a) Do you consider that access to BWA frequencies should be restricted to certain bodies? If so, please indicate which ones, and give reasons who you consider it necessary to put such restrictions in place.
Of the responses received, the following are highlighted:
a) The position of Grupo PT is that the decision on the introduction of BWA in Portugal should take account of the following situations:
- Free access: Regime applicable to all bands which, at a European and/or national level, come to be designated as being for common use. In these bands all entities must be allowed access, without restriction, on condition that that they are committed to respecting the technical conditions and conditions of use and exploitation which have been established in each case. Grupo PT considers that this regime should be applied to the 5.8 GHz frequency band;
- Limited access: Regime applicable to all bands whose use is subject to the allocation of rights, irrespective of the form of allocation. Grupo PT considers that this regime should be applied to the 3.6 GHz frequency band.
Finally Grupo PT considers that in certain bands access should be limited, because BWA has significant potential to cause harmful interference, and that if conditions were not imposed, the regular function of other systems and services could be put at risk.
b) Onitelecom states that the undertakings to be licensed should have the technical competence for the progressive execution and continuity of their investments, with solid economic basis, in line with suitable opportunities and the existence of investment protection mechanisms (similar to what occurred with the development of GSM networks).
It is the position of this entity that access to BWA frequencies should be limited to operators who do not hold their own universal access platforms (cable and copper incumbent fixed networks) and GSM/UMTS/CDMA mobile networks, giving privilege to the development of new access platforms, to the detriment of operators who have already made their investments and would be more interested in getting profit from assets that they have already constructed in the access network.
In this context, Onitelecom concludes that the operation of these resources should be covered by operators who do not have alternative means at their disposal that allow them to offer similar services in direct form or in which they control, without resource to offers of the market, the indices of quality to be practised.
c) Emacom, Grupo SGC Telecom, Sonaecom and Vodafone, likewise stated their position in the following terms:
- Because BWA is a technology that allows the development of bit stream access networks (last mile), and because there are operators in the market in possession of other physical means for the development of these networks, such as cable and copper, priority should be given in BWA frequency access to telecommunications operators who use this technology in their core business. In this way this technology could create a competitive environment for the provision of telecommunications services (Voice, Data and Video) that would benefit the final user (Emacom);
- Wireless should not be allocated to holders of significant copper or cable infrastructure, in order to avoid the cannibalisation of its respective potential (Grupo SGC Telecom);
- Sonaecom stated that, while the copper and cable networks were under the control of one operator, it was fundamental for the development of the national market that this operator did not have access to BWA frequencies. Such an exclusion, it considers, would not be a precedent in Europe, adding that:
- In Spain, in 2000, Telefónica was excluded from the tender for the allocation of licenses for use of BWA, with basis in the fact that point-multipoint radio access constitutes an alternative to copper, coaxial cable or fibre optic connection;
- In Norway, NPT decided to exclude companies controlled by Telenor from the 3.5 GHz band frequency auctions, with basis in their respective dominant positions in the associated markets;
- In Italy, the regulator took a similar course; although not excluding the incumbent ab initio: Telecom Itália was authorised to participate in the auctions of the 210 Wireless Local Loop licenses in 2002, but was restricted in the provision of such services for the following 4 years;
- The company also added that any undertaking which, possessing copper and cable access networks and which does not make a solid commitment to separate one of these networks within a period defined by the regulator, should not be permitted to enter the tender for the licensing of these frequencies.
It further argues that privilege of access to these frequencies should be given to mobile operators because it is these undertakings that are best placed to use them efficiently and with the best results insofar as increasing competitiveness in market is concerned. However it considers that the application of a broader criteria for the allocation of licenses for these frequencies (including other undertaking that are not mobile operators), may have reflexes on the licensing conditions of 3G frequencies, insofar as it would lead to unfair completion, given the incomparability of the associated obligations;
- Vodafone considers that right of preference should be given to undertakings not Grupo PT or any other undertaking dominant in the provision of broadband services, thus contributing to the creation of solid competing offers by alternative operators.
Additionally, this company considers that the protection and creation of a competing market leads it to believe that access to BWA frequencies should not be restricted. However, such frequencies should only be conceded to undertakings that demonstrate that they are technically and financially prepared to invest in the infrastructure necessary for the establishment of a BWA network and the consequent offer of services through this system.
d) Radiomóvel, although in a more mitigated form, aligns itself with this position, affirming:
- That preference should be given to interested parties which intend to offer innovative and competitive services, and which do not have sufficient spectrum to offer such services;
- That access to BWA frequency bands should be denied to current UMTS operators, which already hold sufficient spectrum for this type of application and equivalent technology (HSDPA and, in the near future, HSUPA).
e) Neuvex, in a less restrictive posture in terms of access, considers that access to BWA frequency bands should not be restricted but that restrictions should be imposed in respect of the services that will be exploited through BWA.
f) Finally, and although not having a specific position on this issue, it is worth noting the concern of the WiMAX Forum (also mentioned by Alcatel-Lucent and by the Intel Corporation) over possible excessive spectrum fragmentation, as a result of the frequency allocation process.
b) Do you consider that BWA services should be offered nationwide or would it be more suitable to limit them geographically (in which case please give details of the geographic location(s) you consider the service should be limited to)?
Opinions were divided on this question, although there was a tendency, specifically among the manufacturers, to favour nationwide operations, a solution considered the most suitable by eight of the fourteen parties that gave a position on this issue.
Five parties manifested opinions in favour of operations with a more regional character, or at least in favour of the possibility of breaking down an operation into geographical areas, in particular:
a) Sonaecom considers that this option could constitute an opportunity, specifically by way of incentives to operators through regional weighting factors, bringing broadband services to areas where the technological and financial conditions needed to ensure the economic viability of an operation are not in place.
The operator also mentions bringing the cost of licensing more in line with the profitability which the authorised undertaking might achieve, taking into account that such cost represents a factor (as demonstrated with FWA) that constrains the capacity of operators to launch commercial operators, especially in respect of a technology which is not yet stable and whose commercial success is still not certain.
b) Emacom considers that in respect of the geographical coverage of services to be provided with BWA, analysis should be made of the particularities of the Autonomous Regions of Madeira and the Azores.
It further notes that, in respect of the Autonomous Region of Madeira, even though the liberalisation of the telecommunications market has allowed various operators to appear at a national level, the number of operators present in this region is very small, with the result that prices for telecommunication services are higher and that there has been weak implementation of new technologies and services already available on the mainland, such as VoIP or IPTV.
The company emphasises the example of the use of FWA frequencies, where despite usage licenses having been issued for this technology to various operators, just one is using it in the region, with coverage limited to the town of Funchal and for the service only of corporate customers.
The company therefore concludes that in the case of Autonomous Regions, the offer of BWA services delimited to regional territory would provide essential impetus in the creation of a new dynamic in the telecommunications market.
c) Grupo PT considers that:
- In respect of the limited access bands, especially in the 3.6 GHz frequency bands, the most suitable way forward would be to establish a geographical delimitation for the offer of BWA services. This delimitation could be the same or of the type adopted for the resizing of FWA titles, with interested parties being authorised to obtain licenses in one or more regions, including the totality of regions so as to allow national coverage.
d) Likewise, Onitelecom proposes that the geographic delimitations of licensing should follow a similar model to that defined for FWA or in some way differentiate by market, where the distinct residential/corporate and urban/rural components could be distinguished.
It further suggested that the division of the offer of services to be made by operators will necessarily have to be made by geographical areas adjustable to the progressively profitable business models and which are adjusted in an economically differentiated way by type of service and market, with levels of profitability which geographically affect the periods of implementation in accordance with the economic zones and their population density.
The parties which advocate the nationwide offer of BWA services base their position specifically:
a.) In the existence of problems of roaming, interconnection and coverage, which they consider would be caused by regional operations;
b.) In the potential infeasibility of the business model of geographically divided operation;
c.) In the need to ensure great flexibility of use, irrespective of physical location, catalyst of new broadband services, which would require national networks, which maximise this type of opportunity and provide economies of scale;
d.) In the possibility, even in a national operation, of operators, at any given moment, analysing the opportunities in each region’s market, seeking to bring its offers to all customers wherever this has technical and economic basis.
The positions of the respondents who advocated a nationwide approach to BWA are summarised as follows:
a) The position of Vodafone is that to facilitate and provide impetus to the successful launch of BWA services, these should be nationwide without any geographical delimitation, an option justified by the launch and publication of more attractive proposals able to satisfy the needs to the target customer and broaden the range of services provided.
b) Grupo PT, in respect of the free access bands, especially in respect of the 5.8 GHz frequency band, considers that the offer of BWA services could be nationwide.
c) Radiomóvel, Neuvex, Grupo SGC Telecom and the WiMAX Forum give similar positions:
- Radiomóvel and Neuvex, with consideration to the size of the country, the size of the Portuguese market and the geographical distribution of potential customers, have the position that the allocation of spectrum for the offer of BWA services should be done on a nationwide basis.
- The WiMAX Forum, although not manifesting preference in respect of the licensing process, considers that the possibility of services being offered at a national and worldwide level, allowing roaming, would be advantageous. It further adds that, roaming, interconnection and issues of coverage constitute challenges, in the event that titles of authorisation are at a regional level, which despite being an opportunity for smaller operators should also take into account the viability of business as well as the evolution of the market as far as secondary spectrum trading and consolidation operations are concerned.
- Grupo SGC Telecom, although not responding directly to the question, claimed that the allocation of these frequencies to Grupo SGC Telecom had the potential of creating a real second operator with national coverage. It also states that licenses with suitable spectrum would allow a provision of services with national coverage in urban and in rural areas, essentially directed at households and SMEs.
d) The positions set out by the equipment producer companies (Ericsson, Samsung Electronics UK, the Intel Corporation and Alcatel-Lucent) are in a similar vein.
c) What type of procedures do you consider most suitable for the allocation of rights/selection criteria for BWA systems in the bands mentioned in the Annexes?
In general the respondents expressed a preference for an allocation of spectrum through public tender, with only the considerations of the models proposed varying, with the following responses standing out:
a) Grupo PT considers two situation:
- In respect of spectrum that has already been allocated: the undertakings holding FWA titles should be able to install and exploit BWA systems with basis in the allocated titles. It does not consider a new allocation of right justifiable and consequently does not envisage any selection process.
- In respect of available spectrum: it considers that the holding of a tender for the allocation of rights constitutes a possible scenario. However, it considers that the conditions necessary for its successful execution are not yet in place, in particular because:
- The conditions of BWA exploitation are not yet stable;
- The technical specifications that the equipment and systems must adhere to are not fully defined or stable;
- Equipment and systems do not currently exist in the market that would allow a harmonised and efficient management of the available spectrum and would guarantee the interoperability of systems.
In these circumstances Grupo PT considers that ICP-ANACOM would face great difficulties in preparing a tender regulation and realistic tender specifications.
As an alternative (which it considers to be the most suitable procedure), it states that the allocation of rights could be performed according to the requests of duly authorised interested parties and with basis in concrete projects evaluated, in chronological order, by ICP-ANACOM according to previously quantified and defined criteria and where the efficient use of resources, innovation and the target population could constitute important selection factors. The transparency of the process could be ensured subjecting the draft decision of ICP-ANACOM to a market consultation, as has already been done with other services/projects.
Finally, this company, in view of the characteristics of the Portuguese electronic communication market, does not consider it suitable to allocate rights in a process that involves the auction of frequency blocks, the adoption of which would imply an alteration to applicable legislation.
b) Onitelecom considers that the selection criteria and the allocation of frequency band usage rights should be made by tender, with the proposals presented being evaluated against objective criteria of technical and economic capability on the part of the operators and giving weight to the capability of these operators to demonstrate the viability of their respective projects, as well as suitability of the proposals in terms of the needs for progressive development of services in respect of:
- Quality of service;
- Spectrum management;
- Guarantee of interoperability with other operators
Onitelecom further considers that it is relevant that the experience which the bidders have in the broadband telecommunications market be taken into account, along with their transmission capacities at a national and regional level, in order that the transmission needs demanded by WiMAX technology can be met.
c) Radiomóvel argues for the adoption of a procedure which would combine the publication of rules and conditions governing the frequency allocation procedure (pre-requisites, spectrum blocks, allocation criteria), stipulating a deadline by which operators, in view of these conditions, could confirm whether they are interested or not, with an auction process, in case of a shortage of spectrum, among undertakings that meet the pre-requisites.
d) Sonaecom argues for a so-called "beauty contest", putting forward, in terms of criteria, two aspects which from the offset are seen as relevant: efficient use of the available spectrum and diversity in the offer range.
It further mentions a number of factors which it considers important, such as technological and business know-how, as well as financial sustainability.
d) What type of requirements, as regards coverage obligations, quality of service, interoperability or other, do you consider should apply to usage rights?
Opinions on this question are divided between those that consider that there is a need for requirements and those that consider that a minimum of requirements should be imposed.
Of the answers whose views indicated the existence of restriction, the following positions are highlighted:
a) Onitelecom argues for the fixing of obligations arising from short and medium term coverage forecast plans to be presented by the bidders (together with a clear indication of the respective capacity in terms of existing transmission network and backbone) as part of their participation in the tender for the allocation of BWA usage licenses, which should also be linked to the patterns of business development (in order to avoid economic blockage or the profitability of infrastructure not adherent to the market).
It further considers that a set of measurable quality of service parameters should be set which reflect the commitment of the operators, with basis in the capacity of BWA technology and its integration in the network. These parameters should be developed by the bidders, with basis in technical field studies and tests.
Finally, with respect to interoperability, it argues that the operators should guarantee interoperability, insofar as it is technically possible, with all fixed, mobile and similar networks (possibly regulated, insofar as it is technically feasible).
b) Sonaecom considers that the obligation associated with the licenses should be derived from the proposals which win the licensing tender, and that the ab initio imposition of obligations should be avoided at all costs, except in respect of the principle elements such as interoperability and the protection of integrity of public electronic communication networks.
It points out that in the current regulatory framework the services covered by the licenses which will be issued for BWA are already subject to obligations in respect of quality of service and statistical reporting. As such it argues that the definition of new obligations in these areas would not have relevant impact on consumer protection and would merely constitute an additional operational cost for the licensees.
In respect of the payment of spectrum usage fees, Sonaecom mentions two factors, which in its opinion, require attention:
- Priority should be given a cost flexibility in line with the penetration of the service, so that the negative impact in the launch phase of these offers is minimised;
- While the administrative costs of managing the spectrum should be reflected, there should only be a conservative reflection of the economic value of the spectrum (so that this does not become an obstacle to the development of offers supported by this technology, given the technological uncertainty that still exists and the competitive pressures exerted by competing offers).
c) Grupo PT considers that, in the event that the allocation is made by selection tender, the titles should set out all the relevant requirements and parameters of the specifications, upon which the tender is based, as well as the relevant commitments and conditions of offer and exploitation according to the project presented by each successful candidate.
Alternatively, in the event that the selection process is performed according to the requests of duly authorised interested parties and with basis in concrete projects evaluated, in chronological order, by ICP-ANACOM according to previously valued and defined criteria, it considers that the requirements referred to in this question should be included in the titles, along with all the commitments, relevant technical parameters and conditions of offer and exploitation which were set out in the presented projects.
The positions given by parties that argued for the imposition of a minimum of requirements are set out below, with emphasis given, in particular, to the arguments used for the non-imposition of determined obligations:
a) Radiomóvel considers that the imposition of requirements should be limited to the number of base stations and the obligation to use the spectrum over a determined period of time.
It further considers that the operator has the obligation to report, to the final customer and to the Regulatory Authority, on the quality of service levels offered on its network, which levels could vary according to the type of service and tariff. However it considers that these will be dictated by market demand, by competitiveness in a scenario of free competition and by the innovation of the services offers, and that in the initial phase, any obligation at this level could constitute a barrier to the development of a viable business plan and to success, both for the consumer and for the operator.
As regards interoperability, it considers that this must be ensured at the level of the IP networks, specifically as far as interconnection with other networks is concerned.
b) Vodafone considers that the regulator should not impose any obligation in respect of coverage and/or installation of a minimum number of base stations, and that the licensee should, at any time, be able to define the coverage necessary in view of the expectations of demand and attempting to satisfy the needs of its customers, in each geographical area, thus leaving the onus of the decision in the hands of market and competition forces.
The company further considers that any spectrum fees charged by ICP-ANACOM should be defined in an objective and transparent way, in accordance with the administrative costs incurred through its management control and the application of the general authorisation regime, in order to not constrain the return on investment in stations and, as a result, limit the dynamism of the product and/or service offers based on this technology.
Finally it considers that the criteria associated with the effective use of the frequency should be carefully defined in order to avoid interference between entities using adjacent bands.
c) Neuvex argues against special obligations in respect of coverage criteria, given that the emerging BWA technologies are based on IP which already has national distribution and that the quality of service criteria should be the same as those demanded for existing broadband services (for example VoIP, IPTV, etc.).
d) Alcatel-Lucent argues a broader position, proposing that it should be left to the operators to decide on issues related to technology, services and applications, according to their adopted business models, without altering the terms of the license. It admits, however, the possibility of the regulator defining some conditions associated with the use of licensed spectrum frequencies, recommending (as part of its response to question 2.b) that the license conditions should be adapted to the geographical specification and the economic development objectives of the country, without losing sight of the viability of the operators’ business models.
e) The Intel Corporation further emphasised that the spectrum should be consigned in a fair and proportional way, in order to a avoid situations where spectrum is retained but not used.
e) Do you consider that BWA services will complement or coincide with other existing or future technologies (in operation or planned) in the same or other frequency bands?
From the responses to this question it can be seen that the majority of the parties (eight to be exact), consider that the offer supported by BWA will complement the offer associated with other technologies. Accordingly, their position is that by doing so it will provide a widening of the zones covered, a strengthening of the capacity, and as a consequence, of the offer of services, according to the location of the user and the type of services desired in each case.
The offers identified as being potentially complemented by BWA include those supported by Wi-Fi, DSL, 2G e 3G, with the following being pointed out:
- The potential of WiMAX for IP-based, bit stream wireless broadband communication, which could be used to strengthen the data component of a 3G network (while one of the parties explains that in urban areas, the large number of stations needed, in view of the need for line of sight (LoS) connections, and the complexity involved in obtaining authorisations from condominiums and municipalities implies such a large investment that the potential of BWA to compete effectively would be minimised in areas where the fixed broadband technologies are well implanted);
- The possibility of BWA, in a first phase, of providing not only broader coverage through its own means, but also addressing new segments of the market, thanks to the ease of installation and development of coverage without the need for physical networks of third parties and, in the second phase, the implementation of changing location functionalities and the development of nomadic services, maintaining characteristics typical of fixed services, and the potential application of WiMAX for backhaul applications, both for Wi-Fi hotspots and for cellular networks.
Some of the parties also considered that BWA technologies would contribute, in the long term, to the convergence of services, especially as the industry evolved towards 4G and advanced IMT technologies, as Samsung Electronics UK explained, as referred to in the development of the a new IEEE project on the 802.16m standard.
It is important to also point out that three of the parties cited the relevance of the role that BWA could play in the provision of services in rural and remote areas, less well served by other broadband technologies such as cable or DSL.
Emphasis should be given to the position of Sonaecom which also considers that in urban areas BWA would be a difficult alternative for new operators who desire to enter the market or even for existing operators who don’t have an existing network to which BWA would bring significant synergies. As such it mentions that the mobile operators seem well positioned, given the synergies that they could obtain.
Four other parties considered that the offer of BWA supported services would complement and at the same time compete with the offer associated with existing technologies. Of these parties, emphasis should be given to the position of Neuvex which sets out which offers it considers to be complementary, stating that "the offer of BWA supported services may complement other existing technologies as in the case of wireless operators (GSM, UMTS, CDMA2000, etc.) and work in competition in the case of fixed operators (fixed telephone service, cable broadband, etc.)".
Manuel de Azevedo, U. Lda, emphasises the competing character between technologies, arguing that "the service supported by BW in areas of coverage could easily compete with the services of cable through its mobility and with other services for example 2.5 e 3G through its bandwidth". The same party also states that it envisages that "BWA could compete with other services owing to the low cost of its data equipment".
Reference should also be made to the suggestion of Onitelecom for the need to making pilots viable in real time, with a view to testing the technical performance of BWA networks and the compatibility between systems and services.
