Innovative approaches to sector regulation

Innovative spectrum use rules

Simply applying existing – and potentially outdated – regulation to new digital technologies and services risks stifling innovation. To better keep pace with technological developments, policy-makers are examining different measures to provide clear, flexible, and objectively applied rules that avoid hampering progress. Among the increasing trends toward light-touch and experimental regulatory models are innovative ways to use spectrum, license new technologies, and facilitate universal access.

As new wireless technologies enter the field with existing services, there is an ever-increasing demand for spectrum, including for commercial 5G, satellite services, and fixed wireless, as well as increased spectrum needs for government use. Policy-makers are taking advantage of the increased spectral efficiency of advanced technologies to establish flexible frameworks that maximize the use of scarce spectrum resources. This section briefly describes some of these creative approaches, including spectrum sharing, unlicensed spectrum, and private-use licences for the Internet of Things (IoT).^[1]

Spectrum sharing

More traditional spectrum licensing authorizes the use of specific bands on an exclusive basis only under a command-and-control spectrum management regime. With more advanced technologies and increasing demand for scarce spectrum resources, countries are increasingly adopting spectrum sharing rules to complement exclusive licensing. Spectrum sharing rules enable multiple users of different applications and/or technologies to simultaneously use the same frequencies while minimizing interference among the various users (Sayed 2019). To manage interference, spectrum sharing rules may include technical or operational restrictions on one or all parties, but can be worthwhile in order to optimize spectrum utilization.

Spectrum sharing in South Africa

Source: ICASA.

Unlicensed spectrum

Under unlicensed or licence-exempt frameworks, users are authorized to operate devices in specified frequency ranges without obtaining authorization. Unlicensed spectrum enables easy access to spectrum for new and varied uses, but presents challenges in terms of managing interference (Bedi 2018). For decades, unlicensed spectrum in the 2.4 GHz and 5 GHz bands has been instrumental to the success of many consumer devices, particularly Wi-Fi.

More recently, MNOs have begun using unlicensed spectrum to deliver LTE services under various frameworks that involve combining licensed and unlicensed bands. In 2017, for example, Zain Saudi Arabia completed the first trial in the Middle East of LTE-Unlicensed (LTE-U). In the trial, Zain combined unlicensed spectrum in the 5 GHz band with its exclusive licence in the 1800 MHz band to deliver download speeds of up to 223 Mbps. In October 2019, Zain commercially launched its LTE-U service with the first phase rolling out in 20 cities across Saudi Arabia with a gradual expansion to cover 26 cities using 2 600 towers.

Private uses for the IoT

Countries are increasingly licensing spectrum for private use – separate from the public Internet. The licensing process is simplified and often targeted to enable spectrum access to non-telecommunication entities by authorizing local network use for specific industrial or institutional functions, such as mining, transportation, or health care. A key benefit of private spectrum use is that it supports the IoT for a range of sectors with relatively low risk of interference because of its localized use, although it may limit the availability of 5G spectrum for wider commercial use.

In Germany, the ICT regulator, Bundesnetzagentur (BNetzA), published a framework for licensing private local networks in the 3.7-3.8 GHz band. These licences authorize companies to set up their own 5G networks for their own use, enabling non-telecommunication businesses to self-supply rather than rely on telecommunication providers. The private licences are subject to reduced fees to make them more financially viable for small- and medium-sized enterprises. BNetzA is also considering allowing the use of the 26 GHz band for local private networks.^[2]

Similarly, in February 2020 Finland held a consultation on proposals to reserve 850 MHz of spectrum in the 24.25-25.1 GHz band for the construction of local networks for ports and industrial facilities that non-telecommunication companies could use for remote control, robotization, and sensor data collection, among other uses.

Creative licensing models

Governments are adopting new licensing models as another regulatory innovation to promote deployment of emerging technologies and encourage market players, including from outside traditional telecommunication operators, to test and develop services. These models include the “regulatory sandbox” and streamlining of demonstration or trial licences.

Evolved from the fintech industry, regulatory sandboxes in the telecommunication sector enable technologies and business models to be tested for a specified period. Sandbox licensees generally are not subject to the full regulatory regime, but may receive more regulatory guidance than standard licensees. The flexibility of such an approach may also prove valuable in times of crisis as temporary measures to test innovative solutions to ensure connectivity. Regulators may also reduce or eliminate fees to further encourage players. Examples of this approach include Colombia, France, and Thailand.

Elements of the regulatory sandbox model in Colombia, France, and Thailand

Sources: CRC 2020, ARCEP 2020, NBTC 2019.

During the COVID-19 crisis, several countries decided to assign high-demand mobile spectrum on a temporary basis to ensure that network operators can meet increased spectrum demands and minimize network congestion and failures, including Ghana, Ireland, Panama, and South Africa.

Temporary awards of spectrum to address COVID-19 in Ghana, Ireland, Panama, and South Africa

Sources: ASEP 2020, ComReg 2020, ICASA 2020, TeleGeography 2020.

Creative Mechanisms to Facilitate Universal Access

Over 110 countries worldwide have universal access and service (UAS) policies in place (Broadband Commission 2019). To achieve these policies goals, many governments have established and continue to use conventional universal access and service funds (UASFs), along with other financing mechanisms, to implement universal service programmes. However, because of difficulties with accountability or oversight in implementing UASFs in many countries, other financial mechanisms may be preferred, such as pay-or-play arrangements or smart subsidies.

Thus, legacy UASF-based initiatives may be supplemented or replaced with market-based solutions, such as in-kind contributions, to promote demand and reduce operator costs. For example, winning bidders from Germany’s 5G auction held in 2019 must comply with extensive coverage obligations, including a requirement to set up 500 base stations in unserved rural areas, called white spots. Licensees must build out the base stations to white spot areas by the end of 2022.

As noted in the Broadband Commission’s State of Broadband 2019 report, other alternatives to UASFs for helping to achieve universal access targets for broadband connectivity may focus less on Internet access to homes and more on providing free Internet access in public spaces, such as libraries, community centres, and parks. These public access facilities complement household broadband access to help ensure that lower-income individuals can still participate online even if they otherwise could not afford Internet services or devices (Broadband Commission 2019).

The concept of universal access is also shifting to a broader idea of “meaningful universal connectivity” that focuses not only on expanding broadband access, but to ensure that it is affordable, safe, trusted, and empowering users to create positive outcomes. This entails moving beyond broadband targets focused solely on how many people lack broadband access and instead examine whether individuals are engaging the digital economy in a meaningful and positive way.^[3]

References

Bedi, Iqbal. 2018. Setting the Scene for 5G: Opportunities and Challenges. Discussion Paper. Geneva: International Telecommunication Union. https://www.itu.int/en/ITU-D/Conferences/GSR/Documents/GSR2018/documents/DiscussionPaper_Setting%20the%20scene%20for%205G_GSR18.pdf.

Broadband Commission for Sustainable Development. 2019. The State of Broadband: Broadband as a Foundation for Sustainable Development. Geneva: International Telecommunication Union and United Nations Educational, Scientific and Cultural Organization. https://www.itu.int/dms_pub/itu-s/opb/pol/S-POL-BROADBAND.20-2019-PDF-E.pdf.

Sayed, Tamer. 2019. “Spectrum Management: Strategic Planning and Policies for Wireless Innovation”. Presentation at ITU-D meeting on Spectrum Management: Strategic Planning and Policies for Wireless Innovation, Algeria, December 1-5, https://www.itu.int/en/ITU-D/Regional-Presence/ArabStates/Documents/events/2019/SPP4WI/Session%2013%20Spectrum%20policies%20for%20wireless%20Innovation%20Spectrum%20and%20infrastructure%20sharing.pdf.

1. See Digital Regulation Handbook Chapter 6 on “Spectrum management” and Chapter 7 on “Regulatory responses to evolving technologies,” which detail these and other spectrum matters. ↑
2. See Digital Regulation Handbook Chapter 6 for more details. ↑
3. See Digital Regulation Handbook Chapter 3 on “Access for all,” which analyses trends and best practices to connect the unconnected. ↑