Award of available spectrum: 872-876 MHz paired with 917-921 MHz
1.1 As part of Ofcom’s plans to implement its strategy of ensuring optimal use of the radio spectrum it has developed a programme of awards of wireless telegraphy licences that is designed to put available spectrum into the market. One such award is that of a wireless telegraphy licence for use of the spectrum band 872-876 MHz paired with 917-921 MHz. These frequencies are not currently licensed for use except for some non-operational use for test and development purposes.
1.2 This consultation sets out in detail Ofcom’s proposals for the award of a wireless telegraphy licence to use these frequencies, in the light of responses it received to the Spectrum Framework Review: Implementation Plan consultation document published in January 2005 .
Overview of the key proposals
1.3 Ofcom proposes, subject to the outcome of the current consultation, to hold an auction in early 2007 for the award of a national wireless telegraphy licence to use the spectrum band 872-876 MHz paired with 917-921 MHz.
1.4 The key elements of the proposed spectrum packaging and licensees’ rights and obligations for the spectrum to be auctioned are as follows.
- One UK licence will be offered.
- The licence will have an indefinite term with an initial period of fifteen years (during which time Ofcom’s powers to revoke will be limited).
- The licence will be tradable.
- The licence will be technology and application neutral.
- The licence will contain transmission rights and technical provisions designed to protect adjacent band users from harmful interference.
1.5 The key elements of the proposed award process are as follows.
- The auction will take the form of a single round sealed bid auction - each bidder will be able to submit one bid.
- The winning bidder will be the one that submits the highest bid.
- The auction will be based on a second price rule: the winning bidder will pay the price set by the next highest bid, or the minimum price if there is no other valid bid.
- The minimum price for the licence will be £50,000.
1.6 This consultation closes on 21 June 2006. Ofcom plans to hold a seminar on its proposals for interested parties in May or June.
1.7 After considering the responses to this consultation, Ofcom expects to publish the following key documents by the end of 2006:
- a short statement on this consultation;
- an Information Memorandum, describing in detail the relevant information for the award such as the award procedure and rules, prospective licence conditions and other information likely to affect use of the band;
- draft regulations setting out the auction rules;
- draft regulations to allow spectrum trading for this licence, including in respect of the wireless telegraphy register;
- a draft order for limiting the number of licences in the Spectrum Bands.
1.8 Ofcom will consider any comments it receives on the draft auction regulations before finalising them. The regulations will then be made to allow Ofcom to hold the auction. Before the auction is held Ofcom expects to hold a further seminar, in particular on the rules for the auction.
Detailed summary of Ofcom’s proposals
1.9 The table below sets out in summary form Ofcom’s proposals for this award.
Table 1 – Summary of Ofcom’s proposals
|Spectrum Packaging||Ofcom's proposals|
|Number of licences||There will be one licence of 2x4 MHz awarded for use within the United Kingdom (this excludes the Isle of Man and the Channel Islands).|
|Wireless Telegraphy rights and obligations||Ofcom’s proposals|
|Maximum permissible EIRP|| In the 872-876 MHz band, the maximum EIRP shall not exceed 33 dBm.
In the 917-921 MHz band, the maximum EIRP shall not exceed 56 dBm subject to the additional conditions set out at paragraphs 6.2.
|Out-of-band emissions||Out-of-band emissions shall be no more than the maximum levels set out at paragraphs 6.8.|
|Co-ordination|| Separation distances from railway tracks within the potential scope of the GSM-R system for any base station operating at 917-921 MHz
Some co-ordination may also be required with MoD use at 915-917 MHz and 921-925 MHz.
|Duplex arrangement|| In order to protect adjacent users from the risk of harmful interference, a duplex arrangement will be required:
|Licence term||The licence will have an indefinite duration, with an initial term of 15 years during which Ofcom's powers to revoke will be limited. Ofcom will have the power to revoke for spectrum management reasons on no less than 5 years' notice after the initial period, which could lead to the licence being terminated the day after the expiry of the 15 year initial period or any time thereafter.|
|Licence fees||The auction will determine the fee payable for the licence. After the expiry of the initial period, if the licensee continues to hold the licence, there may be additional spectrum charges in line with Ofcom's policy on spectrum pricing at that time.|
|Spectrum trading||The licence will be tradable from issue. All types of trade - partial or total; concurrent or outright - will be permitted.|
|Award Mechanism and Rules||Ofcom's proposals|
|Auction format||The auction format will be a single round sealed bid.|
|Determining the successful bidder||The winning bidder will be the one that submits the highest bid.|
|Pricing rule||The winning bidder will pay the amount of the second highest bid made for the licence, or the minimum price if there is no other valid bid.|
|Transparency||There will be an application process for participation in the auction. The identities of the applicants will not be made public.|
|Prohibitions on bidder association and collusion||There will be specific rules to prohibit collusion but no rule limiting bidder association.|
|Minimum price||A minimum price of £50,000 will be set for the licence.|
|Deposits|| An initial deposit of 50% of the minimum price will be required on application in the award process.
Each bidder will be required to submit a further deposit at the same time as its bid. That further deposit must be such that the total amount in deposit at the time of bidding is equal to 50% of the bid made.
|Payment terms||The winning bidder will be required to pay 100% of the fee by the date set in the Regulations, before the licence is issued.|
|Unsold licence||If the licence remains unsold, either through absence of bids or default, Ofcom will reconsider its approach to release of the spectrum, and will determine what course of action it considers appropriate at that time.|
Question: Do stakeholders agree with these proposals for the award of these frequencies or have any other comments on the contents of this document?
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