The Government's spectrum release plans that supersede the work recorded on this site are detailed in the plan to release 500MHz of spectrum, available from the .

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The Audit 2005

Publication of the Independent Audit of Spectrum Holdings Final Report

Professor Martin Cave today set out a framework for improving radio spectrum management in the public sector, delivering the of his Independent Audit of Spectrum Holdings to the Chancellor of the Exchequer.

The report makes over 50 recommendations and focuses primarily on public sector holdings, which account for about half of the total spectrum in the bands that the Audit has investigated.

The conclusions both analyse specific bands for their potential to be released or shared, and make recommendations for the establishment of a market-based spectrum management regime for public sector spectrum.

Professor Martin Cave said: “Spectrum demand is forecast to exceed supply in the medium term. This report recommends a flexible, responsive, market-based approach to meeting these needs through giving incentives to public sector spectrum users to make more efficient use of their holdings, by extending spectrum pricing, spectrum trading and admitting new sharers into public sector bands”.

Key recommendations include:

• The introduction of market mechanisms into spectrum management in the public sector. Public sector spectrum should be made tradable where possible, and public sector bodies should be able to gain financial benefit from commercial spectrum activity. Recognised Spectrum Access (RSA) should be introduced to formally recognise the spectrum usage of Crown bodies where it has previously been undefined, enabling trading. In the future the public sector should meet new spectrum demands through market mechanisms in all but exceptional cases, and such exceptions would have to meet specific criteria.
• Changes to the structure and scope of Administered Incentive Pricing (AIP) as applied to the public sector. Pricing should be introduced for the valuable radar bands, and some other aeronautical spectrum uses. A more comprehensive application of AIP across the public sector is recommended, for example extending to previously uncharged for bands used by the Ministry of Defence. AIP levels, intended to reflect the opportunity cost of spectrum use, should be revised to ensure that the charges are more consistent and better reflect the value of use.
• Proposals to encourage more and more effective bandsharing, including by incentivising the bodies managing the bands to admit more sharers and examining new technology-based opportunities for enabling sharing.
• Better information on public sector spectrum is needed. The UK Spectrum Strategy Committee should produce a Forward Look document covering current and future spectrum usage
• Just over twenty specific bands managed by the Civil Aviation Authority and the Ministry of Defence have been analysed, and given a traffic light marking representing the Audit’s view of the likely scope for either releasing spectrum to alternative use or admitting new sharers. In the majority of bands the Audit’s judgement is that there is such scope.

As set out in the Pre-Budget Report, the Government has welcomed the conclusions of the audit. The Government will work alongside Ofcom to implement the Audit's recommendations and the transition to the new approach.

NOTES FOR EDITORS

In the 2004 Pre-Budget Report, the Chancellor of the Exchequer commissioned an Independent Audit of Spectrum Holdings. The Audit focused on bands below 15GHz used by the public sector and fixed links, and concentrated on those with the most potential for alternative use. The radio spectrum is a valuable, finite resource and the public sector is the single biggest user of UK radio spectrum. Professor Martin Cave was asked to investigate whether these frequencies are being used as efficiently as possible and to review the effectiveness of incentives for making efficient use of spectrum.

The final report makes recommendations to Government and Ofcom. A Government response will be produced under the auspices of the UK Spectrum Strategy Committee (the Cabinet Committee with a public sector spectrum remit).

Professor Martin Cave is Director of the Centre for Management under Regulation at Warwick Business School. He specialises in regulatory economics, especially in the communications sector. He is the author of the Independent Review of Spectrum Management (2002), commissioned by the UK Government to investigate the changing role of regulation in spectrum.

Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. It is responsible for spectrum management issues for approximately 70% of the radio spectrum that is used by commercial organisations. In January 2005 it set out a comprehensive programme of potential spectrum awards over a number of years.

Media enquiries should be addressed to:

• Helen Watson at the Independent Audit team on (5th and 6th December only)
• Treasury Press Office,
• Ofcom Media Office,

The report and further background to the Audit can be accessed at https://spectrumaudit.org.uk. Also available on the Audit website are:

• A consultation document issued by the Audit in July 2005, and the publicly available responses to it;
• , commissioned from consultants Analysys Mason as background information for the Audit and published in September 2005;
• Two reports on opportunities for increased bandsharing commissioned from Roke Manor and QinetiQ as supporting documents