Ofcom’s Mobile Spectrum Innovation Gap

Ofcom’s Mobile Spectrum Innovation Gap

It was not meant to be. A well respected Cambridge entrepreneurial innovator had a dream of Ofcom taking one of the 2.4 GHz channels to be auctioned for general mobile network use and instead making it widely available for a new generation of low power indoor femto-cells – the long term direction of a super high speed mobile Internet. The focus was on an opportunity for start-up high tech companies. Unfortunately it fell into a particular innovation trap. Ofcom is an evidence based Regulator and by definition something for start-up companies can never see those companies (yet to exist for the most part) bringing evidence to Ofcom. Reluctantly Ofcom felt unable to take this proposal forward. It is a good time to question whether this is part of a growing gap between Ofcom’s spectrum policy and spectrum related innovation?

Up until around 2000 there was a strong link between spectrum and innovation held together by the engagement of Government in both innovation, spectrum and competition policy. Over several decades spectrum was sometimes identified ahead of the game and then reserved for several years. This proved to be a very powerful driver of new innovation (eg GSM). Other times a more “just in time” approach has been used. This was the case for Digital Terrestrial TV (Freeview).

When Ofcom took over spectrum and competition policy they came out with new vision of how spectrum would be found for innovation. It was called “spectrum trading”. It would began with Ofcom releasing all the spectrum they could (nothing held in reserve). Companies with innovative ideas would no longer have to wait for Ofcom to find spectrum. Instead they could buy it in the market from those who had spare spectrum. The theory was that companies with spare spectrum will be only too happy to turn unused spectrum assets back into cash.

What has become clear from the delays and judicial review over the past 3 years is that the mobile network operators have showed absolutely no intention of letting any of their spectrum go…voluntarily. The reason is clear. Network competition is squeezing them very hard and they fear that any “spare” spectrum will eventually find its way to deliver further competitive damage.

Here is the irony: Ofcom’s current competition policy is to sustain this intensity of network competition. But under these condition mobile network operators will not let go of any of their spectrum. This leaves spectrum trading, as a means of delivering internationally harmonised spectrum for future mobile innovation, dead in the water…killed off by the success of Ofcom’s network competition policy.

What is the result of all this? At the big ticket level, the spectrum for 4G (LTE), far from coming on stream “just in time” or even ahead of the game, it is coming far too late. At the other end of the scale we see that the 2.5 GHz initiative to help small start up companies is simply not matched to the Ofcom evidence driven policy framework. “Evidence” and “speculative risk” pull in opposite directions.

Had there been government engagement in support of innovation Ofcom may have been able to lay-off the risk for the low power 2.4 GHz channel initiative…perhaps even holding this one channel in reserve to stimulate innovation. But the Government has lost touch with this area ever since responsibility for spectrum moved from BIS to DCMS but responsibility for innovation remained with BIS. As so often when everyone is responsible for something – it finishes up with nobody being responsible.

My experience in these sorts of situations is that it never pays to try to change anything going on in the near term. There is too much luggage…too many vested interests. One has to look sufficiently far ahead where everyone can look at things afresh. Fortunately innovation lead times take us into this creative space. The key to the UK getting itself back into a leading position for radio innovation is just how quickly an engagement can be forged between Government, Ofcom and the Industry to focus on this white sheet of paper and start to fill it with a new beginning of spectrum driven innovation policy.

 

Comments are closed.