# EUR-Lex - 52012DC0478 - EN

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# 52012DC0478

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Promoting the shared use of radio spectrum resources in the internal market /* COM/2012/0478 final */**

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COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Promoting the shared use of radio spectrum
resources in the internal market

(Text with EEA relevance)

1.           Introduction

The European Union is facing exponential
growth in wireless data traffic. Wireless connectivity is becoming increasingly
important in the economy. Industry sources predict that
global mobile data traffic will increase 26 % annually by 2015. By then,
there will be 7.1 billion phones, tablets and other mobile devices that can connect
to the Internet. Wireless broadband has become a ubiquitous internet access
medium for citizens in Europe, and mobile network operators will have to meet
growing user demand. Many other economic sectors beyond electronic
communications should also benefit from wireless innovations and high-speed
data applications that can improve productivity and ensure sustainable growth.

Meeting growing spectrum
needs for wireless connectivity is constrained by lack of vacant spectrum and
by the high price associated with re-allocating spectrum to new uses, in terms of
cost, delays and the occasional need to switch off incumbent users. To satisfy growing
demand, more efficient use and innovation are crucial. Within the next decade,
technological progress may enable an increasing number of users to share simultaneous
rights of access to a specific frequency band. However, the regulatory
environment must allow this to happen.

Shared use of spectrum involves different
users all enjoying the right to use a given frequency band in a variety of
different relationships. This in effect makes additional spectrum resources available
and lowers spectrum access hurdles for new users. A study conducted for the
Commission shows that finding additional shared spectrum resources for wireless
broadband could create significant net economic benefits for the EU. With an
increase of between 200 to 400 MHz in shared access spectrum for wireless
broadband, the scenarios evaluated in the study show a net increase in the
value to the European economy of the order of several hundred billion Euros by 2020[1].

As spectrum management is an essential
pre-requisite for the digital single market, this initiative therefore
contributes directly to meeting the objectives of the Europe 2020 strategy and,
when implemented, could contribute to reinforcing the European economy. Reaping
the full benefits of sharing spectrum requires not just the removal of current regulatory
barriers to deploying innovative radio access technologies, but also the active
facilitation of sharing. In line with the Radio Spectrum Policy Programme
(RSPP)[2],
the Commission therefore seeks the broadest possible political endorsement of
the proposed steps to foster the development of wireless innovations in the EU
to ensure that the currently allocated spectrum is exploited to the fullest
extent possible.

This Communication lays out the regulatory
background, the drivers and enablers, and the challenges for more shared use of
spectrum. Section 5 describes the proposed new approach to give incentives for
and legal certainty to spectrum sharing. Section 6 proposes next steps to
foster the shared use of spectrum in the internal market in unlicensed and licensed
bands.

2.           Regulatory
background

The EU regulatory framework for electronic
communications[3] seeks to facilitate access to spectrum, based on the least onerous
authorisation system possible. It favours the use of general authorisations, except
where individual licences are clearly necessary, e.g. to ensure protection
against harmful interference. It establishes the principles of efficient use
and effective management of spectrum, as well as technology and service
neutrality. The RSPP extends these principles to all relevant EU policy areas[4]. To enhance efficiency and flexibility, it requires Member States,
in cooperation with the Commission, to foster, where appropriate, the
collective use and shared use of spectrum[5].

Corresponding to the Union policy objective
of allocating sufficient and appropriate spectrum in a timely manner and to
best meet the increasing demand for wireless broadband, the RSPP aims to
identify at least 1200 MHz by 2015 as well as to facilitate access to spectrum
through general authorisations[6]. Spectrum sharing approaches, e.g. radio local area networks
(RLANs), small cell base stations and mesh networks are explicitly referred to[7]. The RSPP also requires the Commission, in cooperation with Member
States, to assess the possibility of extending the allocation of unlicensed
spectrum for wireless access systems[8]. Meeting
these objectives requires solutions adapted to the different authorisation situations.
In addition to licence-exempt bands and exclusively licensed bands, there are
also bands where a number of users have licences, i.e. where the rights of use
are not exclusive.

Finally, the RSPP establishes a spectrum
inventory inter alia to identify spectrum-sharing opportunities[9]. In implementing these actions, the Commission shall ensure that
the rights enshrined in the EU Charter of Fundamental Rights are respected[10].

3.           Drivers and enablers for
the shared use of spectrum

The shared use of spectrum refers to
situations in which a number of independent users and/or devices are allowed to
access the same range of frequencies under certain conditions. As illustrated
by the following three examples, stakeholders are increasingly turning to
emerging sharing possibilities to meet growing demands for wireless
connectivity. To maximise the benefits of efficient spectrum use, it is necessary
to support this trend, while ensuring that there is no deterioration in the
quality of services provided.

3.1.        Wireless
broadband

Wi-Fi networks are the best known examples of
how European citizens and businesses currently share spectrum. Operating in
harmonised bands for RLAN[11],
wireless broadband infrastructures based on Wi-Fi technologies already support
affordable and easily accessible internet connections in some Member States.
This stimulates the development of online services to realise the growth
potential and development of new and innovative business solutions in Europe[12].

More than half of all smartphone traffic
appears to be routed over Wi-Fi networks, and this nomadic traffic is growing
4-6 times faster than mobile traffic. Global sales of Wi-Fi-enabled equipment
should have reached 3.5 billion units by 2014[13].
Mobile network operators are also relying on the same licence-exempt RLAN
frequencies for data off-loading to increase network capacity, improve coverage
in buildings and save costs.

Operators who have exclusive licences can also
increase efficiencies in their respective mobile networks with the common use
of frequencies in specific geographical areas. In 2011, the Radio Spectrum
Policy Group (RSPG) concluded that spectrum sharing could promote more
efficient use of resources, provided that competition implications are
carefully considered and that the necessary sharing agreements are allowed in
all Member States[14].

Shared use
of licensed or licence-exempt wireless broadband frequencies enables cost
savings for mobile network operators, affordable internet connectivity and
infrastructure sharing possibilities.

3.2.        The
wireless-connected society

Growing wireless connectivity needs emerge
not just from wireless broadband but also from applications e.g. smart
meters/grids or machine-to-machine (M2M) communications. Currently, about 80 %
of new wireless technologies covered by the European Telecommunications
Standards Institute (ETSI) are developed to operate in licence-exempt shared bands[15]. Such innovations provide
benefits in numerous ways, for example through home automation applications
based on wireless sensors that can increase the sustainability of the EU
citizens' daily lives — e.g. by switching off lights when we are not at home or
regulating air-conditioning systems according to temperature.

The European Conference of Postal and
Telecommunications Administrations (CEPT) recently found that e.g. in the
harmonised 863-870 MHz licence-exempt band alone, at least 40 million wireless
devices (including remote controls, alarms and sensors) are sold annually in
Europe[16].
These so-called Short Range Devices (SRD)[17] also make businesses more
efficient by reducing costs and increasing productivity, for example with RFID
systems in logistics and retail applications.

All such Internet of Things (IoT)
applications operate in harmonised licence-exempt bands. The value of these bands
is significant, because they are freely accessible by any device that complies
with relevant spectrum access rules to avoid interference without the need to obtain
a spectrum licence.

However, SMEs and innovators, for whom such
access is especially important, also have to ensure their technologies can cope
with the potential of interference in shared bands where protection rights are
not guaranteed by a national regulatory authority (NRA). Wireless innovations
are therefore not only enablers for spectrum sharing, but also become drivers
for more shared use, as demonstrated by emerging sharing arrangements[18].

The trend
towards a connected society demonstrates the added value of low spectrum access
barriers in licence-exempt shared bands as the breeding ground for wireless
innovation that stimulates the development and deployment of more resilient wireless
technologies.

3.3.        Research
and innovative technologies

Exploiting the full benefits of spectrum
sharing requires dedicated research into dynamic spectrum access, as supported
by the 7th Framework Programme (FP7), with projects addressing technologies
that foster cognitive radio, dynamic spectrum sharing and spectrum aggregation[19]. Since the beginning of FP7,
about € 50 million have been invested under each two-year work-programme
for spectrum-related research.

These projects have led to progressive
advances. Dynamic spectrum sharing is already included in current standards for
RLANs at 5 GHz to allow sharing with radars. Cognitive radio technologies offer
services in coexistence with TV transmitters, the primary service in the UHF band,
by using location-based information to determine unused spectrum in and between
broadcasting frequency bands (so-called ‘white spaces’). Trials in Germany,
Slovakia and the UK show this approach is nearing practical deployment.

The Commission is supporting this trend by issuing
a standardisation mandate to harmonise access to location-based information for
these technologies through geo-location databases[20]. To enable the development and
use of such technologies in Europe, the mandate identifies areas where standards
are needed to foster compliance with EU and national legislation on the placing
on the market and the use of radio equipment, in particular with the R&TTE
Directive[21].

While focusing on creating economies of
scale for first deployments, the importance of using ‘white spaces’ is not
limited to a specific band. More can be done to exploit cognitive radio
technologies, for instance, by sensing other spectrum users. Research is also underway
to create self-organising networks that will aim to minimise cross-interference
between small cell base stations in future generations of wireless broadband
technology.

Research has
enabled access to spectrum to be opened up on a shared basis while ensuring that
primary services are protected. Cognitive radio technologies are developing today
with the support of mandates for harmonised standards and trials in European
research projects. More progress can be expected in the area of sensing and use
of small cell base stations.

4.           Challenges
on the path to more shared use of spectrum

As the examples in the previous section
demonstrate, the radio spectrum is an extremely valuable and finite natural
resource that can be re-used more efficiently with advances in technology. In
2011, the RSPG noted the high demand for shared use and found: ‘there is a need
to progress further on appropriate regulatory
mechanisms in regard to sharing of spectrum’[22].

The key challenge for NRAs is to find
appropriate ways to authorise shared spectrum access
to a band, i.e. to allow two or more users to use the same frequency range
under a defined sharing arrangement. To date, users sharing licence-exempt
bands, such as SRDs, have no rights to be protected against harmful interference,
while users sharing frequencies on the basis of individual licences may benefit
from regulatory guarantees in this regard. To progress further, NRAs need to address
the following challenges.

4.1.        Managing
harmful interference to remove uncertainty

Ensuring co-existence between different
applications in the same range of frequencies is essential
for exploiting sharing opportunities. Applications
should not interfere with each other to the point of degrading their functions
seriously. Acceptable levels of interference and appropriate mitigation
strategies must be defined between users or set out in regulatory conditions
for shared access to a band.

Interference mitigation can be achieved
through reliable sharing arrangements based on clear, effective sharing rules
and conditions in a band, creating certainty for both incumbent and prospective
users.

Moreover, transparent assumptions in
initial compatibility studies and clear protection rights for primary users, including
the enforcement of agreed levels of interference mitigation, are important to
increase the predictability and mutual acceptance of sharing arrangements.

4.2.        Creating
sufficient incentives and safeguards for all interested parties

Balancing the impact on the incumbent and the
usage constraints on any additional user is a challenge. While incumbents must
be reassured that additional users will abide by sharing rules, there may also
be costs for the incumbent in ensuring a good quality of service for new users,
e.g. mitigation technologies or more resilient receivers.

Sharing needs to offer advantages for all
users. Incumbent users, who are either subject to spectrum pricing or need to deploy
improved technologies to enable additional users to have access under
attractive sharing arrangements, may seek financial compensation.

It will also be necessary to ensure that sharing
arrangements between users do not adversely affect competition (in compliance
with the provisions of the Treaty[23]),
and to take into account the impact of sharing possibilities on the design of
future spectrum assignment procedures in Member States.

4.3.        Capacity of licence-exempt bands

Since users in licence-exempt bands do not
benefit from any regulatory protection regarding congestion, it is not clear whether
existing shared bands have enough capacity — e.g. can the current RLAN bands
accommodate the growth of both private broadband access and mobile data traffic
off-loading? To objectively establish congestion forecasts and improve the
reliability of sharing arrangements in these bands for all users, NRAs could
benefit from monitoring usage.

A new generation of RLAN equipment (known
as 802.11ac), expected to be on the market by the end of 2012, could approach
the user speeds of fixed line networks. While depending on existing RLAN
spectrum at 5 GHz, such developments will require very broad frequency channels
that are currently limited in number.

Given current patterns of Wi-Fi usage,
including by mobile operators for data off-loading, consideration should also be
given as to whether more unlicensed ‘fixed wireless’ spectrum should be
identified as part of the search for broadband spectrum or as a complementary
common resource.

Fostering
more shared use of spectrum requires:

-           Engaging
mutual responsibility of users over acceptable limits of interference and
appropriate mitigation strategies;

-           Providing
legal certainty on applicable rules and conditions, enforcement procedures as
well as transparency about compatibility assumptions and protection rights;

-           Incentivising
investments in improved technologies beneficial for incumbents and additional users,
while safeguarding and fostering competition;

-           Identifying
broad frequency channels for RLAN development as well as providing congestion
forecasts to increase the predictability and reliability of the most important
shared bands;

-           Ensuring
that any transition from exclusive rights of use to shared use enhances
competition from additional users and in particular does not create undue
competitive advantages for current or future right-holders.

5.           Towards
a common framework for shared spectrum access in Europe

To the extent that emerging wireless
technologies are increasingly able to ‘smartly’ cooperate with each other to
avoid mutual interference, NRAs need appropriate means to enable suitable
sharing arrangements and to foster the shared use of spectrum resources. The
Commission therefore proposes to develop two additional tools to provide more
spectrum access opportunities for innovative technologies and to incentivise
greater and more efficient use of existing spectrum resources:

(1)
An EU approach to identify beneficial sharing
opportunities in harmonised or non-harmonised bands; and

(2)
Shared spectrum access rights as regulatory tools
to authorise licensed sharing possibilities with guaranteed levels of protection
against interference.

5.1.        Identifying beneficial sharing
opportunities

Across the internal market beneficial
sharing opportunities (BSO) can be identified, in both licensed and
licence-exempt frequency bands, wherever the combined net socio-economic
benefit of multiple applications sharing a band is greater than the net
socio-economic benefit of a single application, taking into account additional
costs resulting from shared use[24].

Identifying BSOs in a specific band requires
transparency about the sharing arrangement that would be applicable, in
particular (i) the sharing conditions, i.e. the technical parameters
defined by a NRA that determine the access hierarchy in a shared band[25]; and (ii) the sharing
rules, i.e. the common usage provisions that allow sharing, which either could
be mandated by a NRA or defined by users on the basis of standards, common
protocols, or sharing agreements which comply with competition law[26].

In order to foster wireless innovation and
to stimulate the identification of BSOs, stakeholders need the possibility to apply
to the relevant NRA, based on a transparent process, for the right to use
spectrum bands on a shared basis. Any such BSO applicant would have to
demonstrate the capability to share a band without unduly compromising the
incumbent’s right to use the frequencies.

To leverage the economies of scale of the
internal market to incentivise investments, the EU needs to define a process
for identifying BSOs in order to ensure a coherent and consistent application
across all Member States when they come to address individual cases. Applied
either in harmonised or non-harmonised bands, such a process could include the
following key elements:

· A harmonised timeline;

· An opportunity for negotiation between the applicant and the incumbent,
in which the NRA would act as a mediator, to clarify the terms of the BSO,
including (i) the instruments to prevent the deterioration of quality of
service and (ii) the distribution of sharing costs (if any);

· The examination of socio-economic benefits would inter alia need to
take into account (i) the conditions under which existing assignments were
made, including costs incurred, and (ii) the legitimate expectations of the
incumbent right holders as well as BSO applicants. Also relevant are (iii) the
dynamic effects that BSOs could have on competition, as well as on investment
incentives for incumbents and potential newcomers respectively, in the context
of convergent technologies;

· The means for the NRA to approve a BSO and
to ensure greater shared use of spectrum in order to achieve the most effective
use of spectrum possible, in accordance with applicable EU and national law.
Where appropriate, and taking into account existing rights, this could include the
possibility to apply measures such as incentive fees at the level of the
identified socio-economic opportunity cost;

· The provision of information at the EU level on BSO applications and
on the outcome of the subsequent national processes, as well as the possibility
of assessing BSOs in the context of the spectrum inventory and identifying BSOs
suitable for application across the internal market.

To the
extent that technological advances enable more beneficial sharing opportunities
(BSO) in the internal market, it is necessary to promote investment and
encourage spectrum users to make better use of their spectrum assets by
defining, in close cooperation with the Member States, a process and key
criteria at EU level to identify BSOs (e.g. in a Recommendation).

5.2.        Authorising licensed
shared spectrum access

Once a BSO in a specific band is identified
and approved, it can result in a sharing dividend of additional shared
spectrum resources, if NRAs have the appropriate tools to authorise shared spectrum access. Such
authorisations should be granted in accordance with applicable EU and national
law, in particular articles 3, 5, 6, 7, 13 and 14 of the Authorisation
Directive[27]
and taking into account the existing rights of the incumbent.

To facilitate the identification of BSOs
with market-based incentives, spectrum sharing contracts could serve
as legally-binding agreements that enable incumbents and BSO applicants to
define their respective rights and obligations, i.e. sharing technologies
and/or costs. To facilitate such contracts, NRAs could be entrusted to act as
impartial technical advisers and to register the terms of such agreements. Such
contracts could be necessary to modify existing usage rights on the national
level in agreement with the incumbent.

Incumbent rights holders could benefit from
the mutual reassurance of an appropriate sharing contract by proposing BSOs, e.g.
public entities could offer access to spectrum capacities to commercial
operators in return for co-funding of network infrastructures for broadband
public protection and disaster relief (PPDR) applications.

If innovators can compare sharing opportunities
in a competitive internal market, economic incentives would encourage proposals for sharing contracts based on
innovative technologies and foster the co-existence of technology standards.

Moreover, enabling users to negotiate an appropriate degree of protection against harmful
interference and to conclude sharing contracts would make it possible to find BSOs
based on actual spectrum usage. This would be an improvement on traditional technical compatibility studies based on
statistical spectrum sharing models.

In order to provide the contracting parties
with regulatory guarantees to justify the necessary investments, NRAs would need to be able to grant shared spectrum access rights (SSAR)
based on sharing contracts that are legally binding to all users of a
particular range of frequencies.

SSARs could therefore become an additional
tool for NRAs to authorise shared spectrum access in
bands where a BSO has been identified and approved, for example, with individual licences for the additional users.

The RSPG recently highlighted that a
licensed shared access (LSA) approach would provide additional users with
spectrum access rights and guaranteed quality of service. It concluded that
this would allow ‘incumbents to continue to use the spectrum while also
providing spectrum capacities to other users’[28].

Spectrum
sharing contracts provide users with legal
certainty while creating market-based incentives, including financial
compensation, to identify more BSOs in the internal market, if NRAs grant shared spectrum access rights to additional users of a
frequency band.

6.           Next
Steps

To foster the
development of wireless innovations in the EU, it is necessary to continuously
improve the opportunities for harmonised spectrum access in both licence-exempt
bands and licensed spectrum and to establish new tools for
more shared use of radio spectrum resources in the internal market. The
Commission therefore proposes to take the following steps:

(1)       Identify BSOs in
both licensed and licence-exempt frequency bands by:

· Developing, in cooperation with Member States, a coherent and
consistent process to identify BSOs as well as criteria for assessing BSO applications
submitted at national level in accordance with applicable EU and national law and
taking into account the key elements mentioned in section 5.1;

· Using data collected through the inventory established by the RSPP;

· Enabling the development and deployment of White Space Devices based
on harmonised standards for geo-location databases to be
drawn up in response to the forthcoming Commission Mandate. The lower part of
the UHF band (in particular 470-698 MHz) should provide
a pioneer sharing opportunity paving the way for use of this approach in other
bands.

(2)       Consider making sufficient
licence-exempt spectrum, harmonised at EU level, available for wireless
innovations by:

· Ensuring predictable and reliable sharing arrangements in SRD bands,
while applying the principles of technology and service neutrality, through continued
updates of Decision 2006/771/EC;

· Studying and measuring the present capacity and potential congestion
of the 2.4 and 5 GHz bands for data off-loading;

· Depending on the outcome of technical sharing studies and of the
impact in the market, considering the designation of additional harmonised
licence-exempt spectrum for RLAN services (Wi-Fi) at 5 GHz through a revision
of Decision 2005/513/EC;

(3)       Define, in cooperation
with Member States, a common path towards enabling more sharing possibilities, based
on contractual agreements between users by:

· Recommending a common format for SSAR, a common terminology for documenting sharing conditions and sharing
rules and best practices in shared access authorisations to facilitate
contracts, including competition aspects;

· Organising a public consultation to identify user needs and best
practices for sharing contracts as well as possible standardisation needs to
support the uptake of innovative solutions;

· Developing guidelines for safeguarding efficient use of spectrum and
fostering competition based on sharing contracts between users operating in the
markets.

[1]               See: Perspectives
on the value of shared spectrum access, SCF Associates, February 2012 (SCF
2012).

[2]               Decision 243/2012/EU of 14 March 2012, OJ L 81 of
21.3.2012, p. 7; Art. 4.1.

[3]               Directive 2009/140/EC, OJ L 337, 18.12.2009,
p. 37, and Art. 5.1 and 5.2 5th par. of Directive 2002/20/EC, OJ L 108,
24.4.2002, p. 21, as amended in 2009.

[4]               RSPP Art. 2 and 3.

[5]               RSPP Art. 4.1.

[6]               RSPP Art. 3 (b) and (g).

[7]               In cellular networks (e.g. UMTS, LTE or WiMAX)
so-called pico- or femtocells are used for data off-loading within or outside
licensed frequencies, RSPP Art. 6.10.

[8]               RSPP Art. 6.7.

[9]               RSPP Art. 9.1(b).

[10]             Commission Communication ‘Strategy for the effective
application of the Charter of Fundamental Rights by the EU’ COM(2010) 573.

[11]             The 2 400-2 483.5 MHz, 5 150-5 350
MHz, and 5 470-5 725 MHz bands.

[12]             Commission Communication ‘a coherent framework for
building trust in the digital single market for e-commerce and online services’
COM(2011) 942.

[13]             SCF 2012.

[14]             RSPG11-374.

[15]             SCF 2012.

[16]             Draft ECC Report 182.

[17]             Decision 2006/771/EC.

[18]             e.g. in the bands 870-876 MHz and 915-921 MHz.

[19]             e.g. SAPHYRE, CogEU, Sacra, OneFit, Faramir, E3,
Socrates, Walter, NEWCOM++, NetWorks, Samurai, EUWB, Ucells, CROWN.

[20]             Standardisation mandate to CEN, CENELEC and ETSI for
Reconfigurable Radio Systems (RRS).

[21]             Directive 1999/5/EC, OJ L 91, 7.4.1999, p. 10.

[22]             RSPG11-392.

[23]             As further elaborated in the EU Guidelines on
horizontal cooperation agreements, OJ C 11, 14.1.2011, p. 1.

[24]             A beneficial sharing opportunity (BSO) can be
calculated based on the following formula: net benefit of application A <
(net benefit of application A+B+C ...) - (cost of sharing). Such assessment
could be done prior or after refarming a spectrum band.

[25]             i.e. whether users share a band on the basis of a
primary-secondary relationship or among equals.

[26]             Either static co-existence rules for all users
of a band or dynamic cooperation rules which determine spectrum access
for one user according to use of the same band by another user, apply.

[27]             Directive 2002/20/EC, OJ L 108, 24.4.2002, p. 21,
as amended in 2009.

[28]             RSPG11-392.