Radio Spectrum Management

Spectrum Pricing

As demand for radio spectrum continues to increase, the effective management of this resource is critical in ensuring that the maximum value can be extracted from it. Traditionally, such management largely relied on age-old engineering principles to manage and control interference between users, assigning frequencies on solid and proven technical bases. However, with the rapid growth in demand for the radio spectrum, and the burgeoning number of different wireless technologies vying for access, alternative mechanisms for managing the spectrum are being introduced. By far the most common technique that regulators and administrations are turning to, to better maximise the efficiency of spectrum allocation and assignment, is spectrum pricing.

Spectrum pricing is a technique which aims to ensure that the value of the radio spectrum is reflected in the fees that licensees pay for access to it, and there are three fundamental ways in which this is done:

Administrative Incentive Pricing (AIP) - a licence fee based on the calculated cost to the spectrum user of employing an alternative solution or of being denied access to radio spectrum altogether;
Beauty Parades or Comparative Selection - licences priced at a fixed level (possibly on the basis of AIP) but assigned to the user or use which scores highest against pre-set criteria (such as rural coverage or the speed of roll-out, etc.);
Spectrum Auctions - fully market-based techniques whereby spectrum is auctioned to the highest bidder (or some combination of highest priced bids).

In each case, the aim is to change radio users' behaviour towards the use of the spectrum, to try and ensure that the maximum (social, economic or technical) benefit is accrued.

Establishing spectrum pricing regimes is not straightforward. Often Government policy objectives serve to restrict the extent to which the various techniques can be applied. In addition, identifying the parameters which underlie any chosen technique requires careful balancing of regulatory, policy, technical and economic factors.

InterConnect Communications has developed, established and implemented spectrum pricing regimes from scratch in a number of countries, each with their own unique parameters and restrictions. We have also worked with some at the leading edge of spectrum pricing, helping to enhance well-established systems. Assignments include:

Proposing a pricing policy and pricing methodology for a leading Gulf States economy;
Reviewing the existing spectrum pricing methodology and fees schedule in a South Asian country and making recommendations for revisions;
Recommending a new spectrum pricing framework for another South Asian government;
Undertaking a strategic review of spectrum management for a South-East Asian regulator, including assessing current spectrum pricing and providing advice on transitioning to a more forward-looking framework.

Key Service Areas:

Spectrum Management Policy

28 Feb 2008InterConnect News

Spectrum Master Class

The first Spectrum Master Class of 2008 will take place on 14 - 18 July 2008.

More Information?

For more information about InterConnect's Spectrum services, please contact Phil Harris by phone on +44 (0) 1291 638400.