference and efficient use of the<br />
spectrum, in an assigned spectrum band by the regulator. 23<br />
To aid in the understanding of interference, Appendix B provides a summary of the different<br />
types of interference that are to be considered when making assignments in the <strong>UHF2</strong> band.<br />
Also, Appendix C discusses how <strong>Ofcom</strong> currently manages interference, the instruments<br />
used and the future tools and policies.<br />
In summary, the main interference challenges are:<br />
Due to the UK’s unaligned spectrum with the continent, the UK suffers from<br />
interference, which degrades services particularly in the South East of<br />
England;<br />
The UK has a coordination method with continental neighbours that is based<br />
23 The term used by <strong>Ofcom</strong> is ‘Command and Control’.<br />
on aligned spectrum, but has no formal international agreement (e.g. HCM<br />
Agreement). The fact that there is no formal agreement could lead to harmful<br />
interference to services in the UK from the Continent, but this is not currently<br />
the case owing to the low use of the spectrum..<br />
Page 47<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
With the <strong>UHF2</strong> band having been identified as an IMT2000 band it is likely<br />
that IMT2000 systems will be deployed in the longer term, which could<br />
severely impact the licensees within this band with a likelihood of greater<br />
continental interference than is experienced now. However, it is understood<br />
that Western European National Regulatory Authorities (NRAs) are not<br />
currently considering assigning wideband systems in the <strong>UHF2</strong> band owing to<br />
the current use of narrowband services.<br />
6.3 Analysis of the continental interference environment<br />
To understand the impact of the possible <strong>UHF2</strong> band continental interference we have<br />
modelled the environment based on the current requirements of the accepted baseline co-<br />
ordination agreement for this band (CEPT TR25-08).<br />
Our analysis is based on the following criteria, parameters and assumptions:<br />
the continental interference environment has been modelled as zero;<br />
Ireland is also not aligned (same as the UK) and as a result has not been<br />
taken into account for modelling of continental interference in this <strong>study</strong>;<br />
the results present the scenario of base stations from the continent<br />
transmitting to the maximum coordination parameters from CEPT TR25-08.<br />
The interference plot in Figure 12 shows interference from transmissions generated from the<br />
coast of France, Belgium and Holland to the coastline of the UK. The interference plot shows<br />
the threshold levels for 1% (Blue), 5% (Yellow) and 10% (Red) time into a base station<br />
receive antenna at 10m above ground level. This plot is the interference that the UK would<br />
see, if the continental base stations were meeting the coordination requirements in the <strong>UHF2</strong><br />
band, and the UK <strong>UHF2</strong> band was aligned.<br />
Figure 12 Interference plot of<br />
continental stations into UK to<br />
mobiles at 10m<br />
Source: Mott MacDonald/ATDI<br />
Page 48<br />
Figure 13 Interference plot from<br />
continental Europe to typical base<br />
station at 30m agl<br />
abc
This scenario would be valid if the band was aligned and interference was into mobile<br />
receivers but because there is a band reversal 24 between the UK and the continent in most<br />
cases, the interference is base station to base station. Therefore the parameters used in co-<br />
ordination of a 10m above ground level (agl) coordination height and 10% of the time are<br />
pessimistic.<br />
The issue is that with band reversal the interference is base station transmit (continent) to<br />
base station receiver (UK) and unlike mobile units, base stations are stationary and hence<br />
need to be protected for a lesser percentage (much less than 10%) of time. In addition, the<br />
base station receive antenna heights tend to be greater than 10m agl (using the data<br />
supplied by <strong>Ofcom</strong> the average antenna height in south eastern UK is around 15m with a<br />
maximum of 160m.<br />
Figure 13 shows the interference from the continent to a typical base station at 30m agl.<br />
Where the mobile can cope with 10% time interference, the base station usually requires 1%<br />
time interference or better. Although the blue plot represents 1% of time which is<br />
approximately 3.5 days per year, for some critical systems this amount of interference<br />
cannot be tolerated due to their high availability requirements (some as high as 99.99% of<br />
time). As an indication of the severity of the impact on licensees, the area where the<br />
interference is present for 1% time or greater is around 27,500km 2 and encompasses around<br />
8000 of the records supplied by <strong>Ofcom</strong> (>30%). This is mainly due to the concentration of<br />
radio use in the South East, particularly London.<br />
The international coordination level of 20dBµV/m for 10% time at 10m agl will cause<br />
significant interference into UK base station receivers. The area over which a reversed<br />
aligned UK base station receiver would be degraded for 1% of time is in fact much larger<br />
than the co-ordination limit suggests. The interference of the continental network to a level<br />
where the interfering signal is 3dB greater than the typical receiver noise floor (-129dBm)<br />
from any single continental base station is shown in the Figure 14 below.<br />
24 Band Reversal – The <strong>UHF2</strong> spectrum band in the UK base station transmitters are on the same frequency as base<br />
station receivers in the Continent<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 49<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 14 Area of UK where base station receiver at 30m agl will have a<br />
cumulative signal 3dB above the noise floor for 1% of time<br />
Source: Mott MacDonald/ATDI<br />
This is an area of some 78,000km 2 and covers around 16,000 of the records supplied by<br />
<strong>Ofcom</strong> (>60%). The cumulative interference effect of multiple continental interferers could be<br />
even larger.<br />
6.4 Analysis of the affects of interference in different spectrum configurations<br />
In order to consider future implications of <strong>UHF2</strong> spectrum configuration, a high level<br />
representative view of the impact of narrowband and wideband services in the UK and on<br />
the continent were modelled. The following three modelling scenarios were undertaken to<br />
determine the effects of continental interference on the representative modelling areas of<br />
UK 25 :<br />
1) Interference levels determined between UK only assignments, excluding<br />
continental interference. This provides the base-line interference case.<br />
2) Interference considering UK (CEPT reversed) and Europe CEPT aligned<br />
and the base-line case (1). This is the current situation.<br />
3) Interference considering UK (CEPT reversed) and Europe CEPT reversed<br />
25 Modelling areas defined in Appendix E and Appendix F<br />
and the base-line case (1). Although the continent is changed to match the<br />
UK, the effect is that same as aligning the UK to Europe.<br />
Page 50<br />
abc
6.4.1 Interference to narrowband systems in the UK<br />
The detailed results of the modelling of interference to narrowband systems are at Appendix<br />
E: which are summarised below in Table 11, where the “Average Noise Level”, is the power<br />
sum of all the stations that are co-channel and do not block 26 the receiver for all the stations<br />
within the modelling area in dBm.<br />
Table 11 Noise levels at UK base stations at 1% time for base-base interference<br />
Base Stations<br />
Modelling area<br />
No Continental<br />
Interference<br />
CEPT aligned<br />
Continental<br />
Interference<br />
CEPT reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Average Noise Level<br />
(dBm)<br />
Average Noise Level<br />
(dBm)<br />
Average Noise Level<br />
(dBm)<br />
Source: Mott MacDonald/ATDI<br />
Thames Gateway Birmingham Bradford<br />
Page 51<br />
-113.8 -118.34 -125.8<br />
-100 -113 -125<br />
-111.6 -118.2 -125.79<br />
The table shows us that the difference of impact for continental interference for 1% of time<br />
(base station to base station) is around an average of 11dB for the Thames Gateway, 5dB<br />
for Birmingham and 0.8dB in Bradford. Therefore, there is significant interference reduction<br />
in the South East but upon moving North into Bradford the impact becomes negligible.<br />
If UK systems were CEPT aligned there would be an average of 2.2dB more noise in the<br />
Thames Gateway than if there was no continental interference. This increases to an average<br />
of nearly 14dB when the UK is CEPT reversed. This effect is demonstrated in the<br />
Birmingham area to a lesser extent; however, in the Bradford area continental interference is<br />
negligible either CEPT aligned or reversed. This is mostly likely down to the density of<br />
assignments in each region.<br />
26 ‘Block the receiver’- in Business Radio terms, this equates to co-channel sharing, where licensees ‘politely’ share the radio<br />
channel.<br />
abc
6.4.2 Interference environment when introducing wideband systems in the UK<br />
The detailed results of the modelling of interference to wideband systems are at Appendix F:<br />
and are summarised below in Table 12.<br />
Table 12 Results for isolated Wideband systems deployed in the areas of interest<br />
Base Stations<br />
Modelling area<br />
No Continental<br />
Interference<br />
CEPT aligned<br />
Continental<br />
Interference<br />
CEPT reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Average Noise Level<br />
(dBm)<br />
Average Noise Level<br />
(dBm)<br />
Average Noise Level<br />
(dBm)<br />
Source: Mott MacDonald/ATDI<br />
Thames Gateway Birmingham Bradford<br />
Page 52<br />
-97.1 -96.1 -100.68<br />
-84.1 -82.95 -87.98<br />
-84.03 -82.94 -87.97<br />
We conclude the following based on the results from Table 12 and Appendix H:<br />
Continental stations will have some effect on the wideband systems in the<br />
Thames Gateway area in terms of increased noise level and number of<br />
blockers but this would drop if the wideband network was CEPT aligned. This<br />
continental interference effect is also seen in Birmingham to a less extent and<br />
is negligible in Bradford;<br />
UK narrowband stations under the current trading rules have a catastrophic<br />
effect on wideband systems. The effect of narrowband systems in the UK is to<br />
increase the noise levels in the wideband systems by 13 -14dB under the<br />
current trading rules;<br />
In the cases where the continental interferers are either aligned or reversed<br />
shows that, similar to the narrowband situation, continental interference has<br />
significant effect in the Thames Gateway area. The results also show that if<br />
the wideband system becomes CEPT aligned there is an improvement;<br />
In all cases narrowband users who are co-channel to wideband users suffer<br />
greater noise and blocking unless there is a very large separation distance<br />
between the two systems. In general the degradation of the narrowband<br />
systems is in the range 5 to 8dB extra noise and doubling / tripling of the<br />
blocking numbers. As additional wide band systems are implemented, the<br />
modelling tends to indicate that the noise levels on the existing narrowband<br />
systems will drop;<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Like narrowband systems, wideband systems in the south eastern UK would<br />
benefit with being aligned with Europe but this benefit has all but disappeared<br />
by the Midlands. The effect of narrowband systems on the wideband<br />
system(s) with the current trading rules is catastrophic decreasing the<br />
available service areas by around 75% and increasing blocking levels from 2<br />
times to 10 times as much. Considering these degradations the overall all<br />
conclusion is that the current trading rules would not allow a practical<br />
wideband system to be deployed;<br />
As more wideband systems are deployed so the noise in the wideband<br />
channel drops and the number of blockers also drops. This is because the<br />
spectral density of the narrowband systems is much higher than the<br />
equivalent wideband systems. This tends to indicate that wideband systems<br />
are possible but only if the majority of narrowband users are removed from<br />
the band and those narrowband users that are left are sufficiently far away as<br />
to produce little or no interference.<br />
Note: In the modelling exercise, we only considered narrowband users being co-channel<br />
with wideband users and have not considered adjacent channel effect of the wideband<br />
systems, which could be significant.<br />
i. Interference effects of Trading and Liberalisation<br />
To implement wideband systems in the current narrowband use of the <strong>UHF2</strong> band the<br />
<strong>Ofcom</strong> trading rules would need to be met. To understand the likely impact of a wideband<br />
system being introduced into the <strong>UHF2</strong> band, a scenario has been modelled, pictured in<br />
Figure 15 below. This is based on a wideband network (CDMA450) being deployed in the<br />
Thames Gateway, conforming to the <strong>Ofcom</strong> trading rules. All the narrowband transmitters<br />
outside the 50km trading zones that exceed the trading zone level would need to have there<br />
ERP reduced so that the field strength at the trading zone boundary is less than -116dBm<br />
(12dBuV/m). The technical rules and method of modelling are summarised at Appendix G.<br />
Page 53<br />
abc
Figure 15 Narrow band existing base stations meeting trading limits for Thames Gateway<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Source: Mott MacDonald/ATDI<br />
In this particular scenario, 460 stations would need adjustment to their ERP levels. In fact a<br />
further 114 stations would require at least 29dB attenuation to their ERP level, e.g. from 25W<br />
to 30mW. This modelling only looked at co-channel and did not consider guard bands or out<br />
of band emissions, which would have an even greater impact on the number of assignments<br />
affected.<br />
Note: the above trading limit coordination only applies to the base stations. The mobile<br />
stations are assumed to transmit at their normal levels since there is no power control used<br />
by the PMR systems.<br />
6.5 Economic evaluation of Interference<br />
The impact of interference can be related to a cost in terms of additional site engineering<br />
required, but at a high level, the main impact is a loss of coverage area due to the noise floor<br />
at the base station receiver being degraded. To perform an economic evaluation of this<br />
effect, we need to understand the impact of the noise floor on coverage area.<br />
Figure 16 shows the percentage of the service area lost per dB of receiver noise degradation<br />
for both narrowband and wideband systems. This graph coupled with the figures from Table<br />
11 show the impact of band reversal. For example, in the Thames Gateway the average<br />
difference between CEPT aligned and CEPT reversed is a loss in coverage of over 60%<br />
without any mitigation techniques. Alternatively, this can be viewed as an increase in<br />
coverage area of 60% if the spectrum were to be aligned.<br />
Page 54<br />
abc
Figure 16 Base station receiver noise degradation against percentage of coverage lost<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Source: Mott MacDonald/ATDI<br />
This graph coupled with the average noise degradation provides an indicative measure of<br />
the impact to services, which is used in the economic evaluation of interference in Chapters<br />
7 and 8.<br />
6.6 Future interference environment<br />
The future of the interference environment for the <strong>UHF2</strong> band could result in a number of<br />
different scenarios based on the configuration of the <strong>UHF2</strong> band.<br />
As spectrum regulations adopt liberalisation and spectrum trading becomes a common way<br />
of accessing spectrum the future interference environment will be less predictable. Careful<br />
frequency assignment planning will need to be considered under a market driven framework<br />
so as not to cause interference to incumbent users from a new service or technology.<br />
For <strong>UHF2</strong> spectrum where trading has already taken place, users will need to take<br />
responsibility in terms of how they occupy the spectrum for their services and take the<br />
necessary actions to ensure they comply with the current and future regulations. The<br />
regulator has the responsibility to ensure a suitable framework is in place that protects users<br />
from harmful interference from each other and from the continent. Therefore, future interface<br />
requirements and TFAC should include the provision for adopting new technology in the<br />
future without impairing the use of incumbent services. <strong>Ofcom</strong> will need provision for<br />
assigning wideband digital systems and narrowband systems at 6.25kHz in <strong>UHF2</strong> which<br />
would need to be determined and incorporated in future interference modelling tools and<br />
processes.<br />
The future assignment and protection of services from interference will probably be based<br />
around the concept of Spectrum Usage Rights (SUR), which has its origin in the Spectrum<br />
Page 55<br />
abc
Framework Review (SFR). The SFR proposed that market forces are a more effective way to<br />
manage the valuable, yet limited resources of the radio spectrum than the current centrally<br />
managed approach. It is recognised that the value of the spectrum is in part derived from its<br />
quality, hence the focus on Interference management through appropriate Spectrum Usage<br />
Rights.<br />
Users of the spectrum in <strong>UHF2</strong> have varying degrees of protection requirements to use their<br />
service. As explained in Chapter 2 some of the services require a very high level of<br />
availability and the level of interference protection required would need to be sufficient<br />
enough to support those requirements.<br />
In future, it will be necessary for the market to understand their own protection requirements<br />
in order to deploy a quality of service relative to the type of use and expectation to the end<br />
user. In the case for <strong>UHF2</strong>, users of mission critical systems and emergency and public<br />
safety will inevitably need to define its spectrum user rights to include the extra level of<br />
protection required as to reduce the likelihood of interference. However, interference is<br />
directly linked to the value of the use of that spectrum, where it is likely that licensees will<br />
need to pay more for spectrum that has less interference or procure guard bands.<br />
Development of new services and new technology could improve the interference<br />
environment as filter technology improves and spectrum management moves to a market<br />
driven approach where key drivers would be for both availability of high value spectrum and<br />
the reduction in harmful interference.<br />
6.6.1 Considerations when aligning spectrum<br />
When considering aligning spectrum within the <strong>UHF2</strong> band through partial alignment of the<br />
band or on a channel-by-channel basis, which could be through trading and liberalisation, an<br />
important factor is guard bands.<br />
In the UK aligning spectrum piece-meal would mean existing base transmit (CEPT reversed)<br />
would become base receive and be adjacent to other base station transmitters. Current<br />
equipment standards specify that the adjacent channel power should be 60 dB below the<br />
unwanted channel carrier power. However, in practice systems in the UK operating in the<br />
newly CEPT aligned spectrum would need to conform to the current business radio licence<br />
products which could be a 100W base station. Therefore, a geographical separation<br />
distance or guard band would need to be specified according to the type of use. Using<br />
minimum coupling loss calculations, the geographical separation would need to be in the<br />
region of 16km or at least one channel guard band for a 12.5kHz channel.<br />
Therefore what must be considered when aligning spectrum is the efficiency of only aligning<br />
one channel at a time as the ratio of useable spectrum will by 1:2 in a given service area.<br />
The guard bands would of course remain the same if more channels were contiguously<br />
aligned, providing greater efficiency.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 56<br />
abc
6.7 Summary & Conclusions<br />
This chapter has covered the current and future interference scenarios that could potentially<br />
impact services in the <strong>UHF2</strong> band. This chapter also looked at the procedures that are in<br />
place to manage interference both nationally and internationally. We have concluded the<br />
following:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
There is significant interference from the continent into UK base station<br />
receivers when modelling the current realistic scenario (UK CEPT reversed<br />
with 1% time and Base station antenna is 30m agl);<br />
The effect of interference on service area to narrowband systems is around<br />
70% of the noise limited potential service area is lost in the south of England<br />
decreasing to 30% in the Midlands and 0% in the North for 1% of the time;<br />
The UK would benefit from a Memorandum of Understanding for the <strong>UHF2</strong><br />
band over and above the procedures contained in the HCM agreement;<br />
The introduction of wide band systems into the 450 to 470MHz band would<br />
have a dramatic effect on the existing narrow band user not only in the trading<br />
coordination aspect but also in the noise levels rising from 3 to 8dB<br />
depending on the separation distance between the systems. These<br />
degradations will change depending on the separation distances and<br />
geographic terrain between the various co-channel systems;<br />
There is an economic impact to consider if the UK were to suffer significant<br />
continental interference;<br />
Guard bands and geographical separation would be necessary if the UK were<br />
to adopt partial alignment in some areas in the UK;<br />
Users of <strong>UHF2</strong> spectrum in the UK currently do not suffer continental<br />
interference due to the low level of radio communications activity in the <strong>UHF2</strong><br />
band on the continent. It is has been found that if the UK were to become<br />
CEPT aligned any future potential interference could be greatly reduced.<br />
Page 57<br />
abc
7 Economics, Costs, Demands and Benefits of Reconfiguring the <strong>UHF2</strong><br />
band<br />
7.1 Introduction<br />
This chapter covers the following topics:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
a discussion in broad terms of the key economic concepts used when<br />
analysing the economics of spectrum;<br />
a summary of the theory of measuring economic costs and benefits;<br />
an outline of the methodology to be used to estimate the costs and benefits of<br />
band alignment;<br />
an outline of the key costs and benefits identified by previous studies when<br />
reviewing the potential reconfiguration of the <strong>UHF2</strong> frequency band;<br />
a review of previous research into the likely demand for <strong>UHF2</strong> frequency<br />
spectrum if it was reconfigured;<br />
a review of <strong>Ofcom</strong>’s current plans for future spectrum allocations in the <strong>UHF2</strong><br />
frequency band; and<br />
a summary of the key assumptions to be used in the cost benefit <strong>study</strong>.<br />
With all the relevant topics discussed, we then develop a methodology for the Cost Benefit<br />
Analysis (CBA).<br />
7.2 Measuring Costs and Benefits of <strong>UHF2</strong> spectrum reconfiguration<br />
One of the key analytical tools employed when reviewing any future policy changes for the<br />
<strong>UHF2</strong> band is to undertake a cost benefit analysis. In this section, we discuss the concept of<br />
cost-benefit analysis and its relevance to policymaking prior to applying the concept to the<br />
challenge of <strong>UHF2</strong> re-configuration.<br />
7.2.1 The Theory<br />
Cost-Benefit Analysis (CBA) is an economic tool to aid decision-making. It is typically used<br />
by governments to evaluate the desirability of a given market intervention. The aim is to<br />
assess the efficiency of the intervention relative to doing nothing.<br />
The costs and benefits of the impacts of an intervention are evaluated in terms of:<br />
the public's (consumers and producers) willingness to pay for the benefits of<br />
the intervention; or<br />
the willingness to pay to avoid the costs.<br />
Page 58<br />
abc
The costs in a cost-benefit analysis should be measured in terms of opportunity costs,<br />
which are the values in their best alternative use. The guiding principle is to list all of the<br />
parties affected by an intervention, and place a monetary value of the effect the intervention<br />
would have on their welfare as it would be valued by them.<br />
The benefits in a cost-benefit analysis typically attempt to measure the impact of various<br />
options on the value of ‘social welfare’. Economists measure social welfare as the sum of<br />
the total benefits to consumers beyond the price they pay (the consumers surplus), plus the<br />
profit to producers above a normal return (the producers surplus).<br />
In Figure 17 “consumer surplus” is the area below the demand curve, sometimes referred to<br />
as consumers willingness to pay, and above the price (P*), what they have to pay. Producer<br />
surplus is the area above the supply curve and below the market price (P*). The equilibrium<br />
price is where the supply of the service equals the demand for the service. The concept of a<br />
surplus arises for consumers because there are some consumers, as indicated by the<br />
demand curve, who would be prepared to pay a higher price that P* for the service. These<br />
consumers receive a ‘surplus’ as they actually pay a lower price (P*) than they would be<br />
willing to pay for the service. Similarly, there are some producers (as indicated by the supply<br />
curve) that would be prepared to provide the service to consumers at a lower price than they<br />
actually received (that is, P*). Hence, these producers gain a ‘surplus’ above the price that<br />
they were prepared to offer for the service.<br />
The sum of the area of consumer and producer surplus equal the total amount of social<br />
welfare that exists for the supply of a service (Q*) at a given price (P*).<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 17 Consumer and Producer Surplus<br />
i. What factors can result in changes in net social welfare?<br />
Changes in net social welfare occur as a result of changes in the demand and supply of<br />
services offered.<br />
price<br />
consumer<br />
surplus<br />
P* producer<br />
surplus<br />
Page 59<br />
Q*<br />
supply<br />
demand<br />
quantity<br />
abc
In order to illustrate the range of factors that can influence net welfare due to band re-<br />
alignment, we review the impact of band alignment where spectrum is used as an input to<br />
production. In reality, there are a range of goods and services that make use of spectrum in<br />
the production of final products and services. In addition, band alignment may free up<br />
spectrum to allow completely new services to be provided that are not provided now.<br />
However, the simplified scenarios discussed below show in broad terms the impact that<br />
band alignment can have on net social welfare.<br />
An increase in the demand curve in Figure 17 will lead to an unambiguous increase in<br />
producer surplus. A number of factors could drive the rise in demand. Band alignment may<br />
allow for a range of enhancements (such as international roaming) to the existing service to<br />
be offered, which will in turn increase the demand for the service at every level of supply.<br />
This assumes that before band alignment, continental interference issues prevented the<br />
service from being used in other countries in Europe. This increase in the ‘value’ of the<br />
service leads to an outward shift in demand.<br />
A downward shift in the supply curve in Figure 17 will lead to an increase in the size of the<br />
consumer surplus. Band alignment may reduce production costs because of greater<br />
economies of scale of manufacture (due to greater harmonisation with European Standards).<br />
In addition, the supply curve could flatten as a result of band alignment due to more efficient<br />
use of the existing spectrum. For example, a flattening of the supply curve may occur if, as a<br />
result of band alignment, new digital technologies can be introduced that use the same<br />
spectrum in a more efficient way. This may in turn, allow firms to offer a greater amount or<br />
range of services that could be offered before band alignment.<br />
The costs of band alignment may cause the supply curve in Figure 17 to shift upwards<br />
(increase) and the demand curve to shift to the left (decrease). Band alignment will mean<br />
that many existing users of spectrum will bear additional costs (such as retuning equipment<br />
to new frequencies). This will increase the average costs of production across the entire<br />
supply curve, moving the supply curve upwards and lead to increased prices and reduced<br />
consumer surplus.<br />
Band alignment may also cause the demand curve to shift to the left (decrease). This may<br />
be due to consumers during the band alignment transition phase shifting to other providers<br />
offering similar services (such as cellular services). Consumers may decide to shift away<br />
from these services because of the disruption to their services during the transition phase.<br />
Consumers may make this decision based, for example, on the potential for actual downtime<br />
to their service because of the band alignment. The level of producer surplus reduces as a<br />
result of the reduction in demand.<br />
Hence, there are a range of potential impacts that may occur as a result of band alignment.<br />
The role of cost benefit analysis is to weigh up the size of each of these effects on supply<br />
and demand to arrive at an overall estimate of the net impacts.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 60<br />
abc
7.2.2 Practical issues in assessing the costs and benefits of band alignment<br />
In practice, the process of conducting a cost-benefit analysis of various band alignment<br />
options involves estimating the monetary value of initial and ongoing expenses (costs)<br />
caused by the market intervention. These costs are then weighed against the expected<br />
return (benefits) of the market intervention to derive the net-benefits. The total net benefits<br />
are then compared against the ‘do nothing’ scenario (the base case), as well as to the net-<br />
benefits that result from other market interventions.<br />
Constructing robust measures of the costs and benefits of specific actions is often difficult.<br />
This is because the size of many of the costs and benefits can depend crucially on a number<br />
of future unknowns, or involve making judgements on the consumers ‘willingness to pay’ or<br />
the producers ‘willingness to supply’.<br />
Methods to try to estimate total benefits include using survey methods such as asking<br />
consumers how much they would be willing to pay for a certain service or by drawing<br />
inferences from market behaviour, such as revealed preference techniques.<br />
In order to simplify the calculations, many cost-benefit studies assume that the supply curve<br />
is relatively flat. With a relatively flat – or horizontal – supply curve, there are only marginal<br />
changes in the size of producer surplus (or none if the supply curve is horizontal) which<br />
allows the analysis to focus solely on estimating the size of changes in consumer surplus as<br />
it can provide a reasonable measure of the total change in social welfare.<br />
In addition, we note that band alignment may lead to the freeing up of additional spectrum<br />
that will facilitate the provision of new services. In this case, we are then interested in<br />
estimating the entire value of the consumer and producer surplus (rather than change in<br />
surplus measured for existing services). The value producers are willing to pay for spectrum<br />
is a proxy of the magnitude of the social welfare benefits that accrues as a result of band<br />
alignment.<br />
Another practical issue to consider is to ensure that all relevant costs and benefits are<br />
assessed on a comparable basis. To do this, a discount rate is used to compute all relevant<br />
future costs and benefits in present-value terms. This is because the costs and benefits may<br />
accrue both now and into the future. Our analysis will use the UK Treasury discount rate<br />
estimates.<br />
i. How accurate is cost-benefit analysis?<br />
The accuracy of cost-benefit analysis studies are only as good as the quality of the data<br />
used in the analysis. Many of the drivers of benefits and costs are based on estimates of<br />
future unknown events, such as the potential number of consumers willing to purchase the<br />
service once the intervention has been implemented. Hence, there are inherent dangers in<br />
predicting finite net benefits or costs. Usually, sensitivity analysis is deployed to check the<br />
impact of particular factors. As a result, it is normal to present a range of potential outcomes.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 61<br />
abc
Another challenge comes from determining which costs should be included in the analysis.<br />
This is often controversial as organisations or interest groups may have considerable<br />
debates on which costs should be included or excluded from a <strong>study</strong>.<br />
ii. Defining Costs<br />
It is important when conducting and reviewing cost-benefit studies to be aware of the way<br />
that economists define costs. The true cost of something is what you give up to get it. In<br />
terms of spectrum band alignment, costs are not only the resources needed to effect the<br />
alignment but also the benefits that were forgone as a result of the decision to re-align the<br />
band. These ‘opportunity costs’ are relevant for cost-benefit analysis.<br />
In assessing which costs to include in the analysis, the key is to consider only the costs that<br />
will vary as a result of the decision to align the band.<br />
7.3 Methodology for measuring the costs and benefits of Band Alignment<br />
We will use the following approach to estimate the costs and benefits of band alignment:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Firstly, we will review previous studies on the costs and benefits of band<br />
alignment – and summarise the results. Given primary level research is<br />
beyond the scope of this project, we will rely heavily on the research that has<br />
already been carried out on the costs and benefits of band alignment.<br />
Previous research and analysis will be critically assessed, taking into account<br />
any modifications needed given recent policy and market changes.<br />
Secondly, we will outline the major options for band alignment. We will outline<br />
the assumptions made in respect of the future use of the band. In particular,<br />
how the spectrum is used once the band is aligned will have a key impact on<br />
the results (for instance, the value of the spectrum that may be available for<br />
re-allocation as a result of greater spectrum efficiency). Our assumptions on<br />
the future use of the band are critical for the analysis. We will do this based<br />
on providing three broad options for band alignment, which are discussed in<br />
more detail in Chapter 8.<br />
Thirdly, we will identify and discuss each of the high-level costs and benefits<br />
that may accrue for each of the options. These will be based on relevant<br />
previous work as well as our own analysis, assessments and assumptions.<br />
Fourthly, we will review the three options in more detail and identify for each<br />
option the detailed factors to be taken into account and measured in Net<br />
Present Value (NPV) terms, based on a 15-year assessment period. Again,<br />
we will draw on previous analysis of the costs and benefits of band alignment.<br />
These will be assessed in light of the recent policy and market changes. We<br />
will also carry out a sensitivity analysis to review how sensitive the results are<br />
Page 62<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
to changes in the values of key variables. We will also discuss the distribution<br />
of the costs and benefits across users for each of the options as this has been<br />
highlighted in previous studies as an important factor to consider when<br />
assessing the costs and benefits of specific options.<br />
7.3.1 Adjusting the value of costs and benefits to present day<br />
The valuation of costs or benefits are expressed in ‘real terms’ or ‘constant prices’ (i.e. at<br />
‘today’s’ general price level), as opposed to ‘nominal terms’ or ‘current prices’. Given that we<br />
intend to draw on estimates of costs and benefits from studies in the past, there is a need to<br />
adjust the value so that they reflect current values. To do this, we have adjusted values by<br />
the average annual inflation rate for all goods between 2003 and 2007, as produced by the<br />
UK Office of National Statistics.<br />
7.3.2 Discounting for Costs and Benefits that occur in the future<br />
Some of the costs and benefits of band alignment will occur in different time periods. For<br />
example, some of the value to spectrum users of a reduction in continental interference as a<br />
result of band alignment will only be realised when current equipment is replaced. At this<br />
point in the future spectrum users will be able to build a more efficient network (for example,<br />
fewer base stations) given reduced interference risks. Hence, the value to users of this future<br />
benefit needs to be discounted back to present day.<br />
For our analysis, the discount rate of 3.5% is used. This is the rate recommended by the<br />
HM-Treasury for the assessment of the costs and benefits that occur in different time<br />
periods. 27<br />
7.3.3 Sensitivity Analysis<br />
In order to test the results produced, it is sensible to apply tests on the sensitivity of the<br />
results to changes in key variables (such as the cost of alignment, or the value of spectrum).<br />
In terms of the costs of band-alignment, PA Consulting have carried out extensive sensitivity<br />
testing of their estimates – and since we are relying on their estimates for our analysis, there<br />
is no need to replicate this work. As a result, our sensitivity tests will focus on the size of the<br />
benefits – and we will analyse the impact on the overall results when the value of key<br />
variables are changed.<br />
The results of this analysis are detailed in Chapter 8.<br />
7.4 Review of previous research on the costs of band alignment<br />
The first stage of our cost-benefit analysis is to review previous work on the costs of band<br />
alignment.<br />
27 See : http://www.hm-treasury.gov.uk/media/3/F/green_book_260907.pdf<br />
Page 63<br />
abc
There has been considerable research carried out on the costs of reconfiguring the <strong>UHF2</strong><br />
spectrum band. Much of this work took place between 2000 and 2004 and was focused on<br />
providing estimates of the potential costs and benefits of harmonising the <strong>UHF2</strong> spectrum<br />
band with European standards. In this section, we examine two types of costs:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The direct costs of band alignment<br />
Additional potential costs of band alignment.<br />
7.4.1 The costs of band <strong>realignment</strong><br />
Figure 19 on the next page provides a summary of the estimates of direct costs of band<br />
<strong>realignment</strong> of the 450-470 MHz band.<br />
As a result, we focus the rest of our analysis on the most recent and comprehensive <strong>study</strong><br />
on the costs of band alignment, which was completed by PA Consulting in 2004. This <strong>study</strong><br />
estimated that the total costs of alignment were between £260m and £310m.<br />
Costs were disaggregated to provide analysis on the specific costs faced by different users<br />
of spectrum impacted by band alignment. See Figure 18 for a summary of this cost break<br />
breakdown.<br />
Figure 18 Estimates of the cost of alignment by user segment 28<br />
Segment/User Total Costs<br />
(£)<br />
Average<br />
Licensee Cost (£)<br />
Page 64<br />
Average<br />
Terminal Cost (£)<br />
PBR 67 378 434 14 606 189<br />
Paging 8 800 359 38 940 144<br />
PMSE 13 019 319 32 794 368<br />
Telemetry 22 722 600 295 099 1 193<br />
Network<br />
Operators<br />
94 022 695 47 011 348 1 274<br />
Site Engineering 71 157 980 n/a n/a<br />
Contingency 55 420 396* n/a n/a<br />
Total 277 101 387 n/a n/a<br />
*20% Contingency distributed evenly across segments<br />
These cost estimates were based on the assumption that the alignment of each user will<br />
take place with a single frequency change.<br />
28 Typical user cost for 450-470Mhz band Alignment, PA Consulting (2004)<br />
abc
Study Methodology Cost estimates<br />
PA Consulting<br />
(2004)<br />
Radio Agency<br />
(2003) 29<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Review of direct costs of band<br />
<strong>realignment</strong>. Review of databases<br />
combined with stakeholder interviews<br />
Unknown £125m<br />
Figure 19 Selection of cost estimates of 450-470 Band <strong>realignment</strong><br />
Between £260m and £310m if a one-step frequency change is performed.<br />
SD-SCICON (1991) 30 Unknown Engineering costs of <strong>realignment</strong> estimated at £55.7m.<br />
Department of Trade<br />
and Industry (2002) 31<br />
PMR Group<br />
Members of the<br />
Federation of<br />
Communication<br />
Services (2004)<br />
Indepen and AEGIS<br />
(2004)<br />
Based on 2055 responses to a Postal<br />
survey to 6 separate user segments<br />
that make use of spectrum in the 450-<br />
470 MHz band.<br />
If ‘parking’ frequencies are used in a totally different band for all users to allow for continuity of service then costs would<br />
increase to over £500m.<br />
Significant duplication of costs would also occur if ‘parking frequencies’ within <strong>UHF2</strong> were used, estimated to add between<br />
£180-200m to the costs.<br />
Loss of revenues due to down time estimated at £22m.<br />
Average lifetime of equipment was 10.8 years. Average remaining lifetime was 5.1 years. Average cost of existing<br />
equipment was £1700. Percentage of existing units able to be reconfigured was 78% on average.<br />
Average loss of revenue as a result of <strong>realignment</strong> (excluding equipment costs) was £26,000 on average (or a reduction of<br />
32% of revenues over 7 days).<br />
Average increase in staff costs was £2100 (a 29% increase over an average of 13 days).<br />
A quarter of respondents said they would consider moving to another band. One off costs of moving to another band was<br />
estimated at £704,132 (or £8563 excluding Railtrack). Ongoing costs of moving to another band were estimated at £744,366<br />
(or £5374 excluding Railtrack).<br />
Unknown Band <strong>realignment</strong> would reduce interference for an estimated 340 licences – but that 17,285 licences would incur costs in<br />
realigning the band.<br />
Case <strong>study</strong> of Telemetry/Telecommand<br />
services in the 450-470 MHz band. NPV<br />
estimated over a 10 year period<br />
Costs caused by the disruption to UK electrical and gas supplies, the threat to airport operation etc. estimated at ‘hundreds<br />
of millions of pounds’<br />
Net Costs of harmonisation (which include NPV $5m benefits) calculated at £4200m. Costs were calculated as those<br />
involved in using alternative bands and technologies to deliver equivalent services<br />
Indepen and AEGIS Case Study of PMR at 450-470 Earlier harmonisation results in a larger positive NPV. (Difference in NPVs is around £70-100m).<br />
29<br />
This cost estimate was quoted in a 2004 report by the Federation of Communications (The UHF Band 2 Re-Alignment Controversy). Mott MacDonald has been unable to find the original<br />
Radio Agency report that produced these estimates.<br />
30<br />
This cost estimate was quoted in a 2004 report by the Federation of Communications (The UHF Band 2 Re-Alignment Controversy). Mott MacDonald has been unable to find the original SD-<br />
SCICON report that produced these estimates.<br />
31 White and Stilwell, Department of Trade and Industry (2002) 450-470 Band Alignment Project Report.<br />
abc<br />
Page 65
The <strong>study</strong> was based on consultation with industry and this was combined with a flexible<br />
cost model that allowed for the testing of sensitivity of each of the cost drivers. The <strong>study</strong><br />
made use of existing databases on equipment quantities cross referenced with interviews of<br />
key stakeholders.<br />
In reviewing the costs, the report listed the following critical issues generic to all the users of<br />
the 450-470 MHz spectrum band:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Equipment re-tuning or replacement;<br />
Coordinating multi-user sites;<br />
Maintaining continuity of service;<br />
Logistics of the equipment changes;<br />
Reducing business uncertainty.<br />
In addition, the report reviewed specific issues that would be faced by each of the following<br />
450-470 MHz user categories as a result of the band alignment. The report noted that the<br />
costs fell unevenly across the sector (as indicated in Figure 18 above).<br />
We will be using these cost estimates (adjusted to reflect 2008 costs) as the basis for our<br />
cost estimates for each of the options proposed in Chapter 8. In our opinion, there has been<br />
no fundamental change in the make up of these costs since they were estimated (apart from<br />
the need to adjust the values to reflect the impact of inflation). Our approach is consistent<br />
with the views of the stakeholders that were interviewed as part of this <strong>study</strong>.<br />
We note that the PA Consulting cost estimates focused on the direct costs of realigning the<br />
band. The report included a 20 per cent contingency to account for ‘factors such as<br />
uncertainty in database information, wasted engineering effort in cases where vehicles or<br />
terminals are not available for conversion or there are problems with site access, the cost of<br />
delays arising due to technical problems at sites and increased labour costs due to the<br />
market demand for engineers’. 32<br />
The report also indicated that the total costs of band alignment would increase if the use of<br />
parking frequencies was needed as part of the alignment process. The report estimated that<br />
the costs would increase by between £180-200m if parking frequencies within <strong>UHF2</strong> were<br />
used. The report indicated that the costs would increase to over £500m if parking<br />
frequencies outside of the <strong>UHF2</strong> band were used.<br />
Notwithstanding the potential for additional costs highlighted in the report, some other costs<br />
were not included in the <strong>study</strong>. These costs may or may not be relevant, depending on the<br />
management of the band alignment process. They include the cost impact of down-time and<br />
32 PA Consulting (2004), p. 1.4.<br />
Page 66<br />
abc
potential complications/interference as a result of the alignment which may impact on the<br />
operations of essential services such as airports, electrical and gas supplies. 33<br />
7.4.2 Summary<br />
A range of costs needs to be considered when completing a cost-benefit analysis of band<br />
alignment. We intend to draw heavily from the 2004 PA Consulting report on the direct costs<br />
of band alignment. It provides relatively recent estimates of a range of relevant costs that<br />
would be incurred during the band alignment process. These estimates need to be adjusted<br />
to reflect 2008 values. The logical complexity of aligning the band cannot be discounted. In<br />
particular, if the alignment of the band cannot be completed through a one step process, the<br />
actually costs of band alignment almost double.<br />
The types of costs identified in these studies included:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The costs of modifying or replacing base stations and mobile equipment;<br />
The cost of site engineering – re-tuning or replacement of filters and<br />
combiners that are specific to the current frequency arrangements;<br />
The cost of providing temporary parallel infrastructure to enable continuity of<br />
service or long-term migration of a large pool of end-user equipment;<br />
The user project management needed to plan and co-ordinate the<br />
changeover;<br />
Potential re-training where new equipment is deployed;<br />
Any costs associated with hiring equipment or services to maintain service<br />
during equipment downtime;<br />
The cost of providing additional staff to cover temporary outages of critical<br />
systems and to perform the re-configuration of central network control<br />
systems;<br />
Cost of replacing stock or spares that become obsolete as a result of the<br />
band alignment process and must be replaced to ensure continuity of<br />
maintenance provision;<br />
(For public network operators) Any loss of revenue from customers who move<br />
to an alternative either during the changeover, or permanently;<br />
The administrative costs associated with making the allocations and any on-<br />
going administrative costs associated with managing the band;<br />
The costs of reversing the allocation decision should it turn out to be wrong;<br />
33 See, for example, a discussion of the costs of this in relation of Heathrow Airport in the PMR Group members of the<br />
Federation of Communication Services (2004) The UHF Band 2 Re-alignment controversy, p. 8.<br />
Page 67<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The costs of dealing with any increase in congestion in licensed and licence-<br />
exempt bands caused by the denial of licensed and licence-exempt use<br />
respectively. For example, installing additional infrastructure or using more<br />
interference resistant handsets;<br />
The potential for band re-alignment to constrain the potential for spectrum<br />
trading;<br />
That loss of potential revenue from Administrated Incentive Pricing (AIP) as a<br />
result of band re-alignment.<br />
7.5 Review of previous research on the benefits of band alignment<br />
A review of previous research on the benefits of band alignment suggests benefits accrue in<br />
the following broad areas:<br />
Benefits due to the harmonisation of the spectrum band with European<br />
standards. This includes reductions/removal of radio interference between UK<br />
users on the East coast of the country and other users of the spectrum in<br />
other parts of Europe (namely, France);<br />
Benefits due to standardisation of equipment between the UK and Europe.<br />
These benefits include the ability of UK users to take advantage of Economics<br />
of Scale of production, as well as the potential to offering additional services<br />
(such as European roaming);<br />
Benefits of more efficient spectrum use, which potentially frees up<br />
additional spectrum that can be allocated to the market. These benefits<br />
accrue in a number of ways including the extra funds available to the UK<br />
Treasury because of the allocation of spectrum, as well as the lower costs of<br />
supply that may result for greater spectrum being available. New services<br />
may also be possible as a result of the extra spectrum that is available that<br />
was not possible under existing arrangements.<br />
The magnitude of these potential benefits depends on a range of factors, including:<br />
The characteristics (service, quality, and price) of the new applications and<br />
the extent of competition from substitute products and services, which in turn<br />
will affect the benefits users enjoy and take-up rates;<br />
The differential impact of the licensing arrangements on service/application<br />
innovation and the timing of investment to deliver the service/application;<br />
The timescales over which benefits are to be enjoyed and the discount rate<br />
applied to future benefits;<br />
Page 68<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The size of the potential market addressed by the spectrum allocation<br />
decision;<br />
In the case of an occupied licensed band, whether incumbent licensed users<br />
are displaced or not by the designation of the band for licence-exempt use;<br />
The wider impact of the new applications on competition and, assuming this is<br />
positive, the consumer benefits from enhanced productivity and lower prices,<br />
improved service quality in other services;<br />
Externalities generated by the services or the spectrum use. This includes<br />
interference effects and any positive or negative environmental, economic or<br />
social externalities. Possible examples of the latter include any<br />
inclusion/democracy benefits from wider broadband deployment and changes<br />
in road congestion, accidents and pollution caused by automotive radar;<br />
The ability to achieve these benefits through alternative means. For there may<br />
be a number of alternative methods to band alignment of reducing radio<br />
interference (such as spectrum trading between existing users or the use of<br />
intelligent antenna techniques in areas of the country where interference<br />
occurs.<br />
We note that it is likely to be challenging to estimate the likely benefits of band alignment, as<br />
many of the key variables are unknown. This is in contrast to the costs of band alignment, for<br />
which costs are more readily obtained or estimated.<br />
Page 69<br />
abc
Despite these challenges, a number of studies have attempted to estimate the benefits of<br />
band alignment. These estimates are presented below in Figure 20.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 20 Estimates of the benefits of alignment of the <strong>UHF2</strong> band<br />
Study Methodology Estimates of financial benefits<br />
Radio Agency<br />
(2003) 34<br />
Radio Agency<br />
(2003) 35<br />
Department of Trade<br />
and Industry (2002) 36<br />
Indepen and AEGIS<br />
(2004)<br />
7.5.1 Benefits of Standardisation<br />
Unknown Up to £555m<br />
Unknown Band alignment expected to yield an<br />
additional 2-3MHz of spectrum – with a Net<br />
Present Value of £247-£430m<br />
Based on 2055 responses to a<br />
Postal survey to 6 separate user<br />
segments that make use of the<br />
<strong>UHF2</strong> band.<br />
Detailed case studies of PMR and<br />
Telemetry/ Telecommand<br />
services in the 450-470 MHz band.<br />
Case studies drew upon previous<br />
studies on estimates of the<br />
consumer surplus of PMR<br />
spectrum and the 2003<br />
Radiocommunications Agency<br />
Study of Costs and Benefits of<br />
Band re-alignment. NPV approach<br />
was applied.<br />
Case <strong>study</strong> on NPV net-benefits<br />
of band alignment for PMR users<br />
based on a scenario that band<br />
alignment took place in 1980.<br />
Page 70<br />
Estimates of the existing cost of interference<br />
were around £150 per day for the users that<br />
experienced interference. Only 10 users out of<br />
2055 provided an estimate of the costs of<br />
interference. Alignment of the spectrum band<br />
would assumedly mean that these costs would<br />
not be incurred.<br />
7% of Users stated that there would be a<br />
benefit to band <strong>realignment</strong>. These users<br />
estimated that their business revenues would<br />
increase by 9% (or £5200). Averaged across all<br />
users the revenue increase was 4% (or £2400).<br />
PMR users: NPV net benefits of re-alignment<br />
range from £4m-£16m to £78m-£124m,<br />
(depending on assumptions made about the<br />
amount of spectrum released because of <strong>realignment</strong><br />
and the potential value of that<br />
spectrum).<br />
Telemetry and Telecommand devices: impact<br />
of band re-alignment would free up 1MHz of<br />
spectrum available for PMR and other mobile<br />
radio use in the 450-470 MHz band. NPV of<br />
benefits equal to £5m (although costs of<br />
<strong>realignment</strong> significantly overshadowed the<br />
benefits)<br />
Indepen and AEGIS state the following types of benefits that result from standardisation: 37<br />
Compatibility/interface standards: These standards promote network effects<br />
(or network externalities) that derive from being part of a large network of<br />
34<br />
This estimate of the financial benefits of alignment was quoted in a 2004 report by the Federation of Communications (The<br />
UHF Band 2 Re-Alignment Controversy). Mott MacDonald has been unable to find the original Radio Agency report that<br />
produced these estimates<br />
35<br />
Presentation to the Royal Society by Paul Jarvis, Head of Private Business Systems (2003) Can be found here<br />
www.ofcom.org.uk/static/archive/ra/smag/bandalignforum/pauljarvis.ppt<br />
36<br />
White and Stilwell, Department of Trade and Industry (2002) 450-470 Band Alignment Project Report.<br />
37 Indepen and AEGIS, p. 20.<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
users (e.g. international mobility, ability to communicate with many others, low<br />
cost ancillary and support services). These standards reduce the costs to<br />
consumers and producers of switching between different interfaces and<br />
thereby promote competition;<br />
Minimum quality/safety standards: These standards are valuable in<br />
circumstances where consumers cannot easily discriminate between low and<br />
high quality goods (as may often be the case with equipment which uses<br />
radio access). The standards reduce consumers’ search and transaction<br />
costs and ensure low quality producers do not drive out high quality<br />
producers. Technical barriers to trade may be reduced by providing reference<br />
points for quality;<br />
Variety reduction/focussing standards: Standards that reduce the variety of<br />
technologies developed allow economies of scale in equipment manufacture<br />
and service provision to be exploited and so lead to lower costs to<br />
consumers. Producers’ risks of sponsoring an unsuccessful variant are also<br />
reduced as the likelihood the market will achieve critical mass is increased<br />
(compared with the situation where there is no standard), even if there may<br />
be increased competition between producers of the standardised product or<br />
service;<br />
Information/measurement standards: Standards of information and product<br />
description give consumers assurance of compatibility between<br />
complementary products reduce producer and consumer transaction costs<br />
and thereby promote trade and accelerate the take-up or diffusion of new<br />
technologies;<br />
Promotion of First Mover Advantages. The adoption of standards can also<br />
provide an incentive to innovate by helping secure a first mover advantage in<br />
the marketplace. However, the flipside of this is that there may be costs due<br />
to the ability of the ‘first mover’ to lock-in consumers to certain technologies,<br />
and through that reduce potential competition from competitors.<br />
However, the authors point out that many of the benefits (and costs) of standardisation are<br />
not dependent on the adoption of European standards. However, the adoption of European<br />
wide standards can have the additional benefits of reducing radio interference, promoting<br />
international mobility and creating a larger market.<br />
7.5.2 Benefits of Harmonisation of the spectrum band with European standards<br />
The main benefits of Harmonisation as identified by Indepen and AEGIS (2004) include:<br />
A reduction in the likelihood of harmful interference between services<br />
operating in different countries, particularly in border areas, and thereby<br />
Page 71<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
increase the available spectrum for each country. The scale of this benefit<br />
will depend in part on whether spectrum in the bands in question is scarce or<br />
not;<br />
the creation of a European-wide market for equipment and services thereby<br />
reducing manufacturers’ risks and allowing them to take advantage of scale<br />
economies; 38<br />
a reduction in equipment costs through Economies of Scale in equipment<br />
manufacture by limiting the number of frequency bands for which equipment<br />
must be made;<br />
the creation of new services (such as international roaming)<br />
Benefits of regulatory certainty (protection) to users of spectrum that the<br />
spectrum will not be reallocated to other potential uses.<br />
However, the size of the benefits of harmonisation depended crucially on current and future<br />
use. Where spectrum was expected to remain un-congested, the <strong>study</strong> report argued there<br />
was little or no benefit of band alignment. In addition, the <strong>study</strong> highlighted that technological<br />
change was allowing many of the benefits of harmonisation to occur without the need for<br />
band alignment. We note that this has now happened in the field of narrowband technology,<br />
where DMR and TETRA offer flexibility in the spectrum configuration, enabling the UK to<br />
benefit from digital services, whilst not harmonising the spectrum. However, the case for<br />
introducing wideband technology at this moment still requires harmonised spectrum. Even if<br />
the technology was to be more flexible and be able to adopt different duplex splits, the<br />
technology would still need approximately 2 x 5MHz of spectrum, which would not be<br />
achievable in the 450MHz band current allocation.<br />
The report offers a number of conclusions on the benefits of standardisation and<br />
harmonisation, both historically and if implemented now. See Table 13 for details. The report<br />
argues that net benefits only occur for some spectrum user segments in the 450-470 MHz<br />
band. The conclusions suggest that a partial band alignment is preferred to the full band<br />
alignment.<br />
38 In this regard, there are thought to be significant benefits from trading with “nearby” countries, where distance is measured in<br />
cultural, administrative, geographic and economic terms. See Distance Still Matters, P Ghemawat, Harvard Business Review,<br />
79(8), September 2001.<br />
Page 72<br />
abc
Table 13 Conclusions on the impact of standardisation and harmonisation caused by band<br />
alignment<br />
Segment (case studies) Key conclusions<br />
PMR at 450-470 MHz –<br />
historic<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Harmonisation would have yielded greater benefits if undertaken<br />
earlier.<br />
PMR at 450-470 MHz – future Benefits from allowing users to chose whether to use wideband<br />
or narrowband<br />
Radio car keys Appears to be a good case for harmonisation<br />
Telemetry and telecommand<br />
systems<br />
Harmonisation would have a substantial negative impact.<br />
PMSE – historic Harmonisation could have a negative impact because it would<br />
reduce the available spectrum, not lead to lower equipment costs<br />
and the benefits of mobility are small. Against this users might<br />
gain more security of tenure, though this seems unlikely in<br />
practice.<br />
PMSE – future Standardisation per se does not offer benefits.<br />
7.5.3 Benefits of greater spectrum efficiency<br />
One major benefit of band alignment is the potential for greater spectrum efficiency, which<br />
allows the same amount of services to be provided with less spectrum. The ‘freed up’<br />
spectrum can then be allocated to new uses that were not available before the band<br />
alignment process. Studies have estimated that there is the potential to free up between 2-3<br />
MHz of spectrum in the 450-470 frequency band. The value of this spectrum (which can be<br />
used to proxy the size of the benefits to consumers and producers) depends crucially on how<br />
it will be used in the future. Previous estimates range to over £400m. However, to gain an<br />
accurate estimate of the current value of spectrum that may be freed up through band<br />
alignment it is important to estimate the current value of the spectrum available. This<br />
requires an assessment of the future demand for the spectrum. Information about the value<br />
of spectrum can also be obtained from a review of the recent spectrum auctions for similar<br />
spectrum frequencies.<br />
Since 2004, <strong>Ofcom</strong> has introduced spectrum trading and liberalisation, which has had a<br />
significant impact on the spectrum management of <strong>UHF2</strong>. These reforms increased the<br />
influence of market mechanisms in spectrum allocation and have removed many of the<br />
licence restrictions that prevented a change of use. See Chapter 3, for more details on the<br />
spectrum management reforms, particularly the new reforms to Business Radio in 2008.<br />
The influence of these liberalisation measures means that the previous argued benefits of<br />
band alignment must be reassessed. In particular, one of the reasons argued in favour of<br />
band <strong>realignment</strong> was to allow for greater harmonisation of spectrum use, and through that<br />
greater take up of services (for instance, it is often argued that harmonisation with European<br />
standards would allow for greater economies of scale for equipment manufacture). However,<br />
Page 73<br />
abc
the proposed benefits of band alignment will be reduced if liberalisation of spectrum policy<br />
allows these services to be delivered through alternative means.<br />
In addition to a liberalised spectrum trading market offering a means to gain access to the<br />
required spectrum, spectrum is available piece-meal from <strong>Ofcom</strong> 39 and it s being awarded<br />
en-block by <strong>Ofcom</strong> in a variety of bands over the coming years. <strong>Ofcom</strong> has laid out its plans<br />
for future spectrum awards, which we have summarised below in Table 14. The table<br />
illustrates the likely alternate spectrum bands for services currently in the <strong>UHF2</strong> band.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 14: <strong>Ofcom</strong> Spectrum Awards related to <strong>UHF2</strong><br />
Band Status Opinion<br />
412-414 MHz/422-<br />
424 MHz<br />
Awarded to Arqiva, who are<br />
acting as a spectrum<br />
manager with no services<br />
currently operating in the<br />
band.<br />
470-854 MHz Addressed as part of the<br />
Digital Dividend Review.<br />
Due for award around 2009.<br />
Page 74<br />
This band is CEPT aligned and can<br />
accommodate a variety of Digital<br />
PMR technologies. However the<br />
constraints within the band are<br />
such that a national network would<br />
be difficult to deploy. It is expected<br />
that discrete local networks will be<br />
deployed and managed by Arqiva<br />
for operators to PMR type users.<br />
It is likely that mobile services will<br />
be accommodated within this band,<br />
which may cater for the wideband<br />
requirements of the emergency<br />
services, such as the 700MHz<br />
E&PSS allocation in the US.<br />
Spectrum will also become available from the UK Civil Sector, as proposed in the October<br />
2007 consultation 40 on proposals to extend market mechanisms to public sector spectrum<br />
holdings in line with the implementation plan. The Government has already committed in the<br />
Forward Look 41 to releasing a ‘significant proportion’ of the MOD’s spectrum holding<br />
between 2008 and 2010. The MOD expects to publish its Military Spectrum Implementation<br />
Plan, which will identify opportunities to share or release spectrum and how its spectrum<br />
holdings will be shared or released to the market, in spring 2008.<br />
39 Referred to as command and control by <strong>Ofcom</strong>, which is based on a first come-first served approach to the award of<br />
spectrum, where spectrum demand exceeds supply in some areas, whilst in other areas spectrum is available.<br />
40 Spectrum Framework Review: the public sector: http://www.ofcom.org.uk/consult/condocs/sfrps<br />
41 Forward Look: A strategy for management of major of public sector spectrum holdings:<br />
http://www.spectrumaudit.org.uk/pdf/Forward_Look_2007.pdf<br />
abc
It is understood that the Public Safety Spectrum Policy Group (PSSPG) is currently<br />
considering options for the future management of E&PSS spectrum holdings involving the<br />
use of market mechanisms to secure the best possible use of the spectrum and to maximise<br />
opportunities for band sharing while safeguarding the continuing operational effectiveness of<br />
E&PSS. It is expected that this will result in a single entity managing the spectrum on behalf<br />
of PSSPG from the end of 2008.<br />
It is therefore understood that spectrum will become widely available for those that need<br />
spectrum from sources other than <strong>Ofcom</strong> for the current type of users of <strong>UHF2</strong>, through<br />
secondary trading of currently vacant spectrum in 2008. In addition, these new awards and<br />
spectrum managers could facilitate the spectrum provision for future wideband services.<br />
Specifically, <strong>UHF2</strong> spectrum will become available through the E&PSS spectrum manager,<br />
with a predicted 6MHz (not aligned or necessarily contiguous) of spectrum being made<br />
available from 2009. Additional spectrum will also be available though normal command and<br />
control licensing from <strong>Ofcom</strong> as spectrum is available in most areas except London and the<br />
surround areas.<br />
Alternatively <strong>UHF2</strong> type users can also source spectrum from UHF1, through command and<br />
control licensing via <strong>Ofcom</strong>, secondary trading or through the spectrum manager of the 412-<br />
414 and 422-424MHz spectrum, which as of January 2008 remains vacant.<br />
The efficiencies of digital technology and the introduction of new vacated spectrum to the<br />
market, will meet the needs of the <strong>UHF2</strong> type of users for the near future without any need<br />
for regulatory intervention above and beyond what is currently happening, with spectrum<br />
available either within the <strong>UHF2</strong> band or in alternate bands. Any demand for wideband<br />
services within the <strong>UHF2</strong> band, would probably need to be met with regulatory intervention<br />
for provision for in the near term, as at least 2 x 5MHz of contiguous spectrum would be<br />
required in the current fragmented band.<br />
7.5.4 Benefits of reduction in continental interference<br />
Interference within the <strong>UHF2</strong> band was discussed in detail in Chapter 6. Interference<br />
ultimately results in the loss of coverage area, which is shown at Figure 16 on page 55. The<br />
benefits of reducing interference are therefore an increase in coverage area. Alternatively,<br />
this can be viewed as less infrastructure required to cover the same area, therefore a<br />
reduction in costs. In addition, the services in <strong>UHF2</strong> rely on communications, with services<br />
such as logistics companies using cellular services when outside of the ‘business radio<br />
coverage area’. Therefore as a proxy, a company’s reliance on cellular services to<br />
supplement coverage and therefore ‘call costs’ would reduce if interference was reduced.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 75<br />
abc
7.5.5 Summary of the benefits<br />
Previous estimates of benefits of band alignment need to be re-assessed given the<br />
significant changes that have occurred in both the policy and market environment since<br />
many of the studies were completed.<br />
The introduction of spectrum trading means that many of the benefits of band alignment can<br />
now be achieved without direct intervention by the regulator. In addition, technological<br />
advances have meant that the costs of managing continental interference for existing<br />
spectrum users in the 450-470 MHz frequency band have been significantly reduced. This, in<br />
turn, has reduced the size of benefits that would accrue by aligning the band. For more<br />
details on these changes, see Chapters 3 and 4.<br />
As a result of theses developments we have significantly discounted previous research on<br />
the benefits of band alignment. Instead, we have carried out our own analysis on the likely<br />
use of the spectrum that is freed up as a result of band alignment. We have also examined<br />
the value of that spectrum based on our expectations of the likely revenues that will accrue<br />
to Government through allocating the spectrum to the market and the associated AIP pricing<br />
that would result. In terms of the benefits from reduced interference, our modelling has<br />
provided an estimate of the actual net impact of band alignment, taking into account the<br />
impact of current technologies that can manage continental inference without the need for<br />
band alignment. Chapter 8 discusses this in more detail and provides our estimate of the<br />
size of these benefits.<br />
7.6 Distribution of costs and benefits<br />
Cost-benefit analysis is typically not concerned about how the cost or benefits are distributed<br />
among consumers or producers. However, as highlighted by a number of previous studies<br />
into the costs and benefits of band alignment, the issue of how the benefits and costs are<br />
distributed is of critical importance for public policy.<br />
Earlier studies indicated that the benefits of band alignment tended to be concentrated on<br />
those spectrum users on the South East coast of the UK (where continental interference<br />
risks exist), while costs are shared across all users in the band. Hence, many spectrum<br />
users receive no benefit from band alignment – but may face considerable costs. This is<br />
demonstrated in the continental interference differences between the Thames Gateway and<br />
Bradford in Chapter 6.<br />
In defining the options to be studied as part of the cost-benefit <strong>study</strong>, we have tried to be<br />
cognisant of the impact of each of the options on spectrum users. As well as reviewing the<br />
size of net-benefits for each of the options, we also review the net-impact on spectrum users.<br />
Minimising the impact of band alignment on spectrum users will be one of the factors to be<br />
considered when making our recommendations on the preferred route for achieving the<br />
policy aims of band alignment.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 76<br />
abc
7.7 Summary & Conclusions<br />
In this chapter, we have discussed in broad terms the key economic methods for assessing<br />
the costs and benefits of spectrum band alignment. We have also reviewed the work carried<br />
out in identifying and assessing the main types of costs and benefits of band re-alignment<br />
and provided a summary of the main results. We have concluded that:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Estimating the change in net social welfare lies at the heart of cost benefit<br />
analysis. This involves estimating the aggregate change in producer and<br />
consumer surplus as a result of the band alignment process;<br />
An assessment of the costs and benefits require careful review to identify<br />
which factors are solely due to the band alignment process;<br />
An assessment on a Net Present Value basis of the relevant costs and<br />
benefits is complicated and has produced a range of results. It requires a<br />
range of subjective assumptions as many of the costs and benefits are based<br />
on estimates of future uncertain outcomes.<br />
The main costs as a result of band alignment found in previous work included:<br />
Costs to existing operators being moved to a new ‘harmonised’<br />
spectrum band;<br />
The loss of revenues if current consumers of services move to<br />
alternative providers (such as GSM operators) as a consequence of<br />
the band alignment;<br />
Administrative costs;<br />
The potential for band alignment to restrict spectrum trading and<br />
reduce the value of the spectrum.<br />
The key benefits that were found in previous cost-benefit studies focused on<br />
three main areas:<br />
Benefits due to more efficient spectrum use (including the freeing up<br />
of additional spectrum for further allocation);<br />
Benefits due to the harmonisation of the spectrum band;<br />
Benefits due to standardisation of equipment.<br />
Since most of the studies reviewed were produced between 2000 and 2004,<br />
an assessment of today’s costs and benefits will require taking into account<br />
the following key changes in the industry:<br />
changes in the industry demand for spectrum in the 450-470 MHz<br />
band;<br />
Page 77<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
technological change (such as developments that enable radio<br />
interference issues to be addressed without the need for band<br />
alignment);<br />
Regulatory reforms (such as the recent moves to liberalise of spectrum<br />
allocation and use). This includes recent announcements by <strong>Ofcom</strong> to<br />
for future spectrum awards which can be considered the likely future<br />
alternative spectrum bands for 450-470 MHz users.<br />
The largest single contributor to the benefits was the value that was created<br />
through the freeing up of spectrum;<br />
Studies have shown that the costs of band alignment are unevenly distributed<br />
amongst existing spectrum users.<br />
Based on our review of previous work – as well as our assessment of the impact of changes<br />
in the policy and market environment since these studies were completed, we outline in<br />
Table 15 our proposed approach to estimating the value of each of the cost and benefit<br />
categories for band alignment.<br />
Page 78<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 15 Cost and Benefit Categories<br />
Cost/Benefit Category Method used to estimate value<br />
Direct costs of aligning the band Use PA Consulting 2004 report estimates, adjusted for<br />
inflation.<br />
Increased risk of service down-time<br />
during alignment<br />
Reduced customer demand during<br />
alignment as customers move to<br />
alternative suppliers<br />
Reduction in Continental Interference<br />
Management costs<br />
Increase in network efficiency as a<br />
result of less interference (i.e. Less base<br />
stations needed)<br />
Greater spectrum efficiency allowing:<br />
• Higher Govt revenues through<br />
further allocations of spare<br />
spectrum<br />
• New/improved services<br />
Standardisation and Harmonisation<br />
benefits<br />
• Lower equipment costs<br />
• New services available (such<br />
as European-wide roaming)<br />
• Adjust PA estimates by UK RPI for 2004-2007<br />
Use PA Consulting 2004 report methodology (adjusted for<br />
inflation)<br />
Use PA Consulting 2004 report methodology (adjusted for<br />
inflation)<br />
The reduction in interference will result in less expenditure in<br />
interference mitigation costs, which will be included in the<br />
network efficiency costs (below).<br />
ADTI/Mott MacDonald modelling of continental inference see<br />
Chapter 6. Account for infrastructure reduction and less<br />
reliance on alternative operator provided services. The<br />
assignments only affected by interference will be considered.<br />
Benefits over 15 years discounted to Net Present Value (based<br />
on a discount rate of 3.5%)<br />
Review of recent spectrum auctions in other markets (where<br />
appropriate) combined with using the equivalent value of<br />
spectrum based on Administrative Incentive Pricing rates..<br />
Estimate revenue per MHz for two service scenarios:<br />
• Narrowband services<br />
• Wideband services<br />
Assume that the value of additional spectrum freed up<br />
through band alignment is a proxy for the total producer and<br />
consumer benefits as a result of spectrum efficiency. No<br />
additional values are estimated for the impact of<br />
new/improved services.<br />
The value of efficiency benefits due to band alignment should<br />
be discounted to take account of the degree of spectrum<br />
efficiency that may occur in any case as a result of spectrum<br />
trading<br />
We assume the key benefits of standardisation and<br />
harmonisation are a 5% reduction in the average cost of a<br />
handset in the case of full band alignment. This is due to<br />
economies of scale of production as a result of full band<br />
alignment. This on the basis that (1) stakeholder interviews<br />
suggested little, if any, demand for services that leveraged<br />
spectrum harmonised with the rest of Europe and (2)<br />
technological progress means non-harmonised/standardised<br />
equipment no longer a major barrier to mass production etc.<br />
Page 79<br />
abc
8 Options development and CBA<br />
8.1 Introduction<br />
This chapter provides details on the options chosen for band alignment and the costs and<br />
benefits used in assessing each option as part of the Cost Benefit Analysis (CBA). It also<br />
outlines the sensitivity analysis carried out as part of the CBA and the results of the CBA for<br />
each of the options. Finally, we have provided conclusions on the CBA.<br />
8.2 The options for band alignment<br />
In order to complete a robust CBA, it is crucial to identify the range of options that could<br />
potentially be introduced to achieve band alignment. As discussed earlier in this report (in<br />
particular in Chapter 7), there are a range of options available. There is also the option of no<br />
regulatory intervention. In order to review costs and benefits in a manageable way, we have<br />
identified three broad options for band alignment. Our view is that these options broadly<br />
summarise the practical scenarios available. The options that we will review in terms of the<br />
cost benefit analysis are:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Option 1: Full band alignment through direct <strong>Ofcom</strong> intervention;<br />
Option 2: Partial band alignment, with spectrum yield used for narrowband<br />
services;<br />
Option 3: Partial band alignment, with a spectrum yield used for wideband<br />
services.<br />
These options are discussed in more detail below, with the assumptions used for each<br />
option summarised in Appendix H. Details on why these options were chosen and their<br />
impact on the overall results are discussed in the following sections.<br />
8.3 The major cost and benefit categories<br />
In Chapter 7, we reviewed previous related studies in order to calculate the costs and<br />
benefits of various band alignment scenarios. Since these studies were completed, there<br />
have been some considerable changes in the policy, the market environment and<br />
technology. These changes combined have had significant regulatory impacts on the<br />
spectrum value of the costs and benefits of the spectrum (when compared to costs estimates<br />
from earlier studies). In addition, we consider that some of the benefits of band alignment<br />
that were included in earlier studies can now largely be discounted as a direct result of policy<br />
and technological changes that have occurred since 2004.<br />
Our conclusions on the relevant costs and benefits of Band Alignment that can be included<br />
and an assessment of their relevance to the band are discussed below.<br />
Page 80<br />
abc
8.3.1 The Direct costs of Band Alignment<br />
As discussed earlier, we have used the total full costs calculated by PA Consulting for each<br />
of the options. The PA report indicated that one of the major costs of alignment was<br />
engineering costs. These full costs were calculated as PA Consulting considered that it was<br />
too complex to allocate these costs to individual licence categories, given the large degree of<br />
shared costs to the user. For the purposes of our analysis, we have chosen to distribute<br />
these costs evenly across the user licence categories.<br />
We have adjusted the total full costs for Band Alignment for inflation (based on the Statistics<br />
UK Real Price Index price for all individual categories) so that they reflect 2007 values. 42<br />
8.3.2 Measuring the benefits of reduced interference<br />
During stakeholder interviews, a number of stakeholders indicated that the costs of<br />
managing interference have greatly reduced for a number of reasons. One main reason<br />
being that the capital costs for site engineering to mitigate interference was invested a<br />
number of years ago and they continue to benefit from this. In addition, interference has<br />
significantly reduced from the continent in recent times, thereby reducing any related costs.<br />
We have attempted to measure the benefits of band alignment using the following two<br />
methods:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
A reduction in continental interference as a result of band alignment means<br />
that current users can provide equivalent services with a reduced network<br />
size. Current networks have been deployed with additional site engineering<br />
+costs in order to manage existing continental interference. With this<br />
interference removed, users can, over a period of time as they replace<br />
equipment, optimise their network size and save in capital and operating<br />
costs.<br />
A reduction in continental interference will increase the reach of the existing<br />
network. This will reduce the costs of using alternative commercial services<br />
(such as cellular) when users are out of network coverage.<br />
i. Number of base stations impacted by interference<br />
In order to estimate the benefits of reduced continental inference it has been necessary to<br />
make assumptions on the number of base stations that are actually impacted by<br />
interference. We have assumed that 60% of the total number of base stations in the country<br />
are within the geographic region where continental interference is present, see Figure 14. Of<br />
these base stations, we assume that only 33% are actually impacted by interference, which<br />
takes account of the on-site systems for in-building coverage, which are not necessarily<br />
impacted by continental interference.<br />
42 More information on the Inflation adjustment data used can be found here<br />
http://www.statistics.gov.uk/StatBase/tsdataset.asp?vlnk=7172&More=N&All=Y<br />
Page 81<br />
abc
ii. Impact on network size of reduced interference<br />
Using our modelling results, we calculated that a typical spectrum user would be able to<br />
provide an equivalent service with 45 per cent less network coverage if there was no<br />
continental interference. This is based on an average interference level of 7dB, inferred from<br />
the modelling in Chapter 6.<br />
Spectrum users will be unable to benefit from the reduced capital and operating costs of a<br />
smaller network size immediately. Over time, as base stations are replaced, spectrum users<br />
will be able to slowly reduce network size to take advantage of reduced interference. We<br />
assume that the average life of a base station is 5 years, so 20 per cent of the network is<br />
replaced each year.<br />
iii. Impact on GSM costs of reduced interference<br />
We assume reduced interference increases existing network coverage and leads to a<br />
reduction in call costs for cellular mobiles. We assume that call costs are reduced by £5 per<br />
month per mobile. Other key assumptions include:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Average cellular costs (before band alignment) are £20 per month per mobile;<br />
An average of 30 Mobile phones used per base station.<br />
8.3.3 Reduced handset costs as a result of band alignment<br />
We assume that the costs of full band alignment enable economies of scale in the<br />
manufacture of handsets and leads to a 5 per cent reduction in the average cost of a<br />
handset.<br />
We have assumed that the benefits of band alignment mean that the average costs of<br />
handsets (whether they be DMR, TETRA or CDMA450) are reduced because of economies<br />
of scale in manufacture. We have made assumptions on the number of handsets per base<br />
station and the average costs of handsets to calculate the size of benefits for each of the<br />
options. These are included in the CBA calculations for each of the options.<br />
8.3.4 Spectrum efficiency<br />
Increased spectrum efficiency is a key benefit of band alignment. Band Alignment allows for<br />
these efficiencies to be recovered. The outcome of this is that existing users will be able to<br />
provide equivalent services using less spectrum. The spectrum that is freed up as a result of<br />
band alignment is then available for re-allocation back to the market, which provides<br />
opportunities for existing as well as new operators to purchase spectrum and use it to offer<br />
services. There are a number of benefits to purchasing spectrum as a result of greater<br />
spectrum efficiency, these include revenues to the Government obtained through re-<br />
allocation of spectrum to the market, increased competition (and lower priced and/or higher<br />
quality services) or the means to provide new services that cannot be provided under the<br />
existing spectrum configuration. For example, the 450MHz band is used in some other<br />
Page 82<br />
abc
European markets to provide mobile services. The propagation properties of the 450MHz<br />
band have made it particularly cost effective to roll out a network in rural areas, where there<br />
are low population densities.<br />
As outlined in Chapter 7, previous studies on the benefits of band alignment calculated that<br />
the release of spectrum as part of the alignment process would deliver significant benefits.<br />
We consider that since those studies were completed, the value of spectrum has declined<br />
significantly due to technological advances allowing efficient management of interference<br />
without the need for alignment.<br />
The options that we considered as part of the Cost Benefit Analysis (CBA) included a<br />
number of scenarios for the average size of the spectrum yield for Partial Alignment.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
For Option 1 (Full alignment), we assume that 2-3 MHz of spectrum is freed<br />
up with the alignment process. Taking the mid-point of 2.5MHz, we calculated<br />
the value of the spectrum at that point using Administrative Incentive Pricing<br />
(AIP) rates.;<br />
For Option 2 (partial alignment, with spectrum used for narrowband services),<br />
we assume that no spectrum is freed up with partial alignment... We assume<br />
that any spectrum freed up will not be useable for alternative narrowband<br />
services due to the complexity of the alignment process under this option;<br />
For Option 3 (partial alignment, with spectrum used for wideband services),<br />
we assume that 4.5 MHz of paired spectrum is made available for wideband<br />
services.. The estimated value of this spectrum is based on spectrum<br />
auctions of similar spectrum and compared to the value that would be<br />
obtained through the AIP process.<br />
When previous studies on the benefits of spectrum efficiency through band alignment were<br />
conducted, there were no recommendations other than direct regulatory action to producing<br />
higher spectrum efficiency. However, the introduction of spectrum trading is an alternative<br />
method to achieving greater spectrum efficiency.<br />
Through spectrum trading, there may be the potential for spectrum efficiency benefits<br />
equivalent to those that would occur under direct regulatory action. It could be the case that<br />
band alignment could potentially occur under a spectrum trading scenario as an alternative<br />
to direct regulatory action. In comparison to direct regulatory action, it is unclear the exact<br />
amount of spectrum that will be freed up through spectrum trading and over what period of<br />
time this would occur.<br />
We have considered whether spectrum can be yielded through spectrum trading only and<br />
have concluded that this may not be the case. We have based this on the views of<br />
stakeholders and in our view the configuration of the <strong>UHF2</strong> band is very complex and will<br />
involve a mixture of commercial trading with a number of different organisations for some<br />
Page 83<br />
abc
form of alignment to occur. Additionally, even if there is some spectrum yield, it is unclear<br />
whether spectrum users would actually return the spectrum freed up through the spectrum<br />
trading process back to <strong>Ofcom</strong> to allow for future allocations of assignments. Another point<br />
to consider is the option of auctions in which spectrum will be more likely to remain for a<br />
considerable period in the hands of the users or organisations who value it.<br />
In order to evaluate any potential net benefits as viewed through the options analysed for<br />
Full Alignment and Partial Alignment, the spectrum fee at AIP rate would need to be<br />
evaluated. The value of this <strong>UHF2</strong> spectrum, is complex to calculate if awarded by auction<br />
given the number of different users allocated in the spectrum.<br />
We consider that there are likely to be two scenarios:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
the first scenario being in which sufficient spectrum is made available with an<br />
appropriate spectrum mask to enable wideband or IMT2000 services;<br />
the second scenario whereby spectrum is auctioned to enable the provision of<br />
narrow band services.<br />
We discuss these two scenarios in the next two sections. We draw on observations,<br />
assumptions and analysis from previous studies and then provide our assessment of the<br />
relative value of <strong>UHF2</strong> spectrum under both scenarios if it was awarded through an auction<br />
process.<br />
i. <strong>UHF2</strong> Narrow Band and Wide Band Spectrum Valuation<br />
AIP rates are used for narrowband and wideband spectrum to value the spectrum freed up<br />
as a result of the band alignment process. In our view, AIP rates are the best method of<br />
estimating the value of the spectrum.<br />
We have also considered how the results of the Cost Benefit Analysis (CBA) would change if<br />
the value of the freed up spectrum was based on the auction values in the 5 October 2006<br />
<strong>Ofcom</strong> UHF1 spectrum auction of 412-414MHz paired with 422-424MHz. 43<br />
Using current AIP values the CBA was calculated for the freed up spectrum as a result of the<br />
band alignment process. A lower CBA value was calculated using AIP and was closer in<br />
value to the auction values in the 5 October 2006 <strong>Ofcom</strong> UHF1 spectrum auction of 412-<br />
414MHz paired with 422-424MHz. This resulted in the CBA being more negative.<br />
ii. <strong>UHF2</strong> Wideband Spectrum Valuation<br />
The <strong>UHF2</strong> spectrum as mentioned in Chapter 3 will be recognised as an IMT2000 band,<br />
although CDMA 450 networks have already been deployed in a number of European<br />
countries. According to potential suitors for providing a wideband network in the UK, a<br />
minimum of 4.5MHz with appropriate spectrum masks would be required. The 3G auction in<br />
43 http://www.ofcom.org.uk/media/news/2006/10/nr_20061009<br />
Page 84<br />
abc
the UK has skewed the market valuation of spectrum, so for this band we will look at the<br />
following:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
2.6GHz European auctions; and<br />
450MHz European awards.<br />
The Norwegian auction of the 2.6GHz band in November 2007 provided a fair index of future<br />
pricing of 2.6GHz, with an index of US$0.047 per MHz per Pop 44 , which equates to<br />
approximately £1.44m per MHz for the UK valuation. This figure provides a guide as to the<br />
value of IMT2000 spectrum, where fees have been in decline since the ‘3G Auctions’. We<br />
note the propagation characteristics are very different for the 2GHz band, but the technology<br />
for broadband wireless services could operate in both bands.<br />
Table 16 below summaries three recent auctions, which resulted in CDMA450 technology<br />
being deployed.<br />
Table 16 450MHz Selected European Valuations<br />
Auction Spectrum Index<br />
$/MHz/Population<br />
Norway,<br />
2004<br />
Sweden,<br />
2005<br />
Denmark,<br />
2006<br />
453-457.5 / 463-467.5 MHz<br />
(9MHz)<br />
453-458MHz/463-448.8MHz<br />
(3.6MHz)<br />
453.0-457.5 MHz and 463.0-<br />
467.5 MHz (9 MHz licence)<br />
Page 85<br />
UK equivalent<br />
Value per MHz<br />
0.0046 £143k<br />
0.412 £12.6m<br />
0.08 £2.45m<br />
In order to estimate the value of any UK future wideband spectrum in the <strong>UHF2</strong> band, we<br />
have taken the index from the Norwegian 2.6GHz auction and the Swedish and Danish<br />
auctions of 450MHz and have taken the mid point as a fair representation as the start range<br />
(US$0.17/MHz/Pop). This assumption is based on the recent introduction of multi-band 3G<br />
handsets in Sweden (including 450MHz Band), but taking into account that in the UK we<br />
have excellent cellular coverage with low levels of population in rural areas. We have<br />
discounted using the Norwegian auction valuation, as the technology was immature at that<br />
time. We therefore predict the value of <strong>UHF2</strong> spectrum in the UK to be between £5.2m and<br />
£12.6m per MHz for spectrum available to wideband services.<br />
44 According to Policy Tracker<br />
abc
iii. <strong>UHF2</strong> Spectrum Valuation<br />
Table 17 below summarises our conclusions on the approximate value of aligned <strong>UHF2</strong><br />
spectrum.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 17 Summary of <strong>UHF2</strong> Spectrum Valuation<br />
Spectrum allocation Value<br />
Contiguous <strong>UHF2</strong> CEPT aligned paired<br />
spectrum, for 0 – 4.5 MHz, with spectrum<br />
masks that support deployment of<br />
narrow band technologies<br />
Contiguous <strong>UHF2</strong> CEPT aligned paired<br />
spectrum for 4.5 – 10MHz, with spectrum<br />
masks that support the deployment of<br />
wide band technologies (IMT2000)<br />
iv. Consumer and Producer Surplus<br />
Page 86<br />
£690k, per MHz (excluding NI) for a<br />
15 year period (based on AIP rates).<br />
£5.2m (PAMR) and £12.6m (Cellular)<br />
per MHz (excluding NI) for a 15 year<br />
period.<br />
One fundamental measure of economic benefits is provided by consumer and producer<br />
surplus. A 2002 Radiocommunications Agency <strong>study</strong> of consumer surplus used survey<br />
results to calculate residential and business average consumer surplus per month of £16<br />
and £44 for public cellular systems. 45<br />
Based on these figures and using a range of methods accounting for number of mobile<br />
subscribers and inflation, Europe Economics calculated an average value of consumer<br />
surplus for 2006 at approximately £18bn. 46 This figure provides some idea of the possible<br />
magnitude of consumer surplus associated with the provision of wide-band cellular services<br />
in the <strong>UHF2</strong> band.<br />
It may be reasonable to assume producer surplus for wide-band cellular service is fairly<br />
small. This would reflect a high degree of competition between existing mobile operators in<br />
the UK now and into the future. Concentrating on consumer surplus only, a very broad idea<br />
of its size can be gleaned from the same <strong>study</strong> carried out by Europe Economics. Based on<br />
company accounts, consumer surplus for cellular mobile was calculated at approximately £2-<br />
£3bn.<br />
From these estimates, we have calculated the total amount of consumer surplus for<br />
wideband cellular services. We have based this on the Europe Economics report and<br />
adjusted the value of benefits to reflect the amount of spectrum available for wideband<br />
cellular services (4.5MHz paired spectrum).<br />
45 http://www.ofcom.org.uk/static/archive/ra/topics/economic/economicisreport_final.pdf<br />
46 http://www1.bsc.org.uk/research/radiocomms/reports/economic_spectrum_use/economic_impact.pdf<br />
abc
We assume that the 4.5MHz paired spectrum would be used either for cellular services or for<br />
PAMR services. We have included estimates of consumer surplus for both these scenarios.<br />
We note that European Economics did not calculate consumer surplus estimates for PAMR.<br />
The original consumer surplus of £19Bn for the cellular mobile was converted to a per MHz<br />
figure, to arrive at the equivalent for 2 x 4.5MHz cellular spectrum. This is an overestimate<br />
given the type of service that will be offered using the <strong>UHF2</strong> band. In particular, we expect<br />
the take-up to be in rural areas (special multi-band phone, more expensive, larger) which will<br />
reduce the size of the market. Hence, we have discounted the equivalent 4.5MHz value by<br />
90%, which represents the rural market split in the UK (22% of population (ONS), with 50%<br />
of that market (estimated) with limited 3G coverage. A summary of the consumer surplus<br />
used for this <strong>study</strong> can be seen below in Table 18.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 18 Consumer Surplus<br />
Page 87<br />
Consumer surplus<br />
(£m 2006)<br />
Cellular Mobile (total market) 18964<br />
Wide-band Cellular services in <strong>UHF2</strong> (2 x<br />
4.5MHz)<br />
8.3.5 Value of increased Standardisation and Harmonisation<br />
We consider that the standardisation and harmonisation benefits argued in previous studies<br />
and discussed earlier in this chapter are less important than they used to be. This is due to<br />
the introduction of equipment and technologies that provide more flexibility in the spectrum<br />
configuration that it uses, meaning that a rigid duplex split is not necessarily needed. In<br />
addition, new technology such as DMR also has the capability of over the air re-tuning which<br />
provides a relatively quick and simple method of moving a network to a different spectrum<br />
configuration. In particular, the availability of different spectrum bands for the same service is<br />
no longer the barrier that it once was as more spectrum is made available to economies of<br />
scale in production.<br />
However, we consider that full band alignment will deliver some economies of scale in<br />
production of handsets. We have included an estimate of these benefits in the results. More<br />
details on our assumptions are included in Appendix H.<br />
8.4 Interference Costs and Benefits<br />
In Chapter 6, we discussed the amount of interference due to aligned or reversed aligned<br />
and the impact this would have on service area. In this section, we discuss the benefits of<br />
reducing interference through the alignment of the spectrum.<br />
50<br />
abc
8.4.1 High level cost of interference<br />
Firstly, we consider at a macro-economic level the impact of interference, based on the<br />
amount of coverage reduction at each base station. Although the costs are spread over the<br />
whole assigned community, which isn’t representative of reality, the headline figures provide<br />
a measure of the impact of interference.<br />
We have assumed the following:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
On-site, E&PSS (post 2009) and peer-to-peer services are not affected by<br />
interference - all other assignments are impacted and taken into account;<br />
From the interference analysis conducted in Chapter 6, we have taken<br />
account of assignments that in the worst case would have >3dB interference<br />
at the base station receiver;<br />
The number of assignments affected ranges from 3500 to 4500.<br />
The average interference ranges from 6 to 9dB, in the area seen at Figure 14<br />
The average capital cost of a base station is assumed to be £3k<br />
Figure 21 shows the range of costs attributed to a loss of coverage of interference. Since<br />
the interference level is modelled at a maximum co-ordination level, this range should be<br />
read as a near-maximum cost attributable to the loss of coverage by continental interference<br />
whilst the UK is reversed-aligned. The range of these costs is from £4.2m to £7.4m.<br />
£ Million<br />
£8.0<br />
£7.5<br />
£7.0<br />
£6.5<br />
£6.0<br />
£5.5<br />
£5.0<br />
£4.5<br />
£4.0<br />
Figure 21 Costs of reverse-aligned spectrum in terms of loss of coverage<br />
6 7 8 9<br />
Average Interference Across Assignments in area upto 3dB loss at the base station Receiver (dB)<br />
Page 88<br />
Number of Assignments<br />
There are further costs associated with further base stations required, which are attributed to<br />
site rental, maintenance and new equipment provision. This is assumed to be on average<br />
4500<br />
4000<br />
3500<br />
abc
£2k per annum per assignment. These costs plus the equipment costs amortised over a 5-<br />
year replacement cycle provide an annum cost in the range of £3.6m - £6.4m.<br />
8.4.2 Detailed look at Interference costs<br />
Let’s consider the cost to a logistics service within a town, which used PMR to manage a<br />
fleet in an ideal situation with aligned spectrum covered the desired service area, but with<br />
reversed aligned supplemented the coverage with GSM calls. In this particular scenario, the<br />
costs of GSM could be taken as the cost-benefit of alignment.<br />
Assuming that the most popular monthly tariff of £15- £25 per month will cover the number of<br />
calls when out of area due to interference, the cost is directly a proportion of the number of<br />
mobiles. This would be the most likely scenario and therefore if a fleet of 30 mobiles is taken<br />
as an average, the direct costs would be in the range £5.4k- £18.75k per annum. This cost is<br />
dependent on the amount of interference and the tariffs arranged by the company.<br />
If we assume the first scenario is typical and like the further base stations scenario in the<br />
previous paragraph is examined between 3500 – 4500 assignments, then the cost ranges<br />
between £18.9m and £84.375m. Table 19 below summaries the high level benefits of<br />
aligned spectrum.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 19 Summary of high level Benefits of Aligned spectrum<br />
Additional Costs of base stations<br />
owing to loss of coverage<br />
area/interference through<br />
reversed aligned spectrum<br />
Additional costs of alternative<br />
communications owing to loss of<br />
coverage/interference through<br />
reversed aligned spectrum<br />
8.5 Results<br />
Min Annual<br />
(£m)<br />
Page 89<br />
Max Annual<br />
(£m)<br />
Average Annual<br />
(£m)<br />
£3.6 £6.4 £5<br />
£18.9 £84.5 £51<br />
The options that we will review in terms of the cost benefit analysis are:<br />
Option 1: Full band alignment by <strong>Ofcom</strong> intervention;<br />
Option 2: Partial band alignment, with spectrum yield used for narrowband<br />
services;<br />
Option 3: Partial band alignment, with spectrum yield used for wideband<br />
services.<br />
abc
8.5.1 Option 1 – Full Alignment<br />
Details on the assumptions used for Full Alignment are in Appendix H. The estimates of the<br />
costs are based on the PA Consulting report with the benefits calculated taking into account<br />
the following areas:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Reduced continental interference reduces network costs and/or reduces<br />
cellular costs used at the edge of the network;<br />
Spectrum yield benefits calculated to be 2-3MHz (we take a mid-point of<br />
equivalent AIP values and our own assessment of spectrum value of<br />
equivalent spectrum at recent auctions);<br />
Reductions in handset costs due to economies of scale;<br />
Introduction of digital technologies such as TETRA equipment that requires a<br />
10MHz duplex split;<br />
The <strong>UHF2</strong> band in the UK will be in the same configuration as Europe in line<br />
with the ERC Recommendation TR25-08;<br />
Reduced interference impact on the network due to a 7dB reduction in<br />
interference from the Continent.<br />
Table 20 below summarises the net benefits for full alignment.<br />
Managed Band<br />
Alignment<br />
Table 20 Summary on Full alignment Net Benefits<br />
Costs NPV Benefits NPV Net<br />
Benefits<br />
NPV<br />
£286m £77.7m (reduced interference and<br />
handset prices)<br />
+ £19.5m (spectrum value)<br />
Page 90<br />
-£189m<br />
8.5.2 Options 2 and 3 – Partial Alignment, with different uses for the spectrum yield<br />
(narrowband versus wideband)<br />
For the partial alignment options, we have chosen two scenarios; for narrowband services<br />
and the other for wideband services. In both cases partial alignment on a mainland UK<br />
basis 47 is only considered as the interference of aligned and unaligned within the borders of<br />
the UK would prove to be inefficient.<br />
The benefits are similar to the benefits that occur for Full band alignment, but the size of the<br />
benefit is proportional to the number of base stations impacted for each of the band<br />
47 Excludes Channel Islands and Northern Ireland<br />
abc
alignment options. However, there are no benefits to handset price reductions due to<br />
economies of scale, as we assume that these will only occur with full band alignment.<br />
The value of the spectrum yield will differ according to its use, which is discussed below.<br />
8.5.3 Narrowband Partial Alignment<br />
Firstly narrow band partial alignment would need to focus on a particular area of spectrum,<br />
where costs for alignment are at a minimum, the services are not of significant national<br />
importance and could be disrupted for a short duration and the community would benefit.<br />
Our high level analysis demonstrates that the Business Radio (BR) spectrum with a 10MHz<br />
duplex split adjacent to the E&PSS spectrum, which will be vacated by 2009, offers the most<br />
attractive option for narrow band partial alignment for the following reasons:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The PSSPG have indicated that they would support re-configuration activities<br />
and the spectrum to be vacated would provide a good starting point since one<br />
of the frequency legs of the pair will not involve alignment costs or disruption.<br />
Business Radio services are often able to re-tune within the band and most<br />
services would not require a parallel network to manage any disruption as<br />
most are not concerned with critical national infrastructure.<br />
Figure 22 below shows four areas depicted as Blocks A-D for consideration for partial<br />
alignment.<br />
Figure 22 Areas for Potential Partial Alignment of Narrowband Spectrum<br />
Page 91<br />
abc
Block Frequency<br />
Range<br />
(Amount)<br />
(MHz)<br />
A 460.0 -<br />
462.475<br />
(2.475)<br />
B 454.025 -<br />
454.85625<br />
(0.83125)<br />
C 455.5 -456.05<br />
(0.55)<br />
D 456.0625 -<br />
456.975<br />
(0.9125)<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 21 Narrowband Alignment Analysis<br />
Single<br />
Frequency<br />
Assignments<br />
Dual<br />
Frequency<br />
Assignments<br />
Page 92<br />
Density<br />
(Assignments<br />
Per MHz)<br />
Notes<br />
5299 5548 4383 2893 of the dual<br />
frequencies in Block<br />
D<br />
1732 1511 3901 476 of the dual<br />
frequencies fall within<br />
block A<br />
27 1009 1883 461 of the dual<br />
frequencies fall within<br />
block A<br />
602 2893 3830 2893 of the dual<br />
frequencies in Block<br />
A<br />
The relative blocks of spectrum for analysis from Figure 22 have been analysed, with the<br />
summary in Table 21.<br />
The metric of assignment density shows that block C would require the least amount of<br />
assignments to be removed for a given return on spectrum, even though the spectrum<br />
aligned would be the least at 0.55MHz.<br />
Since all the partial alignment options are concerning Business Radio (BR) and with each<br />
option concerning a different number of assignments, at a high level the cost per Business<br />
radio assignment will provide a general cost metric to provide a proxy cost. Using the PA<br />
report of costs to align all BR users and distributing the site engineering costs, the proxy cost<br />
to align a BR assignment is £4997.<br />
abc
We assume that there is no spectrum yield for any of these partial alignments, neither were<br />
there benefits due to lower handset prices (as is the case of the Full alignment option). The<br />
benefits that were included were associated with lower continental interference.<br />
The results are summarised below in Table 22.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Table 22 High level Net Benefits of selected Partial Alignment<br />
Block No of assignments<br />
benefiting from<br />
alignment<br />
Cost in<br />
2008<br />
Benefit (Mean)<br />
NPV over 15<br />
years<br />
Page 93<br />
Net Benefit NPV over 15<br />
years<br />
A 2148 £54.2M £31.7M -£22.5M<br />
B 642 £16.2M £9.4M -£6.8M<br />
C 205 £5.2M £3.0M -£2.2M<br />
D 692 £17.5M £10.2M -£7.3M<br />
To simplify the analysis, we have only reviewed the CBA for each of the spectrum blocks<br />
identified. There may be a large range of other band alignment options that involve the<br />
impact of the residual release of spectrum to other blocks when aligned, see note column in<br />
Table 21.<br />
The residual release of spectrum as a benefit has not been calculated owing to the added<br />
complexity, but would need to be considered in any detailed analysis if this were an option<br />
that was likely to be considered.<br />
All of the partial alignment options result in a negative CBA, with Block C having the lowest<br />
negative result.<br />
8.5.4 Wideband Partial Alignment<br />
In the Wideband Partial Alignment, the Extended Block B (453.0125 - 454.85625MHz) aligns<br />
with Block A, from Figure 22, also Blocks C and D are considered for Partial Alignment.<br />
Blocks E in Figure 23 along with other blocks mentioned above has been considered for<br />
Partial Alignment. We have assumed that 2 x 4.5MHz would be required for wideband<br />
services as a minimum in the range 452.5-457.6MHz paired with 462.5-467.5MHz, which<br />
does not consider guard bands. In this band Programme Making and Special Events<br />
(PMSE), Scanning Telemetry (ST) and Business Radio services would be impacted, making<br />
this band difficult to align due to multiple stakeholders, however, if wideband CDMA services<br />
were to be provided stakeholders have informed us that this is the preferred band.<br />
The costs for moving equipment outside of <strong>UHF2</strong> double as a result compared to moving<br />
within the band, based on the analysis of the PA Consulting report.<br />
abc
Figure 23 below illustrates four areas depicted as Block E for consideration for partial<br />
alignment for the introduction of wideband services.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Figure 23 Area for potential alignment of Wideband Spectrum<br />
The key assumptions used for the partial alignment options are:<br />
PMSE has 4MHz of spectrum in the <strong>UHF2</strong> band, 2x1.25MHz is considered for<br />
Partial Alignment. This equates to 27.8 per cent of the <strong>UHF2</strong> band under<br />
consideration for Alignment;<br />
The total costs figures derived from the PA report for full alignment for PMSE is<br />
£29.5M, this figure has been adjusted for inflation from the total costs figures<br />
derived from the PA report for full alignment, so for 27.8 per cent of the PMSE<br />
band for Partial Alignment, the total cost calculated is £8.2M;<br />
The total cost figure derived from the PA report for full alignment for Scanning<br />
Telemetry is £23M, this figure gave a full total for Partial Alignment for Scanning<br />
Telemetry of £23M;<br />
Page 94<br />
Block E<br />
Sufficient information on the producer surplus of equipment is not available, but<br />
it can be assumed that this number is low given the uncompetitive nature of the<br />
market as digital equipment such as TETRA cannot be allocated in the <strong>UHF2</strong><br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
band in the UK, as the configuration of the <strong>UHF2</strong> band is the other way around<br />
to Europe and is not in accordance with ERC Recommendation TR 25-08;<br />
Consumer surplus figures on mobile services (e.g. CDMA 450) is not needed to<br />
be taken into account into the cost calculations for Partial Alignment as it is<br />
assumed that this figure is low. This low figure was derived from a <strong>study</strong><br />
conducted by Europe Economics on the average size of the market for mobile<br />
services;<br />
No reduction in handset prices as a result of undergoing Partial alignment.<br />
The results of our CBA modelling of partial alignment of block E are shown below at Table<br />
23.<br />
Block Frequency<br />
Range<br />
(Amount)<br />
(MHz)<br />
B<br />
Extended<br />
453.0125 –<br />
454.85625<br />
(1.84375)<br />
A 460.0 –<br />
462.475<br />
(2.475)<br />
C 455.5 –<br />
456.05 (0.55)<br />
D 456.0625 –<br />
456.975<br />
(0.9125)<br />
Table 23 Summary of Partial Alignment (Wideband) CBA results<br />
Single<br />
Frequency<br />
Assignments<br />
Dual<br />
Frequency<br />
Assignments<br />
Page 95<br />
No of<br />
Assignments<br />
benefiting<br />
from<br />
alignment<br />
Cost in<br />
2008<br />
Benefit<br />
(Mean)<br />
NPV over<br />
15 years<br />
2690 4860 1495 £37.7M Between<br />
£10.7M &<br />
£17.9M<br />
over 15<br />
years<br />
(£14.3M)<br />
5299 5548 2148 £54.2M Between<br />
£27.2M &<br />
£36.2M<br />
over 15<br />
years<br />
(£31.7M)<br />
27 1009 205 £10.4M<br />
[costs<br />
double]<br />
602 2893 692 £35M<br />
[costs<br />
double]<br />
Between<br />
£2.6M &<br />
£3.5M over<br />
15 years<br />
(£3.05M)<br />
Between<br />
£8.8M &<br />
£11.7M<br />
over 15<br />
years<br />
(£10.2M)<br />
Net<br />
Benefit<br />
NPV<br />
over 15<br />
years<br />
-£23.4M<br />
-£22.5M<br />
-£7.4M<br />
-£24.8M<br />
PMSE (1.25MHz x 2) £8.2M Marginal -£8.2M<br />
ST All £80M Marginal -£80M<br />
Spectrum Yield for Wideband (assuming value based on mid-point of Auction and AIP value) £36M +£36M<br />
Consumer Surplus £50M +£50M<br />
Total for Block E -£80M<br />
abc
8.5.5 Sensitivity analysis<br />
It is important to review the impact of key variables as part of any CBA. These key variables<br />
are used to test what impact they would make on the Options used for both narrowband and<br />
wideband services in the UK to the CBA results.<br />
i. Sensitivity on the costs of alignment<br />
For calculating the costs of band alignment, we have relied upon the results of the PA<br />
Consulting report on the cost for full band alignment. The results of that report included a<br />
detailed sensitivity analysis which was used in our analysis. Our sensitivity analysis has<br />
focused on the sensitivity of the assumption that we have made on the benefits received for<br />
each of the options.<br />
ii. Methodology used<br />
There are a number of techniques available for testing the sensitivity of the results. For the<br />
purposes of our analysis, we have used a simplified approach and reviewed the impact on<br />
the overall results realising marginal changes of 10 per cent benefits in key assumptions<br />
used.<br />
iii. Results and conclusions<br />
Table 24 presents the results of the sensitivity analysis for a number of factors used to<br />
assess the CBA for full band alignment, which tests the individual impact of each parameter<br />
in isolation. This provides a broad assessment of the impact of the changes on the key<br />
assumptions by varying the baseline assumption used in the modelling with an upper and<br />
lower bound. It can be seen that individually the impact of varying the key parameters is<br />
negligible and when applied to our CBA models, the impact on the overall results realised<br />
marginal changes of ±10 per cent net benefits.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 96<br />
abc
Table 24 Sensitivity analysis of key factors on size of benefits for Full Band Alignment<br />
Parameter Lower<br />
Limit<br />
Cellular Cost savings due to reduced<br />
interference (average Cellular cost<br />
saving per month)<br />
Number of base stations at risk of<br />
interference – impact on network cost<br />
savings<br />
Number of base stations at risk of<br />
interference – impact on Cellular cost<br />
savings<br />
Average number of mobile phones per<br />
base station<br />
Average level of continental<br />
interference (impact on total network<br />
cost savings)<br />
Average life of a base station – impact<br />
on network cost savings<br />
8.6 Conclusions<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
£4.50<br />
-£8.5M<br />
4500<br />
-£5.1M<br />
4500<br />
-£8.5M<br />
27<br />
-£8.5M<br />
6dB<br />
-£5.7M<br />
6 years<br />
-£2.0M<br />
Page 97<br />
Baseline<br />
assumption<br />
£5 per month<br />
[£84.4M]<br />
5000<br />
[£58.6M]<br />
5000<br />
[£84.5M]<br />
30<br />
[£84.5M]<br />
7dB<br />
[£58.6M]<br />
5 years<br />
[£58.6M]<br />
Upper<br />
Limit<br />
£5.50<br />
£8.5M<br />
5500<br />
£5.1M<br />
5500<br />
£8.5M<br />
33<br />
£8.5M<br />
8dB<br />
£5.7M<br />
4 years<br />
£1.7M<br />
% impact on<br />
overall CBA<br />
± 4.2 %<br />
± 2.6%<br />
± 4.2%<br />
± 4.2%<br />
± 2.9%<br />
± 1.0%<br />
The CBA provides a high-level assessment of the key costs and benefits and to assess the<br />
impact of changes in these costs and benefits as a result of broad regulatory intervention<br />
options. The results have been based on a number of assumptions about future unknowns.<br />
While every effort has been made to produce accurate results, the CBA should only be used<br />
to provide information at a broad level on the scale of costs and benefits for each of the<br />
options. If any of the options were to be explored further, then we would recommend that<br />
further detailed work be carried out on the costs and benefits.<br />
The CBA figures in tables Table 20 to Table 23, provide guidance, based on previous<br />
research and our assessment of the likely magnitude of net benefits for each option. These<br />
results show that all options to a greater or lesser extent have a negative CBA. The options<br />
can be ranked as follows:<br />
Base case (do nothing);<br />
Partial alignment (narrowband) – Block C only;<br />
Partial alignment (narrowband) – other blocks;<br />
Partial alignment (wideband);<br />
Full alignment – managed.<br />
In addition, we have drawn the following conclusions:<br />
There is no net benefit in partial or full alignment of the <strong>UHF2</strong> band.<br />
Partial alignment to enable the introduction of wideband services in <strong>UHF2</strong>, would<br />
lead to the disruption of many services and has a large negative net benefit.<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The sensitivity analysis results concluded that the impact on the overall results<br />
of key assumptions realised marginal changes of 10% net benefits in the CBA<br />
results, providing confidence that the assumptions made in the model are stable<br />
and has provided relatively sensible results.<br />
Page 98<br />
abc
9 Conclusions and Recommendations<br />
9.1 Introduction<br />
In this final chapter, we pull together the conclusions of the previous chapters with a brief<br />
discussion and analysis, and then provide our recommendations to <strong>Ofcom</strong> on the future<br />
policy suggested for the <strong>UHF2</strong> band.<br />
9.2 Summary of Findings<br />
To aid in the understanding of the conclusions and recommendations and to summarise our<br />
conclusions, we have posed the following key questions and provided our recommendation<br />
based on the findings of the report.<br />
9.2.1 Is there an appetite for spectrum re-configuration in the <strong>UHF2</strong> band?<br />
The main feature of most communication services in <strong>UHF2</strong> is that they are generally self-<br />
owned, self provided, and that the resilience of the service fits the need of the business and<br />
most importantly, there are no airtime charges. The provision of self-provided services has<br />
been a trade-off against functionality, resilience, capital and operational costs. It is clear that<br />
many of these services have needed to consider this business case of spectrum re-<br />
configuration in the <strong>UHF2</strong> band over many years, particularly since the advent of GSM<br />
technology, which has in the past removed users from the ‘business radio community’. The<br />
amount of assignments within this band have remained quite steady over the past 5 years,<br />
which suggests that a plateau has been reached for these niche services requiring<br />
communications that cannot be provided by an operator. The stakeholders within this band<br />
have confirmed they do not want any regulatory intervention to align the spectrum, unless<br />
they are fully financially compensated and in some cases, that continuation of service is<br />
guaranteed during any transition.<br />
9.2.2 Will the current services continue to be allocated in <strong>UHF2</strong> over the next 10 years ?<br />
It is anticipated that over the course of the next few years, if operator services introduce<br />
group calling and reduce airtime costs significantly, the majority of logistic services using<br />
wide area (i.e. Taxi), which use a mix of voice and data, would move from <strong>UHF2</strong> to operator<br />
provided services such as GSM/UMTS. However, on-site services are expected to maintain<br />
the same user base in <strong>UHF2</strong> or indeed grow slightly, even with on-site mobile services being<br />
offered through DECT, licensed exempt PMR446 and mobile technology in ISM bands.<br />
We believe that digital technology, mainly in the form of DMR will become prominent in this<br />
band, where there will be significant churn from analogue technology over the next 5-10<br />
years. While digital technology increases voice capacity through TDD, we believe that<br />
spectrum would not be significantly re-assigned to new use (through trading or return to<br />
<strong>Ofcom</strong>) as users propensity to fill the capacity through more calls or additional services such<br />
as data messaging will diminish this theoretical yield.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 99<br />
abc
We believe the user base will slowly diminish in <strong>UHF2</strong> over the next 10 years as equipment<br />
is replaced in wide area type services by as much as 50%, with these services being<br />
replaced by different type operators which will make the market more competitive. Much of<br />
this decline is predicated on the operators’ reduced airtime costs and the market’s<br />
communications costs appraisal, leading to a change to operator provider services.<br />
Therefore, if the spectrum yield from the reduction in the user base were aggregated then 2<br />
x 0.1MHz (1% of the <strong>UHF2</strong> Band) would be available for reassignment on a national basis.<br />
The impact of this potential yield of spectrum is minimal, even though 50% of a market<br />
sector (e.g. taxis) would no longer use this spectrum. Any further yield of spectrum, without<br />
regulatory intervention will be wholly dependent on the intentions of the PSSPG, with<br />
approximately 30% of the band available for re-assignment.<br />
9.2.3 Is interference a key driver within the <strong>UHF2</strong> band for spectrum re-configuration?<br />
Interference is an issue for some people in particular and it is most troublesome when the<br />
interference is not constant. However, interference can be mitigated and users accept that<br />
radio use is sometimes unreliable. Therefore, to justify an interference solution through re-<br />
configuration, a compelling business case would need to be shown. Our research shows<br />
that even at a macro-economic level there is no economic benefit.<br />
The only time that a business would possibly move out of a band is when the communication<br />
system becomes so unreliable that the system needs to be changed and is costing the<br />
company financial resources. The choices, which a business would then have, would be to<br />
look at alternative means outside of the <strong>UHF2</strong> band or possibly operator provided services.<br />
Recently businesses have not relocated systems within or outside of the band because of<br />
interference, mainly because very few cases have been reported and there is little use on<br />
the continent to cause interference. However, if the situation were to change significantly<br />
with the introduction of IMT2000 services in the <strong>UHF2</strong> band on the continent, then it is<br />
possible that systems would become un-useable on the South East Coast of the UK due to<br />
interference.<br />
The problem remains that in a market led approach with interference, where only a small<br />
portion of the market is disadvantaged, in this case, the South East of the UK, some areas of<br />
the UK will continue to be disadvantaged until the whole of the UK is aligned. This is due to<br />
the ripple effect whereby if the South East is aligned then the Midlands receive interference<br />
etc, so the interference just moves as systems are aligned. Therefore, the rest of the<br />
country has no particular reason to align, as there would be little benefit, unless the ripple<br />
effect is managed.<br />
9.2.4 What is likely to happen within the <strong>UHF2</strong> band if there is no direct regulatory<br />
intervention?<br />
We believe most stakeholders would be satisfied with no direct regulatory intervention.<br />
Indeed a statement to this effect would provide security of tenure in the band rather than the<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page 100<br />
abc
egulatory uncertainty, which has left businesses in uncertainty for of the past few years. It is<br />
likely that systems will continue to be replaced and maintained and over a number of years,<br />
with some services over-time moving out of the band. For those services that are in the<br />
South East it is likely that increased interference will either force a move outside of the band<br />
or indeed, force an alignment of ‘pockets’ of spectrum. <strong>Ofcom</strong> and the E&PSS spectrum<br />
manager, through the market mechanisms such as trading and liberalisation, could facilitate<br />
alignment. However, the ‘ripple effect’ and guard bands required to manage interference<br />
would need to be managed, leading to difficulties in assigning spectrum.<br />
i. Guard Bands when aligning spectrum<br />
An important element of any partial band alignment or stepped full alignment is providing a<br />
measure of protection to protect each service where there is aligned and unaligned<br />
spectrum. This protection would in effect require allocating a guard band of the size of a<br />
channel and also geographical separation in the order of kilometres between adjacent<br />
channel users without additional site engineering being needed. Therefore, as alignment<br />
takes place on particular channels a ‘ripple effect’ occurs where assignments need to have a<br />
geographical separation. If alignment were to begin on the south coast, the effect of this<br />
would be larger geographical separations within the UK, creating a ‘ripple effect’ of<br />
interference. Managing interference for assignments would be complex to manage as the<br />
interference would have an effect on adjacent assignments. Therefore, co-ordinating and<br />
managing such an exercise is extremely labour intensive when having to consider a total of<br />
17,000 assignments in the bands, can lead to a question of practicality.<br />
9.2.5 If direct regulatory intervention was the way forward in the band, what would be the<br />
main challenges?<br />
It is likely that stakeholders would prevent any attempt of direct regulatory intervention<br />
without any assurances on costs and mitigating risks. Managing the costs and practical<br />
implementation of a managed partial or full alignment project would be complex due to a lack<br />
of resources such as skilled labour and high costs, which as identified in this report return no<br />
net benefit.<br />
It is our opinion that the only possible practical method of aligning spectrum in a co-ordinated<br />
and efficient manner would be to use an ‘Overlay auction’, which is described in more detail<br />
below. This method would be in our opinion the most appropriate method to introduce future<br />
wideband services within the <strong>UHF2</strong> band.<br />
i. Regulatory Intervention in a fragmented band<br />
One option for re-configuration of the <strong>UHF2</strong> band is an ‘overlay licence’ or ‘overlay auction’,<br />
which has been used successfully in other countries. There are two main circumstances in<br />
which a spectrum band may need to be cleared of existing users:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
when a band is fragmented;<br />
Page 101<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
where a band needs to be re-farmed.<br />
Overlay licences have been awarded for a block of spectrum which is occupied by existing<br />
licensees where more efficient use would result by bringing together fragmented use.<br />
An overlay licence gives the holder the right to do two things:<br />
use any unencumbered spectrum immediately (provided there is such<br />
spectrum), and;<br />
use encumbered spectrum as and when it is cleared by the incumbent<br />
licensees. The regulator would provide a period of notice to the incumbent<br />
licences to vacate the use of spectrum.<br />
Overlay licences have been used when there is a need to clear spectrum of existing users<br />
(as was the case in the USA and Canada), and when it is regarded as useful to create<br />
alternative arrangements for managing spectrum (as was the case in New Zealand).<br />
Overlay licences provide mechanisms for accelerating the reassignment of spectrum. This is<br />
achieved by the following:<br />
the overlay licensee is awarded rights to a block of spectrum which includes<br />
unencumbered and encumbered spectrum;<br />
the overlay licensee is permitted to start using any available unencumbered<br />
spectrum immediately;<br />
the regulator serves revocation notice on incumbents; and<br />
the overlay licensee is empowered to negotiate with incumbents on relocation<br />
or revocation before their revocation notice period terminates.<br />
In the case of <strong>UHF2</strong>, where the band is fragmented between a large number of small users,<br />
overlay licences could be issued to one or more overlay licensees with incumbent users<br />
either relocated to another band, or having their requirements met in some other way (e.g.<br />
by a service provider). However, the use of Overlay licensing needs to be balanced by a<br />
cost-benefit analysis, socio-economic and political impact of undertaking such an option.<br />
9.3 PEST Analysis<br />
We conducted a Political Economic Social and Technical (PEST) analysis to aid us in<br />
making recommendations for this complex topic. The PEST analysis is a standard tool used<br />
by management consultants when faced with analysing complex subjects on a variety of<br />
levels. We have produced a summary of the results, shown below at Figure 24, based on<br />
the three main options: no intervention, partial or full alignment.<br />
Page 102<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Technological: New Services<br />
Technological: Technology Access<br />
Technological: Interference<br />
Social: Rural acccess to IMT2000<br />
Figure 24 PEST Analysis<br />
Political: Current Legislation/Home Market<br />
1<br />
0.9<br />
0.8<br />
0.7<br />
0.6<br />
0.5<br />
0.4<br />
0.3<br />
0.2<br />
0.1<br />
0<br />
Social: Consumer choice<br />
Page 103<br />
Political: European Legislation<br />
Economic: CBA<br />
Political: Government Policies<br />
No Intervention<br />
Full Intervention<br />
Partial Intervention<br />
Political: Lobbying/Pressure Groups<br />
As can be seen from Figure 24 there is strong Political and Economic motivation for not<br />
intervening and allowing the market mechanism of spectrum trading and liberalisation to<br />
enable the part of the market that may wish to align. Full intervention has strong social and<br />
technological benefits but would have little political or economic incentive. However, partial<br />
alignment seems to sit in between the two extremes, with lesser technological and social<br />
benefits than full alignment but greater political and economic reasoning.<br />
9.4 Summary of Conclusions<br />
We have provided detailed conclusions at the end of each chapter, but have summarised<br />
these into the following main points:<br />
Stakeholders see little benefit in alignment and we believe that any forced<br />
alignment without funding would be blocked politically;<br />
The <strong>UHF2</strong> spectrum within the UK for the South East of the UK is at a<br />
disadvantage due to the possibility of interference from the Continental<br />
Europe disadvantages the South East UK mainly in terms of interference.<br />
This disadvantage can manifest itself through loss of coverage area and<br />
temporary denial of service. The current interference situation is manageable<br />
owing to little use of the <strong>UHF2</strong> band on the continent;<br />
The <strong>UHF2</strong> band will be an IMT2000 band, which may mean that in the future<br />
Western Europe will change its use from Narrowband to Wideband services<br />
within this band, which could potentially lead to increased interference;<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
The Cost Benefit Analysis indicates that ‘forced’ alignment within the band<br />
produces no net benefits. The costs of alignment outweigh the potential<br />
benefits;<br />
There are now regulatory measures in place coupled with the appointment of<br />
a future Spectrum Manager for the E&PSS that would aid the market to<br />
proceed with any future alignment of spectrum within the <strong>UHF2</strong> band.<br />
The CBA results below for Table 25 indicates that other than proceeding with the ‘do nothing<br />
option, the case for partial alignment is marginal.<br />
Table 25 Ranked CBA<br />
Rank Net Benefit<br />
1 Base case (do nothing) -<br />
2 Partial alignment (narrowband) – Block C only -£2.1m<br />
3 Partial alignment (narrowband) – other blocks -£6.7m to -£22.4m<br />
4 Partial alignment (wideband) -£80m<br />
5 Full alignment – managed -£189m<br />
The Band Alignment project was withdrawn by <strong>Ofcom</strong> in 2004. This project was generally a<br />
process of partial alignment steps, through which these steps are taken through the use of<br />
vacant spectrum as a result of the Emergency Services migrating out of the band, for which<br />
over a period of a few years would have resulted in full alignment. We do not believe that<br />
this process would have been suitable to either industry or indeed <strong>Ofcom</strong> due to the<br />
upheaval, uncertainty and cost over a long duration this would have had on industry. We<br />
believe that if now <strong>Ofcom</strong> were to opt for partial or full alignment of the band, then the use of<br />
an Overlay auction process would be attractive, allowing notice to be served on incumbents<br />
of the <strong>UHF2</strong> band and allowing the market the option to migrate to new services and new<br />
spectrum. However, our analysis leads us to conclude that a policy of no regulatory<br />
intervention should be maintained, due to the introduction of flexible digital technology, the<br />
CBA results and the regulatory measures currently in place should enable the market to<br />
reconfigure the spectrum should they wish.<br />
9.5 Recommendations<br />
Following on from our conclusion that <strong>Ofcom</strong> should not force any re-alignment with <strong>UHF2</strong><br />
we have the following recommendations:<br />
Page 104<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
<strong>Ofcom</strong> should not directly intervene in any alignment of the <strong>UHF2</strong> band and<br />
should enable the market to align through market mechanisms such as<br />
trading and liberalisation, assisting where necessary;<br />
<strong>Ofcom</strong> should assist the E&PSS spectrum manager (Post 2009) in working<br />
closely with <strong>UHF2</strong> stakeholders in any re-configuration of the band;<br />
MASTS should be modified or processes put in place to assess the impact of<br />
aligning a channel within unaligned spectrum and amendments to the<br />
algorithm for a guard band and geographical separation needed between co-<br />
channel users. This tool should also be used to assist in any future re-<br />
configuration of the band;<br />
<strong>Ofcom</strong> should proceed with developing an MOU with the its continental<br />
neighbours to avoid any future interference;<br />
<strong>Ofcom</strong> must decide and communicate the future policy for the <strong>UHF2</strong> band in<br />
order to remove uncertainty over the band to users;<br />
<strong>Ofcom</strong> should continue to monitor interference that may be caused by any<br />
future deployments of wideband networks from the Continent and the impact<br />
this would have from current licensees;<br />
If <strong>Ofcom</strong> does decide to proceed with alignment, we would recommend Partial<br />
Alignment where users of the <strong>UHF2</strong> band are least impacted and further<br />
detailed analysis is carried out.<br />
Page 105<br />
abc
Appendix A: Stakeholder Engagement<br />
Air Radio<br />
Arqiva<br />
Communities and Local Government (CLG)<br />
CSS Spectrum Management Services<br />
EADS<br />
Federation of Communication Services (FCS)<br />
Intellect<br />
Joint Frequency Management Group (JFMG)<br />
Motorola<br />
National Police Improvement Agency (NPIA)<br />
Network Rail<br />
Office of Communications (<strong>Ofcom</strong>)<br />
On site Communications Association (OSCA)<br />
Zapp Holdings (formerly Inquam)<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page A-1<br />
abc
Appendix B: Interference<br />
B.1 Types of interference<br />
<strong>Ofcom</strong> manages spectrum to avoid harmful interference 48 primarily 49 on two levels; co-<br />
channel and adjacent channel interference, which we discuss in the following sections of<br />
this appendix.<br />
The consequences of co-channel or adjacent channel interference in voice schemes<br />
manifests itself to the users as poor audio quality or other audio signals breaking through<br />
into the system. For data systems, the effects are data errors, or no data received at all.<br />
Interference in its worst case can cause systems to be blocked, which in effect makes them<br />
unusable.<br />
B.2 Co-Channel Interference (CCI)<br />
To avoid harmful interference no two assignments should normally be assigned the same<br />
frequency (co-channel) in the same geographical area. Planning criteria is used to<br />
determine the frequency re-use. For co-channel use in the <strong>UHF2</strong> band it is essential to<br />
understand both the technical criteria that determine the re-use distance and also where<br />
the terrain forms a natural obstacle between different co-channel users. As spectrum is<br />
becoming increasingly more utilised and the availability of usable frequencies becomes<br />
scarce, natural obstacles can play an important role. The efficient use of spectrum is the<br />
balance between avoiding harmful interference and the potential to assign as many<br />
channels as close together as possible.<br />
The mitigation techniques that are used to reduce the levels of CCI in <strong>UHF2</strong> include<br />
CTCSS (Continuous Tone Code Squelch System) which transmits encoded tones onto the<br />
channel which is then detected by the receiver to filter the wanted signal. This type of<br />
mitigation technique enables the users to share a radio channel resource, which is blocked<br />
from use by other users during transmission. This orderly use of the channel enables many<br />
users to share a channel in a manner that provides polite access. Other CCI mitigation<br />
techniques include cross-polar discrimination, this can be in the order of 12 dB protection,<br />
where one service uses horizontally polarised antennas against another co-channel service<br />
operating vertically polarised antennas.<br />
Many different applications and services are used in the <strong>UHF2</strong> band across the UK. Many<br />
channels that are occupied are used by mobile systems on a national basis. However,<br />
48 where “harmful interference” is defined by ITU as that which “…endangers the functioning of a radionavigation service or of<br />
other safety services or seriously degrades, obstructs or repeatedly interrupts a radiocommunication service operating in<br />
accordance with Radio Regulations.”<br />
49 There are others not covered by this report such as inter-modulation and 3 rd order harmonics<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page B-1<br />
abc
considering the vast and diverse use of the <strong>UHF2</strong> spectrum, CCI does not occur very often.<br />
This is due to the careful planning of frequency assignments, the application of standard<br />
channel protection requirements such as system protection ratios and the use of standard<br />
equipment whose radiated emissions are limited by specifically designed spectrum masks.<br />
The benefit of this high level spectrum management means that more usable channels are<br />
available for assignment and the optimum use can be gained from the spectrum.<br />
B.3 Adjacent Channel Interference (ACI) and Out Of Band Emissions<br />
(OOBE)<br />
Spectrum planning and the process of assigning new frequencies must consider the impact<br />
of adjacent channel interference (ACI) and Out-of Band Emissions (OOBE).<br />
ACI can occur when two services are located in close proximity with their assigned<br />
frequencies are on adjacent channels. ACI can cause those channels to become unusable<br />
due to the high level of unwanted emissions radiating into adjacent services.<br />
The diagram shows the desired<br />
(wanted) signal in the frequency<br />
domain and where the relative<br />
interference can occur. Out of band<br />
interference occurs adjacent to the<br />
wanted signal where some of the out<br />
of band signal spills over into the<br />
wanted signal which causes the<br />
interference.<br />
To mitigate against this type of interference, channel protection ratios are used in the<br />
interference calculations to determine the acceptable level of signal into the wanted<br />
system. The level of protection ratio is dependent on whether the unwanted system is co-<br />
channel, adjacent channel or 2 nd adjacent and so on. It is often the case for spectrum<br />
planning that to make the most efficient use of the spectrum to determine if a new service<br />
can use the adjacent channel near to the existing service. In order to introduce a new<br />
service geographically close to an existing service stringent limits must be applied to the<br />
out of band emissions of the adjacent service so as not to cause harmful interference.<br />
Out of band emissions are the unwanted emissions that are transmitted outside the<br />
necessary bandwidth of the system. This is managed using spectrum emission masks that<br />
are put in place to reduce/remove the out of band emissions of radio equipment. However<br />
if the incorrect limits are put in place this mechanism can cause adjacent channel<br />
interference to a system.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page B-2<br />
abc
In Europe harmonised radio equipment standards are developed in accordance with the<br />
relevant EC directives that enable equipment manufacturers and national regulatory bodies<br />
to specify the radiated limits of out of band emission masks. The radiated emission limits<br />
that are chosen must provide adequate protection in the out of band domain, therefore<br />
ensuring no harmful interference to frequencies operating in the adjacent channel. The<br />
adjacent channel power for land mobile systems is:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
60 dB for 12.5 kHz separation<br />
70 dB for 20/25 kHz separation<br />
Equipment deployed in the <strong>UHF2</strong> band in the UK must be products from technically<br />
compliant manufacturers which must be in accordance with The Radio Equipment and<br />
Telecommunications Terminal Directive 99/5/EC (R&TTE). It is illegal to sell and bring in to<br />
service equipment that is not compliant to the relevant equipment standard or meets the<br />
national interface requirements.<br />
B.4 Potential Sources of Interference<br />
Radio equipment operating within the <strong>UHF2</strong> band could potentially suffer interference from<br />
a number of interference sources across the UK. Systems operating near or within the 450-<br />
470 MHz band include the Fylingdales radar. There is also the potential for users in the<br />
<strong>UHF2</strong> band to suffer interference from wideband digital systems in the future. Wideband<br />
systems introduced into the <strong>UHF2</strong> band could interfere with the incumbent narrowband<br />
systems that currently operate in the <strong>UHF2</strong> band.<br />
B.4.1 Fylingdales<br />
The Fylingdales Radar operates in the frequency band 420-450MHz, with the vast majority<br />
of energy directed upwards, for the detection of potential missiles and aircraft. The main<br />
beam cannot be aimed lower than an elevation of 3° above the horizontal, with the first side<br />
lobe at an angle of 2.9° to the main beam, which is considered the main source of potential<br />
interference. In theory, the radar can only interfere with base stations at a height of 30m for<br />
distances less than 150km away from the radar site.<br />
Business Radio shares the UHF 1 band with the MoD and all business assignments in the<br />
UHF1 band must be co-ordinated with RAF Fylingdales, ensuring that a set power-sum<br />
interference base-line is not exceeded. <strong>Ofcom</strong> has developed a tool to undertake this co-<br />
ordination, to validate any amendments or applications within the UHF1 band.<br />
The impact to the users in the <strong>UHF2</strong> band from Fylingdales is not significant enough to<br />
require formal coordination. However, it is understood that operation near the Fylingdales<br />
site require processes for setting up an exclusion zone for users operating near the radar.<br />
Page B-3<br />
abc
In addition, it is unclear whether the OOBE from Fylingdales would affect any services<br />
around 450MHz, and business radio services wishing to use UHF spectrum may have to<br />
use <strong>UHF2</strong>.<br />
B.4.2 Wideband Digital Services<br />
It is possible that in future Wideband Digital Services could be used in the 450-470 MHz<br />
band. These wideband digital services have a bandwidth that is greater than 25 kHz. In<br />
practice services that could potentially be deployed in <strong>UHF2</strong> which use bandwidths greater<br />
than 25 kHz are TETRA and CDMA systems. The latest release of TETRA systems specify<br />
bandwidth up to maximum of 150 kHz for TETRA TEDS. For CDMA 450 the bandwidth<br />
specified is 1.25 MHz.<br />
The operation of TETRA TEDS in the 450-470 MHz band would require guard bands to be<br />
equal to or greater than half the bandwidth of operation in order to prevent interference to<br />
the incumbent narrowband systems. The effect of wideband systems into narrowband<br />
systems is the overall level of the noise floor increase across the wider bandwidth can<br />
cause increased interference to narrowband systems. This can be significant enough to<br />
cause narrowband systems to be unusable. This could be due to blocking effects in the<br />
receiver front end.<br />
With appropriate guard bands CDMA technology should be able to co-exist with other<br />
narrow-band technologies such as DMR and TETRA, with the following mitigations:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Introduction of filters, guard bands or frequency separation around the duplex<br />
transition frequency.<br />
A guard band of 200kHz in the uplink-uplink (MS-BS) and Downlink-downlink<br />
(BS-MS) interference paths.<br />
A frequency separation of 125kHz at the duplex transition frequency between<br />
the uplink and downlink bands (MS-MS) interference path.<br />
A frequency separation of 1875kHz between the uplink and downlink bands<br />
(BS-BS) interference path.<br />
Page B-4<br />
abc
Appendix C: <strong>UHF2</strong> Interference Regulation<br />
C.1 Introduction to interference regulation<br />
International radio communications regulations are negotiated, agreed and mandated<br />
between member states through the activities of the International Telecommunications<br />
Union (ITU). Regulations concerning the use of the radio spectrum consider the affects of<br />
interference and the ITU outlines the regulations that members states must adopt to ensure<br />
the proper procedures are in place to reduce or prevent interference from occurring<br />
between users and member states.<br />
The UK, through its legislation The Wireless Telegraphy Act 2006, specifies its own<br />
regulations for managing interference through powers granted by the Government to<br />
<strong>Ofcom</strong>. It is these regulations that define the nature of interference in the context of using<br />
the radio spectrum and how it is managed in the UK.<br />
Interference becomes harmful if the operation of wireless telegraphy apparatus creates<br />
dangers or risk of danger to services providing safety of life but also if it degrades,<br />
obstructs or repeatedly interrupts anything that is being broadcast or otherwise transmitted:<br />
(i) by means of wireless telegraphy; and<br />
(ii) in accordance with a wireless telegraphy licence, regulations under section 8(3) or a<br />
grant of recognised spectrum access or otherwise lawfully.<br />
The description of harmful interference given above can also be regarded as undue<br />
interference, since the Wireless Telegraphy Act states:<br />
“Interference with any wireless telegraphy is not to be regarded as undue for the purposes<br />
of this Act unless it is also harmful.”<br />
It is <strong>Ofcom</strong>’s responsibility to maintain a high level of spectrum quality and reduce or where<br />
possible prevent the occurrence of interference. To aid the understanding of the types of<br />
interference that users may suffer, two high level definitions are given below:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Legal transmissions, where authorised users have been incorrectly<br />
assigned frequencies or are operating outside of the permitted criteria.<br />
Illegal transmissions operating on the same or adjacent frequencies as<br />
authorised users.<br />
<strong>Ofcom</strong> have an obligation under the Wireless Telegraphy Act 2006 to control both of these<br />
types of interference in order to maintain clean and efficient spectrum. Regulations set out<br />
in the Act enable <strong>Ofcom</strong> to define guidelines for mitigating interference and if necessary<br />
<strong>Ofcom</strong> will intervene to remove the source of interference. The adverse consequences of<br />
Page C-1<br />
abc
interference affect users, operators, suppliers and manufacturers who all rely on the safe,<br />
reliable and available operation of the spectrum.<br />
Legal transmissions are managed by adopting clear spectrum policy guidelines and<br />
creating technical frequency criteria and technical parameters that can be easily<br />
implemented when assigning spectrum.<br />
Illegal transmissions are controlled either through monitoring by <strong>Ofcom</strong> or by users<br />
reporting interference to <strong>Ofcom</strong>, who would then investigate the matter further.<br />
C.2 Interference environment for <strong>UHF2</strong> band<br />
Users of <strong>UHF2</strong> spectrum currently benefit from the planning and management of<br />
interference by <strong>Ofcom</strong>. Assignments in the <strong>UHF2</strong> band are made based on technical<br />
criteria defined by <strong>Ofcom</strong> and knowledge of the interference environment and incumbent<br />
use. To enable the appropriate planning of frequency assignments in the <strong>UHF2</strong> band the<br />
following spectrum management instruments are used:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Interface Requirements considering the emission masks and equipment<br />
standards;<br />
Technical frequency assignment criteria (TFAC);<br />
Mobile Assignments Technical Systems (MASTS)<br />
International coordination agreements e.g. Berlin Agreement, Memorandum<br />
of Understanding (MoU);<br />
Spectrum usage rights (SUR’s).<br />
These instruments aid the management of interference and define the service area, out of<br />
band and spurious emission limits and transmission rights of licensees. In conjunction with<br />
these instruments, <strong>Ofcom</strong> is able to issue a variety of different licence classes that meet<br />
the specific needs of users, such as shared or exclusive use of an assignment or a mixture<br />
of both.<br />
The management of frequencies is conducted using known propagation characteristics,<br />
system losses and antenna systems for calculations to determine usable and interference<br />
limited service areas to ensure safe and reliable operation of the radio spectrum.<br />
In the following sub sections, we describe each of the instruments that are used to aid the<br />
management of spectrum to fully understand the complex process for making frequency<br />
assignments in the <strong>UHF2</strong> band. Each sub section describes a particular policy, guideline or<br />
requirement that applies to licensees and users of the <strong>UHF2</strong> band.<br />
Page C-2<br />
abc
C.2.1 Interface Requirement (IR)<br />
Interface requirements specify the minimum technical requirements of a particular<br />
technology or service. Licensees operating in the <strong>UHF2</strong> band are required to adhere to the<br />
minimum requirements of IR2044 for Land Mobile Services or IR2030 for Short Range<br />
Devices.<br />
The particular requirements that would affect the use of equipment in the <strong>UHF2</strong> band are<br />
the equipment parameters specified in the IR and the requirements applied to achieve the<br />
desired level of compatibility within the channel spacing for land mobile services, this<br />
currently includes 12.5 kHz and 25 kHz. <strong>Ofcom</strong> has recently announced that IR2044 will be<br />
updated to include 6.25 kHz channel spacing for use in the UK.<br />
C.2.2 Technical Frequency Assignment Criteria (TFAC)<br />
The Technical Frequency Assignment Criteria (Ofw164) describes the technical<br />
parameters and the processes for frequency assignments for Business Radio services.<br />
The TFAC applies to all frequencies used for Business Radio services.<br />
A new TFAC for business radio is currently under development by <strong>Ofcom</strong> and provides the<br />
technical parameters for the newly developed licence products discussed in Chapter 2.<br />
The new TFAC contains the details of the new MASTS software tool giving a description of<br />
the process of how MASTS will be used to make assignments. This new process for<br />
making assignments will benefit users operating in the <strong>UHF2</strong> band due to increased<br />
flexibility of use of the spectrum. Users will be able to increase the volume of their mobile<br />
network more easily and without reference to <strong>Ofcom</strong>. Furthermore, there will be no<br />
restriction on the type of technology used, as long as it does not exceed the limit of<br />
causing interference to neighbouring users.<br />
The TFAC for scanning telemetry (Ofw 49) contains the frequency criteria specifically for<br />
fixed terrestrial point to point and point to multipoint services in the <strong>UHF2</strong> band. This<br />
document describes the particular criteria networks must adhere to for successful<br />
frequency assignment. The criteria can include calculations for EIRP of transmitters, co<br />
channel protection requirements and specifications of particular antenna design.<br />
C.2.3 Mobile Assignments Technical System (MASTS)<br />
MASTS, an automated frequency assignment tool, has been in development for a number<br />
of years and will be in service by the end of 2008. The MASTS tool will be used for making<br />
assignments for all areas of business radio including <strong>UHF2</strong>.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page C-3<br />
abc
The benefits of using MASTS in particular for <strong>UHF2</strong> assignments is the ability to quantify<br />
the spectrum quality in terms of interference, and determine the amount of available<br />
spectrum for use in the band. Ultimately, MASTS will be used to make more effective<br />
assignments due to the predictive nature of analysis of the interference environment. This<br />
will result in either more channels available for assignment in the same frequency band or<br />
being able to ‘squeeze’ more geographical users from the existing channels. Using the<br />
MASTS algorithm a ‘Band Alignment tool’ was developed and in 2004 it was calculated that<br />
if the assignments were re-packed in the <strong>UHF2</strong> band then <strong>Ofcom</strong> could have had a<br />
spectrum yield of between 2-3MHz 50 .<br />
This tool will assign spectrum based on a set of rules and technical criteria (introduced in<br />
the new (TFAC)) that will determine the spectrum quality and protection requirements. The<br />
tool is also able to take account of terrain and other assignments thereby defining which<br />
frequencies can be used in a particular location. This is a change to the current primary<br />
practice of establishing a generic protection distance between base stations for particular<br />
licence classes.<br />
When the MAST tool is used to assign channels in the <strong>UHF2</strong> band, in its current unaligned<br />
state, it is likely that a few more assignments may be made in spectrum otherwise thought<br />
as full. This packing of assignments may lead to incumbents being subjected to more<br />
interference than previously experienced. However it should be noted that all assignments<br />
suffer from interference; the difference with MASTS is that the level of interference will be<br />
planned and part of the licence conditions.<br />
The MASTS process is underpinned by the Technically Assigned licence product for<br />
shared and exclusive use. An assignment can be identified for an activity factor, which is a<br />
measure of what percentage of time an assignment is transmitting. For example, a shared<br />
assignment is an assignment that transmits no more than 50% of the time in its busiest<br />
hour. An exclusive assignment is one that either transmits up to 100% of the time, more<br />
than 50% of the time in its busiest hour or requires extra protection because of either<br />
business or safety critical reasons. The activity factor determines the amount of time that<br />
an assignment may block another assignment from transmitting at that point in time.<br />
With the nature of Business Radio in a shared environment, there may be instances when<br />
a user exceeds the activity factor (as defined by their assignment type) over a short period.<br />
If there are continual breaches of the guideline criteria then it may be necessary to liaise<br />
with the users concerned and move them to Exclusive status or move them to a different<br />
channel (where possible).<br />
MASTS will benefit users of the <strong>UHF2</strong> band as it can be used to help reduce the likelihood<br />
of interference by way of more carefully assigning spectrum. MASTS will have the ability to<br />
coordinate aligned and non-aligned <strong>UHF2</strong> frequencies that should there be alignment of<br />
the band there are tools in place to aid the development of new systems helping prevent<br />
50 According to the Radiocommunications Agency/<strong>Ofcom</strong><br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page C-4<br />
abc
the likelihood of increased interference. In addition, there is scope for the tool to assist in<br />
the market aligning the spectrum, assignment by assignment.<br />
C.2.4 International coordination and Memorandum of Understanding<br />
(MoU)<br />
<strong>Ofcom</strong> has a duty to co-ordinate all assignments with neighbouring countries to manage<br />
the risk of international interference. Either this is achieved through ITU regional<br />
agreement treaties such as Geneva 06, or an agreed Memorandum of Understanding<br />
(MoU), or in the absence of a formal agreement, the Harmonised Coordination Method<br />
(HCM) Agreement (formerly the Berlin Agreement) is used (adhering to the general<br />
principals of CEPT Recommendation T/R 25-08 for <strong>UHF2</strong>).<br />
If a proposed assignment is in breach of the requirements in place then it is the<br />
responsibility of the country wishing to use the assignment to send a request for<br />
International Co-ordination to the countries affected. Assignment will often depend on<br />
whether a specified concession can be agreed upon. Such concessions are usually agreed<br />
upon in the form of an MOU, where usually, preferential channels to each party are defined<br />
where the normal co-ordination level can be exceeded to a specified level. The UK does<br />
not have an MoU for the <strong>UHF2</strong> band and therefore by default complies with the procedures<br />
in accordance with the HCM Agreement. The necessity for adopting these coordination<br />
procedures is bound by the ITU Radio Regulations that state that national administration<br />
must notify the ITU of any frequency assignment likely to cause harmful interference into a<br />
neighbouring administration.<br />
A possible consequence of continental interference to licensees operating in the <strong>UHF2</strong><br />
band in the UK could be that their service becomes unusable. In the case of mission critical<br />
systems and E&PSS this is unacceptable and is not an option that would be tolerated by<br />
users and licensees. Currently, the low level activity in the <strong>UHF2</strong> band in continental<br />
Europe is not posing an immediate threat to UK licensees, so currently there is no cause<br />
for concern.<br />
The procedure in place, the HCM, is specified for co-ordinating CEPT harmonised<br />
spectrum, which the UK is not harmonised to. The problem of not being harmonised, but<br />
having a default co-ordination procedure is illustrated in the figure below.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page C-5<br />
abc
The figure above illustrates <strong>UHF2</strong> continental interference between Europe and the UK.<br />
As the UK is non-CEPT aligned the base transmitter frequency in Europe is on the same<br />
frequency (f2) as the UK base station receive. The implications of this are the base station<br />
transmitter in Europe generates co-channel interference to base stations receivers<br />
operating in the UK. It is conceivable a mobile in the UK trying to communicate with a base<br />
station in the UK is unable to do so due to interference from Europe. Chapter 6 investigates<br />
the interference scenario between mobile networks deployed in the UK suffering<br />
interference from networks deployed in continental Europe. The modelling includes the<br />
impact to narrowband and wideband systems.<br />
C.2.5 Spectrum Usage Rights (SUR)<br />
Spectrum usage rights are currently being debated with <strong>Ofcom</strong> and the industry to<br />
determine how usage rights of spectrum would affect users and licensees. Users of<br />
spectrum will have as a main priority the availability of services using that spectrum. This<br />
implies a strictly controlled interference environment where service availability is assured.<br />
SUR are in direct support of providing technology neutrality, where currently spectrum<br />
masks and TFACs make assumptions on the technology used.<br />
Currently the use of spectrum is managed by the knowledge and understanding of the<br />
technologies and systems being deployed so the amount of interference is controlled<br />
indirectly. In future, the rights of licensees will be defined in terms of the maximum Power<br />
Spectrum Density that can be received at a boundary. Therefore, where there is inflexibility<br />
of use, SURs could provide a solution where a user could introduce a new service or<br />
technology that can use the geographical or spectrum mask more efficiently.<br />
Users of spectrum in the <strong>UHF2</strong> band could make particular use from SURs especially for<br />
users of mission critical systems and emergency and public safety services. It is vital these<br />
services do not suffer harmful interference that could affect safety of life services such as<br />
the Fire and Rescue Services radio network as the consequences could potentially be<br />
disastrous. SURs would provide the type of solution to these problems by specifying the<br />
maximum interference that can be tolerated by these critical systems thus enabling the<br />
development of networks and technology around them without further disruption.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page C-6<br />
abc
SURs could also benefit other business radio users in the <strong>UHF2</strong> band. SURs offer the<br />
flexibility to change use, which could be a change in technology or increase in power levels<br />
or deployment density. This type of flexibility would enable development of networks, or the<br />
introduction of a new technology benefiting the industry as a whole.<br />
The most recent statement released from <strong>Ofcom</strong> (Dec 07) on controlling interference using<br />
Spectrum Usage Rights specifies the transition arrangements of SURs from development<br />
to implementation. It specifically examines the format of SURs and the definition and<br />
change process to licenses. This will have a positive impact for users of the <strong>UHF2</strong> band<br />
and will be realised as licensees continue to develop their networks and wish to introduce<br />
new technologies and systems in order to meet demand of the end users. However, the<br />
complexity of working within SURs is above and beyond the capabilities of most of the<br />
industry, where it is either anticipated that the industry will push back the introduction of<br />
SURs on the grounds of complexity or a new advisory industry will be created based<br />
around SURs.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page C-7<br />
abc
Appendix D: Modelling Interference<br />
D.1 Modelling of Stations<br />
To undertake the modelling, fictitious interfering networks have be defined in Europe and<br />
live networks in the UK modelling for both the narrowband and wideband scenarios<br />
required to demonstrate interference scenarios. It is important to note that the modelling<br />
demonstrates the scenario of the maximum permitted interference from the continent in<br />
terms of the co-ordination recommendation TR25-08.<br />
D.2 Interfering Stations in Europe<br />
To model interference from the continent a fictitious network consisting of a transmitter<br />
every 10km along the North and East coasts of France, Belgium and Holland was<br />
modelled. The transmitters have a defined antenna height of 30m above ground level with<br />
a maximum ERP of 25W and an activity factor of 1, meaning that they are permanently<br />
transmitting (active). The ERP was then modified where necessary so that the power<br />
incident at the coast of the UK meets TR25-08 recommendations of 20dBuV/m for 10% of<br />
the time at 10m above ground level for a single transmitter, see the figure below.<br />
This fictitious network has two variants, the first meets the CEPT frequency plan in that it<br />
will transmit in the 460 to 470 MHz band and receive on the 450 to 460MHz band (Transmit<br />
on from mobile users) and the second will be CEPT reversed so that the effects of UK<br />
becoming CEPT aligned can be examined. These systems are also on the same co-<br />
channel as the narrowband and wideband modelling in UK.<br />
Co-located with the base stations is a mobile station that is also implemented with the<br />
same antenna pattern as the base station (omni) but with an antenna height of 1.5m agl<br />
and with 25W transmit power with an activity factor of 0.5. The transmit and receive<br />
frequencies are exchanged for the mobile station. The mobile station is not coordinated<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Page D-1<br />
abc
with the UK and hence may not meet the TR25-08 recommendation for exported<br />
interference.<br />
D.3 UK Narrow Band Stations<br />
To be able to determine if changes in the spectrum usage have an effect on the current<br />
state of affairs, major users of the spectrum were selected for inclusion in the modelling.<br />
The frequencies were mapped on to a consistent raster assignment with a 10MHz duplex<br />
split. This was undertaken to simplify the interference calculations and to remove frequency<br />
channel effects from the modelling.<br />
The following mobile parameters were applied:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Product Code Description Mobile TX power<br />
(Watts)<br />
401060 On site PBR speech and data 5W<br />
407010 Wide-area PBR speech and data 25W<br />
407020 Wide area PBR (one way paging and<br />
speech)<br />
409010 National & Regional PBR 25W<br />
502020 Public mobile data 10W<br />
Police Police Service 25W<br />
Fire Fire Service 5W<br />
Antenna height 1.5m above ground level<br />
Antenna gain 0dBd<br />
Transmit and Receive frequencies exchanged<br />
To allow the model to be exercised<br />
with other systems without having to<br />
take into account the real channel<br />
frequencies, all the selected records<br />
have had their frequencies modified<br />
so that all the users are 2 channels<br />
apart (so that adjacent channel<br />
effects will not be seen) in the<br />
middle of the band with a consistent<br />
10MHz duplex spacing.<br />
The following figure shows both the<br />
Page D-2<br />
NA<br />
The green dots<br />
indicate stations<br />
with frequency<br />
duplex<br />
assignments and<br />
the blue dots<br />
indicate single<br />
frequency<br />
operation.<br />
base stations and mobile stations (approx. 4350 records) were used in the modelling.<br />
abc
D.4 UK wide band stations<br />
We assumed an IMT-2000 network, with assumed traffic model characteristics for a mature<br />
network, a 10km cell radius in rural areas and 1km cell radius in urban areas. The following<br />
parameters were used:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Base station parameters Mobile station<br />
parameters<br />
Transmit Power 40 dBm 20 dBm<br />
Antenna Gain 17 dBi 0<br />
Antenna height 30 m 1.5 m<br />
Receive thermal noise -129 dBm -104 dBm<br />
Duplexing FDD FDD<br />
CEPT Alignment CEPT Reversed CEPT Reversed<br />
Bandwidth 1.25 MHz 1,25 MHz<br />
The coverage from the wideband systems were calculated and the power in a 12.5KHz<br />
bandwidth was checked at the edge of the trading area. The limits at the edge of the 50km<br />
trading squares (32dBµV/m in 1.25MHz, which is equivalent to 12dBµV/m into 12.5kHz)<br />
were met, so the configuration would represent a potential realistic future scenario.<br />
Page D-3<br />
abc
D.5 Modelling areas of UK base stations<br />
The modelling uses all of the stations described earlier in the modelling area but the<br />
receiving interference and blocking effects are only taken in three areas of interest:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Thames Gateway - this area is Urban,<br />
suburban and rural and will have severe<br />
interference for the continent and<br />
interference from other users in UK.<br />
Coventry & Birmingham - this area will<br />
have little interference from the continent but<br />
will influence interference in the London<br />
area. The area will be interfered with by<br />
stations in the London area and the rest of<br />
UK.<br />
Bradford & Blackburn & Preston – this area will not have interference<br />
form the continent but will suffer interference from mainly Coventry &<br />
Birmingham area and to a less extent the Thames gateway and the rest of<br />
the UK.<br />
When the model is exercised, changes in the user parameters in the areas of interest will<br />
allow the interference effects on any users to be seen. This <strong>study</strong> only shows interference<br />
in the areas of interest to provide a base-line view of interference changes. The other<br />
stations outside of the areas of interest will contribute to the degradations in the areas of<br />
interest but are not considered as receivers.<br />
Page D-4<br />
abc
51 See B.2<br />
Appendix E: Narrowband Interference Modelling Results<br />
The following two tables show a summary of the results obtained from the modelling,<br />
showing the levels of interference for base stations and mobiles.<br />
No<br />
Continental<br />
Interference<br />
CEPT<br />
aligned<br />
Continental<br />
Interference<br />
CEPT<br />
reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Effect of continental interference on Base Station receivers in UK<br />
Base stations<br />
Modelling area<br />
Average Noise Level<br />
(dBm)<br />
Thames Gateway Birmingham Bradford<br />
Page E-1<br />
-113.8 -118.34 -125.8<br />
Number of Blockers 3.69 0.78 0.06<br />
Standard deviation of<br />
noise level<br />
Average Noise Level<br />
(dBm)<br />
6.8 5.01 9.67<br />
-111.17 -118.12 -125.8<br />
Number of Blockers 3.69 0.78 0.06<br />
Standard deviation of<br />
noise level<br />
Average Noise Level<br />
(dBm)<br />
6.19 4.96 9.67<br />
-111.6 -118.2 -125.79<br />
Number of Blockers 3.89 0.78 0.06<br />
Standard deviation of<br />
noise level<br />
6.12 4.98 9.67<br />
Where the “Average Noise Level” is the power sum of all the stations that are co-channel<br />
(continental and UK based) and do not block the receiver for all the stations within the<br />
modelling area in dBm. This data can be used with knowledge of the receiver’s noise floor<br />
to determine the degradation in receiver performance in each area. This can then be<br />
equated to loss of service area using the graphs in Section 6.5.<br />
The “Number of Blockers” is the average number of blocking signal levels into each<br />
station within the modelling area. This shows how many users are in effect sharing any<br />
given channel and as a consequence the availability of the channel for any user. The<br />
blocking level used is -112dBm and this level is used for both narrowband and wideband<br />
systems. Although the term blocking denotes no entry, in reality this means that the radio<br />
channel is actually shared, which is common place in PMR, where users wait until the<br />
channel is not busy before transmitting through the aid of CTCSS 51 .<br />
abc
The “Standard deviation of noise level” is the standard deviation of the noise levels<br />
incident at the test receivers in the modelling areas.<br />
No<br />
Continental<br />
Interference<br />
CEPT<br />
aligned<br />
Continental<br />
Interference<br />
CEPT<br />
reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Effect of continental interference on Mobile receivers in UK<br />
Mobiles<br />
Modelling area<br />
Thames Gateway Birmingham Bradford<br />
Average Noise Level -119.42 -136.09 -141.19<br />
Number of Blockers 2.38 0.25 0<br />
Standard deviation of<br />
noise level<br />
Page E-2<br />
6.7 4.04 4.38<br />
Average Noise Level -119.07 -136.00 -141.19<br />
Number of Blockers 2.38 0.25 0<br />
Standard deviation of<br />
noise level<br />
6.32 3.98 4.38<br />
Average Noise Level -118.95 -135.95 -141.18<br />
Number of Blockers 2.38 0.25 0<br />
Standard deviation of<br />
noise level<br />
6.21 3.94 4.38<br />
Note: the areas highlighted in Yellow are where the external interference from the<br />
Continent is below the typical noise floor of the receiver.<br />
Product Type<br />
Contribution from Continental base stations for % time<br />
AVERAGE Noise Level (dBm) % time<br />
Thames Gateway Birmingham Bradford<br />
10% Time 1% Time 10% Time 1% Time 10% Time 1% Time<br />
401060 -124.8 -110.9 -146.0 -135.4 -157.9 -143.1<br />
407010 -130.0 -116.5 -125.4 -114.9 -156.4 -142.5<br />
407020 -123.1 -111.2 -134.5 -123.9 -144.7 -129.5<br />
409010 -118.1 -106.6<br />
502020 -108.0 -101.5 -126.3 -115.7 -156.7 -144.6<br />
Police -117.7 -106.5 -152.0 -137.7<br />
Fire -140.8 -130.2<br />
Total -120.3 -108.9 -134.6 -124.0 -153.6 -139.5<br />
abc
Appendix F: Wideband Interference Modelling Results<br />
Wideband systems were modelled in each of the areas of interest as described in<br />
Appendix E. These wideband systems also meet the current trading rules described in<br />
Appendix G.<br />
When considering the effects of narrow band systems on the wideband systems the<br />
modelling considered 20 channels worth of narrowband users (4350 stations) and not 100+<br />
channels (20,000+ stations), owing to modelling time constraints. Therefore a fifth of the<br />
wideband systems spectrum is interfered with by the narrowband systems. Scaling up the<br />
narrowband contribution by 7.5dB provides an estimate of the narrowband interference that<br />
can be obtained in the full wideband channel.<br />
Initially, single wideband networks were deployed in the areas of interest with all the other<br />
areas keeping their existing narrowband systems and modelled to produce the results<br />
below.<br />
Results for isolated Wideband systems deployed in the areas of interest<br />
WIDEBAND BASE STATIONS Modelling areas Single Wide Band Systems<br />
No Continental<br />
Interference or<br />
Narrowband local<br />
UK interferers<br />
Wide band systems<br />
in isolation<br />
CEPT aligned<br />
Continental<br />
Interference<br />
CEPT reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Thames Gateway Birmingham Bradford<br />
Average Noise Level -97.1 -96.1 -100.68<br />
Number of Blockers 160 156.5 93.1<br />
Standard deviation<br />
of noise level<br />
Page F-1<br />
1.74 1.16 2.54<br />
Average Noise Level -84.1 -82.95 -87.98<br />
Number of Blockers 1781 470 202<br />
Standard deviation<br />
of noise level<br />
0.46 0.91 2.6<br />
Average Noise Level -84.03 -82.94 -87.97<br />
Number of Blockers 1099 470 202<br />
Standard deviation<br />
of noise level<br />
0.46 0.88 2.6<br />
These results show that UK narrowband stations under the current trading rules have a<br />
catastrophic effect on wideband systems. The effect of narrow band systems in the UK is<br />
to increase the noise levels in the wideband systems by 13 -14dB under the current trading<br />
abc
ules. The number of blocking transmitters also increases significantly (2 to 10 times)<br />
depending on the density of narrowband uses in the surrounding areas.<br />
The effects of continental interference are minimal though if the same levels are used for<br />
narrowband systems when considering base station into base station interference,<br />
however the interference would have more of a significant impact.<br />
The table below shows the results of modelling multiple wideband systems:<br />
WIDEBAND BASE STATIONS<br />
CEPT aligned<br />
Continental<br />
Interference<br />
CEPT reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Modelling areas multiple Wide Band Systems<br />
Thames Gateway &<br />
Birmingham<br />
Thames<br />
Gateway<br />
Page F-2<br />
Birmingham & Bradford<br />
Birmingham Birmingham Bradford<br />
Average Noise Level -87.4 -84.4 -83.7 -89.7<br />
Number of Blockers 1329 422 416 143<br />
Standard deviation<br />
of noise level<br />
2.62 0.59 1.19 2.62<br />
Average Noise Level -84,4 -84.4 -83.8 -89.8<br />
Number of Blockers 1045 432 411 143<br />
Standard deviation<br />
of noise level<br />
0.44 0.55 1.19 2.61<br />
The noise and the number of blockers into the wideband systems decrease as other<br />
wideband systems are deployed and the number of potential narrowband users decrease.<br />
The narrowband users seem to have a disproportionate effect. This is because the spectral<br />
density of the narrowband systems is much greater and as existing narrowband systems<br />
are replaced with wideband systems hence the number of narrowband systems causing<br />
blocking levels and high interference levels drop. The overall result is that the current<br />
trading rules do not allow for a mixture of wide and narrowband systems to be deployed.<br />
This can be seen further, when all three modelling areas have wideband systems as shown<br />
in the table below.<br />
abc
WIDEBAND BASE STATIONS<br />
No Continental<br />
Interference but all<br />
Wideband Systems<br />
modelled<br />
CEPT aligned<br />
Continental<br />
Interference<br />
CEPT reversed<br />
Continental<br />
Interference<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Average Noise<br />
Level<br />
Number of<br />
Blockers<br />
Standard deviation<br />
of noise level<br />
Average Noise<br />
Level<br />
Number of<br />
Blockers<br />
Standard deviation<br />
of noise level<br />
Average Noise<br />
Level<br />
Number of<br />
Blockers<br />
Standard deviation<br />
of noise level<br />
Modelling areas multiple Wide Band Systems<br />
Thames Gateway Birmingham Bradford<br />
Page F-3<br />
-90.97 -91.63 -95.90<br />
316.93 198.06 103.13<br />
0.53 0.76 2.24<br />
-84.4 -85.5 -90.0<br />
1054 368 143<br />
0.43 0.88 2.57<br />
-84.4 -85.5 -90.0<br />
1047 377 143<br />
0.44 0.82 2.58<br />
Comparing the rows without continental interference with the cases where there are<br />
continental interferers, shows for either aligned or reversed that as in the narrowband<br />
situation continental interference has significant effect in the Thames Gateway area. In<br />
addition, it also shows that if the wideband system were to be CEPT aligned there would<br />
be an improvement.<br />
abc
Appendix G: Spectrum Trading and Liberalisation Modelling<br />
G.1 Method<br />
All co-channel users within grid referenced 50km squares were removed. No users outside<br />
the 50km squares exceeded -116dBm (This is equivalent to 12dBuV/m assuming a 0dBd<br />
antenna) in a 12.5 KHz band at 1.5m agl for 50% time at the 50km square border.<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Area of interest with 50 x 50km square trading areas<br />
The picture above shows the Thames Gateway modelling area with its associated 50km<br />
trading squares. The broadband system was modelled to cover only the selected Thames<br />
Gateway area (pink area). In addition the wide band systems were modelled to be within<br />
the 50km trading zone and meet the criteria at the trading zone border. As shown below.<br />
Wide band system deployed in the Bradford area-showing limit of interference to 12dBuV/m<br />
Page G-1<br />
abc
Appendix H: Cost Benefit Analysis Assumptions<br />
H.1 Option 1: Full Band Alignment<br />
Key assumptions used for this option include:<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Alignment takes place over 3 years. In year 4 the band is fully aligned;<br />
Benefits and costs staggered - (20% accrue in Year 1, 30% accrue in Year<br />
2, 50% accrue in Year 3, from Year 4 onwards, all costs have occurred and<br />
100% of benefits are achieved each year);<br />
Alignment does not occur until E&PSS has vacated the band;<br />
Assume a 2 step alignment with existing <strong>UHF2</strong> spectrum (probably the<br />
E&PSS) used for parking or parallel networks;<br />
There will be a spectrum yield of 2-3 MHz;<br />
Interference reduced from an average of 7dB across the impacted area –<br />
benefits lead to mixture of:<br />
Lower GSM costs of £5 per mobile (assume 30 mobiles per base<br />
station with 5000 base stations subject to interference);<br />
Allows for a 45% reduction in network size (taking 5 years to<br />
reconfigure network) (ie. The network coverage of each base station<br />
increases by 45 per cent allowing for a reconfiguration of the network<br />
over time and a reduction in the number of base stations needed for a<br />
given level of coverage). Assume 5000 base stations subject to<br />
interference;<br />
Costs based on PA Report – site engineering evenly distributed across<br />
segments;<br />
A 5% reduction in the average cost of handsets occurs as a result of full<br />
band alignment. The average cost of a handset is £65, the average number<br />
of handsets per base station is 30, and the total number of base stations in<br />
the UK is 14,790 (as per PA Consulting Report). For simplicity, we assume<br />
that the number of handsets does not change over the period of analysis.<br />
H.2 Option 2: Partial Band Alignment, with spectrum yield used for<br />
narrowband use<br />
Key assumptions used for this option include:<br />
Focus on 4 spectrum bands;<br />
Least impact on existing users, no impact on critical infrastructure;<br />
Page H-1<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Alignment does not occur until E&PSS has vacated the band;<br />
One step alignment due to spectrum available from E&PSS vacating band;<br />
No spectrum yield benefits;<br />
Reduction in interference leads to a mixture of reduced network size or the<br />
choice of the user to increase the size of the network and reduction in GSM<br />
and other narrowband equipment costs(as per Option 1);<br />
Costs based on PA Report – site engineering evenly distributed across<br />
segments.<br />
H.3 Option 3: Partial Band Alignment, with spectrum yield used for<br />
wideband use<br />
Key assumptions used for this option include:<br />
A targeted amount of spectrum (consistent with European CDMA-450) is<br />
aligned;<br />
A mixture of one-step and two-step alignment of spectrum;<br />
Some spectrum alignment involves moving some existing spectrum users<br />
permanently outside the band. We assume that this doubles the costs of<br />
alignment (based on findings of PA cost report). We assume that these<br />
users are provided with equivalent spectrum outside of the band at no extra<br />
cost to them – and that they are able to provide equivalent service to what<br />
they had provided in the 450-470 MHz band;<br />
Costs based on PA Report - Assume site engineering costs evenly<br />
distributed across segments;<br />
Reduction in interference leads to a mixture of reduced network size or the<br />
choice of the user to increase the size of the network and reduction in GSM<br />
and other wideband equipment costs(as per Option 1);<br />
Alignment results in a yield of 4.5 MHz paired spectrum, which is allocated<br />
to wideband use.<br />
H.4 Base Case – no intervention<br />
We assume the following if no action is taken to align the band:<br />
Spectrum trading does not lead to significant spectrum yield (existing<br />
allocations too complex for spectrum trading to make significant impact);<br />
Technology allows for interference to be managed at current levels;<br />
Any changes in continental interference can be managed without significant<br />
cost (more digital equipment allows for easier re-tuning using Over the Air<br />
retuning (OTAR technology) );<br />
Page H-2<br />
abc
3G<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Assume that continental neighbours do not introduce Wideband cellular at<br />
450MHz.<br />
Appendix I: Glossary<br />
ACI or Adjacent<br />
channel interference<br />
AIP<br />
Allocation<br />
Assignment<br />
CBA Cost Benefit Analysis<br />
Common Base<br />
Station (CBS)<br />
CDMA<br />
The third generation cellular phone system, currently being deployed, which<br />
offers higher data rates than previous systems allowing services such as<br />
videophones<br />
Interference occurring in the adjacent channel. Also, see Interference.<br />
Administered incentive pricing – setting charges for spectrum holdings to<br />
reflect the value of the spectrum in order to promote efficient use of the<br />
spectrum<br />
Used of a frequency band. Entry in the table of frequency allocations of a<br />
given frequency band for the purpose of its use by one or more terrestrial or<br />
space radio communications services or the radio astronomy service under<br />
specified conditions. This term is also applied to the frequency band<br />
concerned.<br />
Used of a radio frequency or radio frequency channel. Authorisation given by<br />
an administration for a radio station to use a radio frequency or radio<br />
frequency channel under specified conditions.<br />
A base station for PBR shared by users (also known as a community<br />
repeater) or a PBR installation giving wide area coverage under the control<br />
of one or more operators offering mobile communications on a commercial<br />
basis to a number of independent (usually business) users.<br />
Code Division Multiple Access: A radio transmission method where individual<br />
traffic transmissions use the same frequency, but where users’ traffic is<br />
separated by means of different codes.<br />
CEPT European Conference of Post and Telecommunications Administrations<br />
CTCSS Continuous Tone Code Squelch System<br />
DECT Digital Enhanced Cordless Telephone<br />
DMB Digital Multimedia Broadcasting<br />
DMR Digital Mobile Radio – a new PMR standard from ETSI<br />
Duplex Split<br />
Where sensitive receivers are separated from potentially hostile transmitters<br />
by a significant amount of spectrum<br />
Page I-3<br />
abc
DVB-H Digital Video Broadcasting - Handheld<br />
E&PSS Emergency and Public Safety Spectrum<br />
ECC European Communications Committee<br />
EFIS European Frequency Information System<br />
EIRP Effective Isotropically-Radiated Power<br />
ETSI<br />
EU European Union<br />
FDD<br />
GHz<br />
GSM<br />
Guard Band<br />
Harmful interference<br />
IMT 2000<br />
Interference<br />
ISM<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
European Telecommunications Standards Institute: a European based<br />
industry group that addresses equipment standards for telecommunications<br />
equipment.<br />
Frequency Division Duplex: A transmission method where the<br />
downlink/downstream path and the uplink/upstream path are separated by<br />
frequency.<br />
Gigahertz: a unit of frequency equal to 1000 million (1 x 109) Hz or cycles<br />
per second.<br />
Global System for Mobile communications: a 2G mobile phone technology.<br />
This is the technology behind the vast majority of 2G mobile phones used<br />
across Europe and is used by approximately 80% of 2G operators<br />
worldwide. Also sometimes referred to under its original meaning of “Groupe<br />
Spécial Mobile".<br />
Frequency range deliberately kept vacant between assignments to give a<br />
level of protection to users on either side from interference from each other.<br />
Interference with any wireless telegraphy is not to be regarded as undue for<br />
the purposes of this Act unless it is also harmful – WT Act<br />
International Mobile Telephony 2000: a family of global standards for mobile<br />
phone networks proposed by the ITU Also referred to as 3G.<br />
The effect of unwanted signals upon the reception of a wanted signal in a<br />
radio system, resulting in degradation of performance, misinterpretation or<br />
loss of information compared with that which would have been received in<br />
the absence of the unwanted signal.<br />
Industrial Scientific and Medical spectrum band, usually referring to the<br />
2.4GHz band with WiFi being one of the well known services<br />
ITU International Telecommunications Union<br />
KHz Kilohertz (frequency of one thousand Hertz)<br />
MHz Megahertz (frequency of one million Hertz)<br />
Page I-4<br />
abc
Paired Spectrum<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Used by FDD systems where two frequency bands are used together, one<br />
for transmission in the forward or downlink direction (e.g. base station to<br />
handset) and another for transmission in the reverse or uplink direction<br />
(e.g.handset to base station).<br />
PBR Private Business Radio<br />
PMR Private or Professional Mobile Radio<br />
PMSE<br />
Programme Making and Special Events – a class of radio application that<br />
supports a wide range of activities in entertainment, broadcasting, news<br />
gathering and community events<br />
PPDR Public Protection and Disaster Relief<br />
PSSPG Public Safety Spectrum Policy Group<br />
RA Radiocommunications Agency<br />
Scanning Telemetry<br />
Spectrum<br />
Framework Review<br />
(SFR)<br />
Spectrum<br />
liberalisation<br />
Spectrum Mask<br />
Spectrum trading<br />
Radio Frequencies that are licensed to the water, electricity and gas<br />
companies for the purposes of data collection and telecommand.<br />
<strong>Ofcom</strong> consultation on how spectrum will be managed in the future published<br />
in November 2004.<br />
Removal of restrictions from WT licences and RSA to allow holders greater<br />
flexibility to change how they use spectrum<br />
A way of specifying the amount of power that a transmitter is allowed to<br />
transmit into neighbouring frequency channels.<br />
Ability of spectrum users to transfer rights and obligations under WT licences<br />
to another person in accordance with regulations made by <strong>Ofcom</strong>. Trades<br />
may be total, partial, outright or concurrent<br />
SUR Spectrum Usage Rights<br />
TDD<br />
TETRA<br />
TFAC<br />
Time Division Duplex: A transmission method where the<br />
downlink/downstream path and the uplink/upstream path are separated by<br />
time.<br />
Terrestrial enhanced Trunked Radio Access: An ETSI standard for digital<br />
mobile radio utilised by fleets of vehicles such as emergency services,<br />
courier companies etc.<br />
Technical Frequency Assignment Criteria – a document produced by <strong>Ofcom</strong><br />
detailing how the licensees are assigned on a technical basis<br />
UHF Ultra High Frequency (300 MHz – 3 GHz)<br />
UHF I UHF frequency band from 410 – 450 MHz.<br />
Page I-5<br />
abc
UHF II UHF frequency band from 450 – 470 MHz.<br />
UKSSC<br />
Unpaired Spectrum<br />
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
Cabinet Office committee that discusses matters relating to the use of the<br />
radio spectrum, including by government departments and other public<br />
sector bodies<br />
Used by TDD systems where only one frequency band is used for<br />
transmitting in both the forward or downlink direction (e.g. basestation to<br />
handset) and the reverse or uplink direction (e.g. handset to basestation).<br />
WAPECS Wireless Access Platforms for Electronic Communications Services<br />
WRC World Radio Conference<br />
Page I-6<br />
abc
240689 - 450-470 Study Final Print<br />
Version (Dec08).doc<br />
www.mottmac.com<br />
Page I-7<br />
abc