Assessment of market demand for spectrum allocated to the public sector

Plum worked with the Shareholder Executive (BIS) to develop a view of commercial demand for public sector spectrum.

Spectrum is a valuable input to the production of numerous services with social and economic value. The 2005 Cave Audit found that there was considerable potential to reallocate spectrum from public sector use to commercial use in numerous frequency bands, and thereby deliver net economic and social benefit. The Spending Review (October 2010) announced, in relation to asset sales, that “at least 500MHz of public sector spectrum below 5GHz will be released over the next ten years for new mobile communication uses, including mobile broadband.”

This study provides a high level view on the likely commercial demand for frequency bands held by the public sector. The main focus is the demand for frequency bands up to 5 GHz over the next 10 years. These frequencies are the most highly demanded because they support both fixed and mobile applications. Technical-economic design constraints mean that mobile services (as opposed to wireless access and nomadic services) do not at present operate above 4 GHz. In this study, market demand for frequency ranges above 5 GHz was also captured (e.g. additional demand for spectrum for WiFi in the 5-6 GHz range, fixed links in the 10 GHz range).

The main findings in this report are as follows:

  • To ensure economic or commercial value any spectrum identified for release by the public sector must be harmonised
  • The requirement for harmonisation means that it can take up to 10 years to go from the time a possible demand is identified to releasing spectrum ready for commercial use.
  • The main commercial demand for spectrum that may be released by the public sector is for mobile broadband services. These services require large contiguous blocks of spectrum that are harmonised and are below 4 GHz.
  • For some economically valuable applications that require only small amounts of spectrum or involve local and/or intermittent frequency use co-existence and sharing may be an option.
  • Spectrum release in itself could stimulate demand from enhancements to the quality of existing services and innovative applications not yet envisaged. Supply should therefore lead demand and reallocation should be assessed in terms of anticipated value in public versus commercial use rather than on the basis of current or anticipated “demand”.

BIS published the resulting public sector spectrum plan as part of the package of measures accompanying the 2011 budget.