Spectrum licensing: local and private networks

Licensing for local and private networks

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Different from previous mobile technology generations, the fifth generation (5G) presents opportunities often discussed in terms of the new use cases and applications they enable. This is especially true for 5G usage scenarios for industrial applications, which require high bandwidth and low latency over a small coverage area. In 2023, ITU‑R published a Report on “Applications of the terrestrial component of International Mobile Telecommunications for specific societal, industrial and other usages” (ITU-R 2023) that provides an overall description of the current applications. Some regulators considered offering spectrum to non-traditional players for private networks in order to support localized 5G applications. Proponents of this approach cite many benefits in terms of network management and customization, however, traditional telecommunications operators pointed out some of the risks to this licensing approach (GSMA 2020). The sixth-generation mobile technology (6G) is intended to expand upon 5G capabilities and use cases, likely driving further innovation and demand for local and private networks.

After weighing the relevant arguments, many regulators have deemed the potential benefits to justify the provision of spectrum licenses for local private networks. This approach seeks to encourage the deployment of industrial 4G and 5G use cases while national 5G networks are being deployed at a more measured pace. Many regulators are issuing these licenses on a first-come, first-served basis where possible, which is aligned with policy goals to promote access to spectrum for quick deployment and adoption of new 5G applications. For example, Germany has been a proponent of local licensing and provides some information on how licenses have been assigned for local private networks to support 5G applications.

Case study: 5G local licensing in Germany

Source: Germany, BNetzA 2019a; Photo by Unknown Author is licensed under CC BY-NC.

Germany is one of the frontrunners in 5G local network licensing, which plays a key role in the country’s larger 5G strategy for industrial applications. The government has several initiatives to support the development of the “Industry 4.0”, which aims to develop innovative uses of digital technologies in industry. In particular, the PAiCE technology programme funds industrial pilots using innovative digital technologies and the 5G Campus network guidelines for small and medium-sized enterprises (SMEs) provided guidance for SMEs on how to construct and operate 5G local campus networks (Germany, BMWI 2020a; Germany, BMWI 2020b). They aimed to help develop industrial 5G capacity and prepare for local private 5G networks. Integral to the successful development of the “Industry 4.0” is the Bundesnetzagentur’s (BNetzA) actions to released spectrum for local licensing in the 3.7-3.8 GHz band and the 26 GHz band.

The use of the 3.7-3.8 GHz band for industrial applications

In November 2019, Germany opened 100 MHz in the 3.7-3.8 GHz band for 5G local spectrum licenses (Germany, BNetzA 2020). Interested applicants could apply for up to 100 MHz of spectrum, in 10 MHz blocks, using time division duplex (TDD) for use in a defined coverage area. Applications had to include plans that demonstrate that the spectrum requested would be used efficiently to ensure effective use. Licenses could be granted for up to 10 years, with the possibility of renewal until December 2040 at the latest. Users must ensure interference-free use, including by coordinating with other geographically near local users and protecting existing users in the band (e.g., FSS earth stations). The spectrum must be used within one year of assignment and any transfers must be approved by BNetzA (Germany, BNetzA 2019b).

BNetzA has endeavored to make the local licenses available to a wide audience and has set broad eligibility requirements and annual fees tied to criteria of use. Annual fees for the use of the spectrum apply and are calculated according to the amount of bandwidth, the size and location of the coverage area requested, and the duration of the spectrum license (Germany, BNetzA 2020; Germany, BNetzA 2019b). Frequency fees are calculated according to the formula: where B stands for bandwidth in MHz (between 10 -100 MHz), t is the license term in years, and a is the area in km² , differentiated between traffic area a₁ , and all other areas a₂. Areas classified as a₂ are priced lower to encourage efficient frequency use in rural and less populated areas.

Applications can be submitted at any time and are being processed on a rolling basis, according to existing usage and availability of spectrum requested. Under BNetzA’s rules, information on local spectrum licenses will be made available to parties with a legitimate need to access license details, such as for coordination purposes (Germany, BNetzA 2019b). Several industrial players have already applied for local licenses, including Bosch, Siemens, BMW, Volkswagen, BASE SE, and Deutsche Lufthansa (Bosch 2020; Siemens 2020; Stupp 2020). As of November 2024, BNetzA has awarded 431 licenses for local use in the 3.7-3.8 GHz band (BNetzA 2024a). The sectors responsible for the highest proportion of 3.7-3.8 GHz local licences are i) research and development; ii) telecommunications, information technology, and services; and iii) metal and electronics.

The use of the 26 GHz frequency band for industrial applications

In 2021, BNetzA began accepting applications for the use of the 26 GHz frequency band for local private networks (Germany, BNetzA 2021a). Applicants must affirm that they will pay all applicable fees and that they have sufficient financial resources for network construction, expansion, and operation (BNetzA 2021b). In addition, applicants must affirm that they have not been subject to administrative actions related to non-fulfilment of telecommunications license or spectrum assignment obligations.

According to the administrative rules governing 26 GHz local broadband assignments, users must operate on a non-interference basis and protect existing services in the 26 GHz band (BNetzA 2023a). Spectrum will be assigned in blocks with multiples of 200 MHz, although blocks in multiples of 50 MHz to 150 MHz will be assigned for individual cases requiring less bandwidth. BNetZA will consider the added complexity of coexistence with existing services during the assignment process, noting that indoor-only local assignments will have a lower risk of interference with existing services. A license will only be assigned if use would not cause harmful interference, and license terms may stipulate conditions to protect existing users.

The framework does not set an upper limit on the amount of spectrum that may be awarded, but assumes that applicants will not request more than 800 MHz due to the parameters of equipment available at the time. However, the regulator requires a more detailed reasoning in support of the application as the amount of spectrum requested increases. In addition, BNetzA does not set an upper limit on the geographic area for which a spectrum assignment may be requested. However, the application must demonstrate that the spectrum across the entire area covered by the assignment will be used within one year.

The rules governing the assignment of 26 GHz local licences also notes that BNetzA will assign spectrum for a limited amount of time with the possibility of extension, while noting that no assignments will extend beyond December 31, 2040, allowing the regulator an opportunity to reconsider the use of spectrum in this band beginning in 2041.

Similar to the fee formula for 3.7-3.8 GHz local licences, annual fees for the use of 26 GHz spectrum apply and are calculated according to the amount of bandwidth, the size and location of the coverage area requested, and the duration of the spectrum licence (Germany, BNetzA 2023b). Frequency fees are calculated according to the formula: where B stands for bandwidth in MHz (minimum 50 MHz), t is the licence term in years, and a is the area in km² , differentiated between traffic area a₁ , and all other areas a₂. Areas classified as a₂ are priced lower to encourage efficient frequency use in rural and less populated areas.

As of November 2024, BNetzA has awarded 24 licenses for local use in the 26 GHz band (BNetzA 2024b), including to entities that operate in the defence, telecommunications, industrial automation, and academic sectors.

This case study provides an example of local licensing for private networks in both mid-band and mmWave spectrum.

References

Bosch. 2019. “Bosch applies for local 5G licenses”. [Press release]. November 21. https://www.bosch-presse.de/pressportal/de/en/bosch-applies-for-local-5g-licenses-203328.html.

Germany. Bundesnetzagentur (BNetzA). 2024a. Overview of allotment holders for Frequency allocations for local frequency usage in Frequency range 3,700-3,800 MHz. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/Zuteilungsinhaber3,7GHz.pdf?__blob=publicationFile&v=13.

Germany. Bundesnetzagentur (BNetzA). 2024b. Overview of allotment holders for Frequency allocations for local frequency usage in Frequency range 24,250-27,500 MHz. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/Zuteilungsinhaber26GHz.pdf?__blob=publicationFile&v=13Germany. Bundesnetzagentur (BNetzA). 2020. “Regional and local networks”. https://www.bundesnetzagentur.de/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OeffentlicheNetze/LokaleNetze/lokalenetze-node.html.

Germany. Bundesnetzagentur (BNetzA). 2023a. Administrative rules for spectrum assignments for local broadband spectrum usages in the 24.25-27.5 GHz band. Berlin: BNetzA. https://www.bundesnetzagentur.de/SharedDocs/Downloads/EN/Areas/Telecommunications/Companies/TelecomRegulation/FrequencyManagement/FrequencyAssignment/LocalBroadband26GHz.pdf?__blob=publicationFile&v=1.

Germany. Bundesnetzagentur (BNetzA). 2023b. Appendix 5: Explanations of the fee calculations. Berlin: BNetzA. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/Geb%C3%BChrenfaktoren26GHz_pdf.pdf?__blob=publicationFile&v=1.

Germany. Bundesnetzagentur (BNetzA). 2021a. Application forms for local, broadband frequency usage. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/Antragsformbl%C3%A4tter26GHz_zip.zip?__blob=publicationFile&v=1.

Germany. Bundesnetzagentur (BNetzA). 2021b. Annex 6a: Declaration of expertise, capability and reliability (FaLeiZu) pursuant to § 91 para. 4 sentence 3 Telecommunications Act (TKG). Berlin: BNetzA. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/Antragsformbl%C3%A4tter26GHz_zip.zip?__blob=publicationFile&v=1.

Germany. Bundesnetzagentur (BNetzA). 2019. “Application process for local 5G campus networks started”. [Press release]. November 21. https://www.bundesnetzagentur.de/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Breitband/MobilesBreitband/Frequenzauktion/2019/Auktion2019.html?nn=268128 (a)

Germany. Bundesnetzagentur (BNetzA). 2019. “Administrative regulation for frequency assignments for local frequency use in the frequency range 3700-3800 MHz”. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/20191119_Verwaltungsvorschrift3.7-3.8GHz_pdf.pdf?__blob=publicationFile&v=2 (b)

Germany. Bundesnetzagentur (BNetzA). 2019. “Drafting the basic framework for 5G applications in the 26 GHz range (24.25-27.5 GHz)”. https://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unternehmen_Institutionen/Frequenzen/OffentlicheNetze/LokaleNetze/20191220_EntwurfGrundlegendeRahmenbedingen26GHz.pdf?__blob=publicationFile&v=3 (c)

Germany. Federal Ministry for Economic Affairs and Energy (BMWI). 2020. “PAiCE – Platforms/Additive Manufacturing/Imaging/Communication/Engineering”. [online]. https://www.digitale-technologien.de/DT/Navigation/EN/Foerderprogramme/PAiCE/Programm/programm.html. (a)

Germany. Federal Ministry for Economic Affairs and Energy (BMWI). 2020. “Guideline 5G campus networks – orientation guide for small and medium-sized companies”. [Report]. https://www.bmwi.de/Redaktion/DE/Publikationen/Digitale-Welt/leitfaden-5G-campusnetze-orientierungshilfe-fuer-kleine-und-mittelstaendische-unternehmen.html. (b)

GSMA. 2020. Mobile Networks for Industry Verticals: Spectrum Best Practice. [Report]. https://www.gsma.com/spectrum/wp-content/uploads/2020/05/Mobile-Networks-for-Industry-Verticals.pdf.

International Telecommuncation Union (ITU). 2023. Report ITU-R M.2527 on “Applications of the terrestrial component of International Mobile Telecommunications for specific societal, industrial and other usages” (ITU-R 2023) https://www.itu.int/pub/R-REP-M.2527.

Siemens. 2019. “Siemens and Qualcomm Technologies set up the first private standalone 5G network in an industrial environment”. [Press release]. November 26. https://press.siemens.com/global/en/pressrelease/siemens-and-qualcomm-set-first-private-standalone-5g-network-industrial-environment.

Stupp, C. 2020. “German industrial firms plan to build private 5G networks”. Wall Street Journal (WSJ). April 6. https://www.wsj.com/articles/german-industrial-firms-plan-to-build-private-5g-networks-11586191739.