RESOLUTION. - File reference: BK 1a-09/001

Transcription

1 1 TRANSLATION RESOLUTION Decision of the President's Chamber of the Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway of 12 October 2009 on the flexibilisation of the frequency usage rights for wireless access for the offer of telecommunications services in the ranges 450 MHz, 900 MHz, 1800 MHz, 2 GHz and 3.5 GHz - File reference: BK 1a-09/001 Background The Federal Network Agency took the decision to flexibilise the frequency usage rights for wireless access for the offer of telecommunications services in the bands 450 MHz, 900 MHz, 1800 MHz, 2 GHz and 3.5 GHz through the President's Chamber. The existing frequency usage rights in these ranges are to be adjusted to achieve the target of technology and application neutrality. This decision serves to promote the implementation in Germany of the Wireless Access Policy for Electronic Communications Services (WAPECS) of the Radio Spectrum Policy Group (RSPG). In its opinion on WAPECS the RSPG states that technology and service neutrality are policy goals to achieve more flexible frequency use and that as few technical restrictions as possible should apply to the use of the frequency bands mentioned in the opinion (amongst them the frequency bands dealt with here). It is planned to publish this decision on the Federal Network Agency's web site as well. 212c 5555 RESOLUTION Decision of the President's Chamber of the Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway of 12 October 2009 on the flexibilisation of the frequency usage rights for wireless access for the offer of telecommunications services in the ranges 450 MHz, 900 MHz, 1800 MHz, 2 GHz and 3.5 GHz - File reference: BK 1a-09/001 The following decision was made by the President's Chamber of the Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway on the flexibilisation of frequency usage rights for wireless access for the offer of telecommunications services in the bands 450 MHz, 900 MHz, 1800 MHz, 2 GHz and 3.5 GHz: In case of divergent interpretation of the German and English text, the German text shall prevail. This decision serves to transpose Council Directive 87/372/EEC of 25 June 1987 on the frequency bands to be reserved for the coordinated introduction of public pan-european cellular digital land-based mobile communications in the Community.

2 2 The Federal Network Agency is taking the following activities to flexibilise frequency usage rights for wireless access for the offer of telecommunications services in the bands 450 MHz, 900 MHz, 1800 MHz, 2 GHz and 3.5 GHz: Activity 1: Activity 2: Activity 3: Activity 4: Activity 5: Activity 6: The Federal Network Agency will open up the possibility of access to radio frequencies for wireless access for the offer of telecommunications services under 1 GHz by assigning available spectrum in the band 800 MHz by means of open, transparent and non-discriminatory award proceedings (BK1a-09/002). This award procedure will be linked with the frequency assignment proceedings already initiated in the band 1.8 GHz, 2 GHz and 2.6 GHz for wireless access for the offer of telecommunications services (BK1-07/003). The Federal Network Agency will flexibilise GSM frequency usage rights (900 MHz and 1800 MHz) as quickly as possible upon application and in accordance with the Directive of the European Parliament and of the Council amending Council Directive 87/372/EEC 1. The Federal Network Agency will take a decision ex officio on the assignment of the frequencies in the 900 MHz and 1800 MHz band with effect from 01 January 2017 before the current frequency usage rights in these bands expire. The same applies should the holder of a frequency assignment submit an application for an extension of the limited period of use beyond 31 December The Federal Network Agency will flexibilise UMTS/IMT frequency usage rights (2 GHz) upon application as quickly as possible. The Federal Network Agency will flexibilise the frequency usage rights for wideband trunked radio in the frequency band 450 MHz upon application as quickly as possible. The Federal Network Agency will flexibilise the frequency usage rights for broadband wireless access (BWA) in the band 3.5 GHz upon application as quickly as possible. The decision is based on the following considerations: 1 This Directive was adopted by the European Parliament on 06 May 2009 and by the Council on 27 July 2009 (European Commission Press Release IP/09/1192 of 27 July 2009). As far as the Federal Network Agency is aware, the legal act is expected to be promulgated in the European Union s Official Journal in mid-october 2009.

3 3 A. Starting situation The following issues were raised: Several respondents claimed that the usage rights for the 2.6 GHz band should be included in the draft. Some pointed out that companies holding frequency assignments in that band already had to take recourse to the courts to obtain an extension and would again be discriminated against. As regards general market developments, it was noted that the market for broadband wireless access continued to grow rapidly worldwide, especially in Europe. The significance of the market would continue to increase in the next decade, particularly because of the high demand for smartphones. Analysts forecast that 3rd generation mobile communications (G3) will make up 80 per cent of mobile broadband use by The main reason for this trend is said to be the decline of 2nd generation mobile communications (G2). At the same time, LTE technology (Long Term Evolution), which is increasingly penetrating the market, will supplement 3G and probably gain market shares beyond HSPA+ (High Speed Packet Access), a more advanced version of UMTS which became marketable in 2009, is said to offer significantly improved data transmission rates and functional features. That is why HSPA+ is deemed much more sophisticated than 2G technology. HSPA+ release 7 is already available. The introduction of 64 QAM (quadrature amplitude modulation) and MIMO (Multiple Input Multiple Output) enables peak transmission rates of up to 28 megabits per second (Mbit/s). Some of HSPA+ release 7 s main features support the technology s rollout by the mobile operators: It is easy to retrofit existing network devices with HSPA+ and this technology hence represents a cost-efficient enhancement of existing 3G networks. HSPA+ terminals are backwards compatible. HSPA+ enables the capacity in a 5 MHz channel to be increased substantially within an appropriate period whilst use of mobile data transfer has developed at an explosive rate, necessitating three HSPA carriers in some urban areas. This multi-carrier technology which allows simultaneous multiple transmission of data via adjacent 5 MHz channels will become reality with HSPA+ release 8. This will improve the reliability of the data transmission rates under real conditions as experienced by mobile users within a cell and especially at the border of a cell. LTE is deemed an optimised OFDMA solution (Orthogonal Frequency Division Multiple Access) following 3G enhancement plans. It increases not only spectral efficiency but also the mobility features of 3G technology. LTE increases data rates in densely populated areas, especially through the use of networks operating in frequency bands allowing a bandwith of more than 10 MHz. HSPA+ and LTE permit prarallel evolutions. Whereas HSPA+ enables optimum use to be made of 5 MHz and 10 MHz FDD frequency channels (Frequency Division Duplex), LTE is considered to be the optimal solution for the new FDD frequency bands with a bandwidth of 10 MHz or 20 MHz and for TDD spectrum (Time Division Duplex). In view of these key features it is claimed that it will be possible to use LTE at an early stage to improve capacity in densely populated areas and to complement HSPA+. HSPA+ will continue to offer users valuable broadband experience in rural areas. HSPA+ release 7 solutions for data terminals are already available, for handsets solutions are expected at the beginning of Tests of the HSPA+ release 8 functions for data terminals are anticipated in mid The first devices are said to be scheduled for mid The HSPA+ release 8/LTE multimode solutions have a similar schedule (availability mid-2010). HSPA+ release 8/LTE solutions for handsets are expected to be launched in 2011.

4 4 Mobile operators need new (2.6 GHz) and existing (1800 MHz, 2 GHz) higher frequency bands for additional capacity as well as new (800 MHz) and existing (900 MHz) lower frequency bands for covering their broadband networks in rural areas and in buildings. The Chamber has come to the following conclusion: This decision takes into account the development of telecommunications markets characterized by the increasing convergence of services and technologies, merging markets that have been separated to date, rapidly increasing demand for broadband access to telecommunications networks and wide-ranging flexibilisation of frequency regulation. The outcome of the public consultation confirms the Chamber s statement. In its decision, the Chamber not only bore the interests of users in accordance with section 2(2) para 1 TKG and the promotion of innovative technologies in accordance with section 2(2) para 3 TKG as regulatory aims in mind but also took the need to secure efficient and interference-free use of frequencies and fair and workable competition in accordance with section 2(2) TKG into account. Modern frequency regulation makes these objectives as valid and effective as possible. If individual regulatory requirements from the past are recognized as being no longer required or suitable to realize the targets and are therefore barriers that can be dispensed with, these barriers must be removed within the frequency regulator s legal scope for assessment and development until the degree required to realize the above described objectives is reached and unjustified access restrictions have been removed. This decision fosters this objective. The regulatory framework conditions of all frequencies intended for wireless access for the offer of telecommunications services are to be flexibilised. This means that barriers that can be dispensed with will be removed on account of technical, competitive-economic and international developments. Once all measures required to realize this target have been completed, the regulatory requirements will be reduced to a minimum level. With its decision, the Chamber determines the Federal Network Agency s next steps in flexibilising existing frequency usage rights in frequency bands that are currently intended in the Frequency Usage Plan (April 2008; last amended in October 2009, published in the same Official Gazette) for wireless access for the offer of telecommunications services. These are the following frequency bands: Name Wideband trunked radio Lower band Frequencies (in MHz) Entry into the Frequency Usage Plan Upper band Frequencies (in MHz) Entry into the Frequency Usage Plan No No GSM No No No No GSM No No UMTS/ No No duplex band IMT No No No No No No No duplex band

5 5 BWA No No No No No No Some respondents claimed that the usage rights for the 2.6 GHz band should also have been included in the draft. In this connection the Chamber wishes to point out the following. As expounded above, this decision merely concerns the flexibilisation of existing frequency usage rights in bands currently dedicated in the Frequency Usage Plan for wireless access for the offer of telecommunications services. Since changes to the Frequency Usage Plan do not automatically change existing frequency assignments, further activities are needed for continuing the process of flexibilisation at the level of the actual usage rights. This decision (BK 1a-09/001) lays down the framework conditions for implementing the flexibilisation of existing frequency assignments, i. e. of frequencies which have been assigned and as such are not available in accordance with section 55(5) sentence 1 para 2 TKG, whilst in its parallel proceedings BK 1a-09/002 the Chamber awards the frequencies available under framework conditions which are flexible from the start. Keeping this in mind, the 2.6 GHz band just as the frequency bands MHz/ MHz and 3.6 GHz to 3.8 GHz is not the subject of this decision because in the 2.6 GHz band there are no frequency usage rights which could be flexibilised. In fact, the frequency usage rights assigned in this band are flexible from the start. Contrary to the view of some respondents, frequencies in the 2.6 GHz band have not been assigned to companies. At present, use of part of these frequencies by a company is tolerated on the basis of a settlement reached between the Federal Network Agency and this company before a court until the court comes to a legally binding decision but at the longest (however) until the use is taken over by another assignee. The frequencies covered by the court settlement are hence deemed available under section 55(5) sentence 1 para 2 TKG and as such are the subject of the BK 1a-09/002 proceedings. This decision also takes into account beyond the frequency bands concerned the regulatory interconnections with other frequency bands, if this is required. This particularly applies to avoiding interference with radio systems in adjacent frequency ranges. Where it was stated in K 9 18 discussion paper (see also following C.III.) that the frequency bands 876 MHz to 880 MHz and 921 MHz to 925 MHz (GSM-R) should be included in the concept, we agree with this assessment. The Chamber is aware that the technologies and systems used after flexibilisation must ensure coexistence with the existing railway radio applications within the affected frequency bands as well as in relation to adjacent frequency bands. Investigations into this were actively supported by committees of the European Conference of Postal and Telecommunications Administrations (Conférence européenne des Administrations des postes et des télécommunications; CEPT). The Electronic Communications Committee (ECC) of CEPT concludes in report 96 on the interference situation between GSM-R and UMTS in the 900 MHz band that compatible use of both systems is possible in adjacent frequency ranges if specific general conditions are complied with. These general conditions are to be stipulated in the specific administrative measures on implementing Activity 2. B. Strategic frequency regulation approach The Federal Network Agency (then Reg TP) put down in writing its strategic approach for exploiting the options available to it back in Following a public hearing and evaluation of the statements submitted, the result was published under the title Strategic aspects of frequency regulation (in the following strategy paper ; can be downloaded at

6 6 Due to the type of use and status of technology, the frequency spectrum required to provide wireless access for the offer of telecommunications services is a public resource that is only available to a limited extent, in shortage depending on demand, and cannot be reproduced. The possibility of using frequencies can therefore not be left entirely up to market forces. Anticipatory, non-discriminatory and proactive frequency regulation is required. The purpose of such frequency regulation is to manage the provision of frequencies appropriately as a resource and ensure that demand is met and the requirements of the market are satisfied. In this connection, it is not just the existing frequency uses that have to be kept in mind, but also future technological and market developments, as far as they can be foreseen. This is the only way of ensuring a rapid and adequate response to changing market demand and changing framework conditions. As a rule, the Federal Network Agency s decisions are intended to provide regulation that is neutral in terms of application and technology in order to promote new and innovative applications and technologies. On the other hand, it must also take account of major economic and competitive aspects. Based on these strategic considerations, the Federal Network Agency commissioned a study on the flexibilisation of frequency regulation. The study was completed in December 2005 (can be downloaded at A flexible approach towards frequency regulation is recommended by the authors of the study. Liberalising the regulatory requirements in the National Table of Frequency Allocations according to section 53 TKG and the Frequency Usage Plan according to section 54 TKG, on the one hand, and the frequency usage conditions in frequency assignments according to sections 55, 60 TKG, on the other hand, was suggested as a major component of flexibilisation. Planning requirements and frequency usage rights should be provided as neutrally as possible in terms of technology and applications. Based upon this strategy, the Federal Network Agency initiated and pushed the European initiative of a Wireless Access Policy for Electronic communications services (see also C.I. in the following) with the objective of a harmonized approach for flexibilising frequency regulation. C. Flexibilisation of frequency regulation The following issues were raised: Further amendments of the regulatory rules are deemed necessary to satisfy customer requirements regarding area and capacity coverage. Taking Japan as an example, it was claimed that it is much easier to develop broadband wireless access in Japan and greater progress has hence been achieved there than in Europe. One local operator had even been able to install 2000 WiMAX stations and put a commercial, broadband network covering 25 per cent of the Japanese population into operation within six months. The most important differences between Japan and Germany are deemed to be (i) the high level of cell density and direct connection to the fibre optic network, (ii) the initiation of the terminals by the network over the air interface, facilitating sales via resellers, (iii) the network-side support of different models for integrating MVNO (Mobile Virtual Network Operator), and (iv) the outsourcing of network operation to an external operator. These four innovations find little favour in Germany. The Chamber has come to the following conclusion: Individual concepts for specific frequency bands have been prepared and initial appropriate measures taken based upon the Federal Network Agency s strategic approach to flexibilise frequency regulation. The Federal Network Agency acted in compliance with the European harmonization within the European Union and CEPT.

7 7 In the course of the public consultation it was stated that further amendments of the regulatory rules were deemed necessary. In this connection the Chamber wishes to point out that it is of the opinion that the regulatory framework should be constantly adapted to continuously changing circumstances. Already in its strategy paper the Federal Network Agency pointed out the frequency-related regulatory cycle when it stated the following (page 10f): Planning and assignment specifications create a stable basis for frequency users and market players. From a technical frequency-regulatory viewpoint this is particularly true due to the specification of concrete usage parameters for efficient and interference-free frequency use. From a competitive and economic viewpoint, this applies, inter alia, because of the provision of the necessary planning certainty for market players in refarming specifications or a limitation of the frequency users in particular fields. The specifications in these areas do not imply, however, that stability is achieved by means of rigid rules. Although the specifications not only accurately mirror prevailing conditions but also incorporate future developments as far as possible, the individual frequency regulation elements must also continue to lend themselves to changing market conditions. This necessitates an ongoing adaptation process focussed on the dynamics of technological and market developments. For this reason Reg TP must constantly monitor the frequency-related regulatory as well as competitive and economic aspects of frequency regulation, determine the need for action and act accordingly in its plans and specifications. Also in the future it will be one of Reg TP s main tasks in frequency regulation to provide all market players with stable conditions without impairing the flexibility necessary for the introduction of new technologies and for changing market forces. In the Chamber s opinion, the differences between Japan and Germany are solely ascribable to entrepreneurial decision-making. There is certainly no reason to believe that the differences are due to differences in the regulatory framework since the business model described could also be implemented in Germany. I. Pan-European harmonized flexibilisation The following issues were raised: The Federal Network Agency refers to the fact that under the WAPECS concept the Member States are called upon to urgently clarify existing authorisation conditions and to repeal restrictions where possible in order to promote flexibility, rapid access to frequencies and competition, also in infrastructure. These statements are deemed to require amplification. It should be clarified that the prevention and dismantling of competitive distortions are also considered to be part of the WAPECS concept and hence that flexibilisation should not be implemented at all costs. Flexibility should be used to establish a level playing field and to give customers the chance to use modern technology. None of the two goals should be considered or pursued singly. It was also pointed out that the documents of the European Commission referred to in the draft always contained a statement to the effect that in the course of flexibilisation competitive distortion should be avoided and even reduced. In this context the suggestion was also made that a list showing the measures being taken or having been taken in other countries on the Continent in terms of frequency use flexibilisation be added.

8 8 The Chamber has come to the following conclusion: On 23 November 2005 the Radio Spectrum Policy Group (RSPG) established in line with the European Commission s decision of 26 July 2002 (Official Journal EC No. L 198 of 27 July 2002, page 49) adopted an opinion on the Wireless Access Policy for Electronic Communications Systems (WAPECS) (RSPG opinion no. 3; RSPG final (can be downloaded in English at In its opinion on WAPECS, the RSPG explains that technology and service neutrality are policy targets for achieving more flexible frequency usage and that a minimum number of restricting frequency conditions should apply for using the frequency bands specified in the opinion (of the applicable frequency bands). Germany advocated implementation of this concept. Accordingly, frequencies were made available by the Chamber according to the WAPECS concept. It assigned frequencies for broadband wireless access (BWA) in the band 3.4 GHz to 3.6 GHz in a technology and application-neutral manner (BK 1-05/008). Some comments on the draft decision stated that it should be clarified that preventing and reducing competitive distortions also formed part of the WAPECS concept. In this connection the Chamber wishes to point out the following. WAPECS is a framework for the provision of electronic communications services within a set of frequency bands defined by the Member States of the European Community in which a range of electronic communications networks and electronic communications services may be offered on a technology and service neutral basis, provided that certain technical requirements to avoid interference are met, to ensure the effective and efficient use of the spectrum, and the authorisation conditions do not distort competition (page 2f of the WAPECS concept). The WAPECS concept does not need to be introduced throughout the Community quasi overnight. In the RSPG s opinion, such an approach would have the potential to cause disruption in the market and discourage investment in the short term. The RSPG hence considers that implementation packages, detailing specific actions required for flexibilisation, are needed to ensure that sufficient spectrum is made available at the same time to avoid congestion, hoarding and allegations of unequal treatment (page 14). The Chamber has taken up the RSPG s statement and with its approach is pursuing the implementation package concept. With this decision, existing frequency usage rights are rendered flexible in terms of the WAPECS framework. To this end, the Chamber is linking several WAPECS frequency bands and is flexibilising them en bloc at the same time. Furthermore, all available frequencies dedicated to wireless access for the offer of telecommunications services are placed at the disposal of the market in joint award proceedings (BK 1a-09/002) The Chamber is convinced that this mode of procedure will fully cover the WAPECS concept, including its competition aspects, and that an overall view of the Chamber s decisions will reveal its contribution to implementing the regulatory aims in section 2(2) TKG as best possible. Especially by opening up access to further spectrum at 800 MHz, the Chamber has created a basis which allows the market itself to organise the distribution of the frequencies. Under the title Rapid access to spectrum for wireless electronic communications services through more flexibility, the Commission of the European Communities directed Communication COM(2007) 50 to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on 08 February 2007 (can be downloaded at In this, the Member States are asked to clarify existing authorisation conditions (technical and nontechnical) as a matter of urgency and to remove restrictive conditions wherever possible in order to facilitate flexibility, rapid access to spectrum and competition, including in the area of radio infrastructure.

9 9 The Chamber sees no reason to draw up and publish a list of the measures taken or being taken in other countries on the Continent to render frequency use more flexible. Such an exercise would not conform to any of the Federal Network Agency's legal mandates. In its implementation of Community and federal law the Federal Network Agency closely cooperates with other frequency regulators and the European Commission and is aware of the flexibilisation status in other States. II. Flexibilisation of the frequency usage plan To provide a basis for flexibilising the conditions of use, the respective dedications in the Frequency Usage Plan had to be adjusted first. Taking into account the WAPECS concept, the Frequency Usage Plan was gradually flexibilised by the Federal Network Agency for the frequency bands concerned. In April 2008, it informed the public by ordinance 27/2008, Official Gazette Federal Network Agency 6/2008, page 543, about the changes to parts of the Frequency Usage Plan. Since then, the GSM and UMTS/IMT 2000 frequency bands have been dedicated to wireless access for the offer of telecommunications services. This dedication is described in the general part of the Frequency Usage Plan (April 2008) as follows: The wireless access for the offer of telecommunications services serves to connect terminal equipment to radiocommunication networks via land stations that cover one or several radio cells (sectors). This definition (published in ordinance 33/2009, Official Gazette Federal Network Agency 15/2009, page 2985) was amended as follows in August 2009: The frequency use serves to connect terminal equipment to radiocommunication networks via land stations. Telecommunications services are normally offered by these means. According to section 3 para 24 TKG, telecommunications services are services normally provided for remuneration consisting in, or having as their principal feature, the conveyance of signals by means of telecommunications networks, including transmission services in networks used for broadcasting. The Federal Network Agency opened up a procedure for amending the Frequency Usage Plan to implement decisions taken by the World Radiocommunication Conference 2007 (WRC-07) of the International Telecommunication Union (ITU) and implement the WAPECS concept further. By ordinance 2/2009, Official Gazette Federal Network Agency 4/2009, page 607, the public was informed about this and participation of interested public groups was initiated. According to the draft submitted of the entries changed in the Frequency Usage Plan, the frequency bands that have so far been assigned to wideband trunked radio and BWA are to be made more flexible and assigned just as the GSM and UMTS/IMT-2000 frequency bands for wireless access for the offer of telecommunications services. After completion of this procedure to change the Frequency Usage Plan (cf ordinance 33/2009, Official Gazette Federal Network Agency 15/2009, page 2985) the legal requirements of the frequency bands concerned will be dedicated consistently and without limitation to a specific standard. Thus, usage rights in the frequency bands concerned can be assigned neutrally in terms of technology and applications and existing frequency usage rights can be made more flexible. III. GSM flexibilisation The foundations for flexibilising GSM spectrum were defined at an early stage by the Federal Network Agency. Its concept on awarding further spectrum for digital public cellular mobile radio below 1.9 GHz of 21 November 2005 (GSM concept; ordinance 88/2005, Official Gazette Federal Network Agency 23/2005, page 1852; can be downloaded at meant that the regulatory framework conditions were adjusted, paving the way for flexibilising GSM spectrum. The following was stated in the GSM concept (ordinance 88/2005, cit. loc. page 1853):

10 10 The plan is to further develop the GSM concept upon completion of the activities described above with a view to subsequent linking to other concepts such as the UMTS concept to ultimately achieve interconnection of radio markets and their regulatory framework conditions. The GSM concept presented here is to be continued after its implementation in a next step that provides technical regulatory foundations to enable GSM frequencies to be used with other systems as well (transition of spectrum usability by systems with 5 MHz bandwidth). In a next step, the intention is to look into the legal framework conditions of the various mobile communication uses with reference to merging the markets. It is our long-term target to provide a flexibilisation of regulatory framework conditions to the extent that radio frequencies will no longer be assigned to specific types of use, but that all services that are technically feasible in a specific frequency band can be offered. Since then additional measures for harmonizing the pan-european flexibilisation of GSM frequency usage rights have been taken. On 1 December 2006 the ECC adopted a decision on the assignment of frequency bands 880 MHz to 915 MHz, 925 MHz to 960 MHz, 1710 MHz to 1785 MHz and 1805 MHz to 1880 MHz for terrestrial IMT-2000/UMTS systems (ECC/DEC/(06)13). This decision mainly concerns the fact that the named frequency bands are to be dedicated for terrestrial IMT- 2000/UMTS systems according to the WAPECS concept of RSPG. National authorisation procedures and market demand are to be taken into account in this process. In addition, the existing GSM applications are to be safeguarded with adequate measures. In its communication COM(2007) 50, the Commission stated that action was required due to the introduction of third-generation mobile communications services and the continued restrictions imposed by Directive 87/372/EEC and announced its intention to have the applicability of this Directive reviewed. Against this backdrop, on 25 July 2007 the Commission submitted to the European Parliament and to the Council a proposal for a directive of the European Parliament and the Council repealing Council Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public pan-european cellular digital land-based mobile communications in the Community (KOM (2007) 367) (Official Journal European Union No. C 191 of 17 August 2007, page 14, can be electronically downloaded at On 19 November 2008 the Commission submitted to the European Parliament and the Council a proposal for a directive by the European Parliament and the Council amending Council Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public pan-european cellular digital land-based mobile communications in the Community (KOM (2008) 762), can be electronically downloaded at In contrast to the proposal of 25 July 2007, the draft of a directive no longer provides for repeal, only amendment. The proposed amendment is aimed primarily at removing the restriction of the GMS standard. The procedure for adopting this directive has meanwhile been completed. The Directive of the European Parliament and of the Council amending Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public pan European cellular digital land-based mobile communications in the Community is at present expected to enter into force in October of this year. 2 On 22 May 2007 the Radio Spectrum Committee (RSC) that was established according to art. 3, No. 1 of Decision No. 676/2002/EC of the European Parliament and of the Council of 7 March 2002 on a regulatory framework for radio frequency policy in the European Community (Radio Spectrum Decision) adopted a draft of a Commission Decision on the harmonisation of the 900 MHz and 1800 MHz frequency bands for terrestrial systems capable of providing pan-european 2 See footnote 1.

11 11 electronic communications services in the Community (RSCOM07-04 final). The procedure involving the adoption of this decision has meanwhile also been completed. The draft for the Commission s decision was updated with due consideration being given to the Directive of the European Parliament and of the Council amending Council Directive 87/372/EEG and finally adopted by the Radio Spectrum Committee in September 2009, using the written procedure. The Commission decision on the harmonisation of the 900 MHz band and the 1800 MHz band for terrestrial systems capable of providing pan-european electronic communications services in the Community is at present expected to enter into force in October of this year. 3 According to this draft resolution, the frequency bands covered are still to be provided for GSM systems in the future. In addition, the frequencies concerned are also gradually to be assigned and provided for other terrestrial systems that can render electronic communications services in the Union, on the condition that they comply with the technical conditions that are listed in the annex to the draft resolution. Since the formal implementation of this decision requires the amendment of Directive 87/372/EEC (GSM Directive) and this procedure has not yet been completed (see above), the decision finally adopted in the RSC has not come into force so far. Against this backdrop, the Federal Network Agency took the initiative to flexibilise GSM frequency usage rights following flexibilisation of the Frequency Usage Plan. On the way towards flexibilisation of the GSM frequency usage rights, the Federal Network Agency considered it useful to begin by fully determining the circumstances, legal position and interests. A discussion paper with five core issues in the flexibilisation project was formulated for this purpose. The discussion paper for preparing a concept on the flexibilisation of frequency usage rights in the bands 900 MHz and 1800 MHz (K 9 18 discussion paper) was published on 19 November 2008 at the Agency's web site ( and in the Official Gazette of the Federal Network Agency (Communication 663/2008, Official Gazette Federal Network Agency 22/2008, page 3649ff) and comments were invited on this. A total of 15 comments have been received by the Federal Network Agency with reference to the K 9 18 discussion paper. In addition to the four GSM network operators and (potential) competitors, regional fixed network operators, manufacturers and membership groups also responded. In particular, a complex situation in terms of individual interests has been confirmed that is contradictory in many ways. Thus, comprehensive regulatory consideration and assessment have turned out to be necessary. A key result of the public hearing has been the demand not to favour GSM frequency usage rights for flexibilisation over frequency usage rights in other frequency bands such as 450 MHz (wideband trunked radio) or 3.5 GHz (BWA). The Chamber addressed this demand and took it seriously into account in this decision. IV. Flexibilisation UMTS/IMT-2000 In summer 2000 the Federal Network Agency at the time named Reg TP auctioned licenses for the operation of transmission paths in the frequency bands from 1900 MHz to 1980 MHz, 2010 MHz to 2025 MHz and 2110 MHz to 2170 MHz for publicly available third-generation (3G) mobile services (UMTS/IMT-2000). The award procedure was based in particular on the decisions of the Chamber of 18 February 2000 on the determinations and rules for the award of licenses for the Universal Mobile Telecommunications System (UMTS)/International Mobile Telecommunications The Members of the Radio Spectrum Committee adopted the draft for the Commission decision, using the written procedure. This means that the preconditions for the establishment of the decision under Art. 4 of the Radio Spectrum Decision are met. As far as the Federal Network Agency is aware, the legal act will be promulgated in the Official Journal of the European Union in mid-october 2009.

12 12 (IMT-2000), third-generation mobile communications, file reference: BK-1b-98/005-1, ordinance 13/2000, Official Gazette Reg TP 4/2000, page 516, and the rules for conduct of the auction for the award of licenses for UMTS/IMT-2000, thirdgeneration mobile communications, file reference: BK1b-98/005-2, ordinance 14/2000, Official Gazette Reg TP 4/2000, page 564. Frequencies from MHz to MHz were not awarded because they were reserved for license-free applications (so-called SPA applications) under decision ERC/DEC/(99)25. Six licenses were issued as a result of the auction proceeding (see communication 597/2000, Official Gazette Reg TP 20/2000, page 3435). These licenses and frequency usage rights shall remain in effect according to section 150 (3) and (4) TKG. These frequency usage rights were assigned from the outset in a technology-neutral manner and all technologies from the so-called IMT family could be used. Usage was thus not limited to the UMTS standard. In 2005 these frequency bands were identified by the RSPG for the flexibilisation based upon the WAPECS opinion (RSPG final). In its opinion, the RSPG recommends providing more flexible conditions for frequency usage rights for these frequency bands, in particular by ensuring the principles of neutrality in terms of technology and applications. The European Commission took up RSPG s recommendation and called in Communication COM 2007 (50) for the frequency regulatory authorities of the Member States to review the frequency bands used for third-generation mobile communications services from 1900 MHz to 1980 MHz, 2010 MHz to 2025 MHz and from 2110 MHz to 2170 MHz in terms of introducing greater flexibility. In 2006 the ECC of CEPT adopted the decision ECC/DEC/(06)01, which also allows greater flexibility when selecting technology with frequency division duplex (FDD) or time division duplex (TDD) transmission schemes. Additionally, these frequencies are harmonized for applications with technologies from the IMT family. V. Flexibilisation of wideband private mobile communications / trunked radio Based upon the decision of the Chamber of 17 December 2004 on the procedure for the award of frequencies for wideband private mobile communications/trunked radio in the paired frequency bands 450 MHz to MHz and 460 MHz to MHz (file reference BK 1a- 04/001; published as Ordinance 6/2004, Official Gazette Reg TP 7/2004, page 299), the Federal Network Agency assigned frequencies to three companies. In line with the regional approach, each assignee was assigned one frequency for the 24 individual coverage areas that - as a whole - cover the whole of the Federal Republic of Germany. Frequency assignments are not restricted to specific radio systems so these frequency usage rights are already neutral in terms of technology. However, they are dedicated for wideband private mobile communications/trunked radio with specific application features. These frequency bands were also identified by the RSPG for flexibilisation based upon the WAPECS opinion (RSPG final). The RSPG recommends providing more flexible conditions for frequency usage rights for these frequency bands, in particular by ensuring the principles of neutrality with regard to technology and applications. VI. BWA flexibilisation In October 2006 the Chamber adopted a decision on the order for and choice of award proceedings for the award of spectrum in the 3.5 GHz band for Broadband Wireless Access (BWA) and the determinations and rules for conduct of the proceedings (file reference BK 1-05/008, published as Ordinance 42/2006, Official Gazette Federal Network Agency 20/2006, page 3051).

13 13 The federal territory was divided into 28 regions for which frequency usage rights were auctioned off individually. Three companies acquired frequencies in all regions and thus throughout Germany. Two companies purchased frequency usage rights in two regions or one region. The purpose of use was determined by the Chamber as broadband wireless access and therefore in an as technology-neutral way as possible. Nevertheless, the Frequency Usage Plan had to be taken into consideration when determining the relevant product market according to section 61 (4) sentence 2 para 2 TKG. At the time the decision was taken, the Frequency Usage Plan only permitted use in the relevant frequency band within the fixed service. This meant that usage had to be restricted. It was explicitly pointed out in the decision that the intention is to extend the use of frequencies to mobile applications as soon as this is possible in accordance with legal requirements to give all parties concerned an adequate planning basis for potential frequency uses (Ordinance 42/2006, cit. loc. page 3084]). At the time of the Chamber's decision, the allocation of frequencies to the fixed service contradicted mobile use. For legal reasons, the introduction of the mobile component required a change in the allocation in the Frequency Band Allocation Table Ordinance by the Federal Government according to section 53(1) sentence 1 TKG. Changing the allocation of frequencies in the band 3.4 GHz to 3.6 GHz to the mobile radiocommunication service means that the National Table of Frequency Allocations has been adjusted as necessary. In its 859 th meeting on 12 June 2009 the Bundesrat consented to the second ordinance on the amendment of the Frequency Band Allocation Table Ordinance adopted by the Federal Government on 04 March 2009 according to section 53(1) sentence 2 TKG (Bundesrat official document 204/09 (Beschluss)). The ordinance of 14 July 2009 was published on 20 July 2009 in the Federal Law Gazette, part I, page 1809 and took effect on 21 July Thus, the first condition for the flexibilisation of frequency usage rights is met. In 2005 the frequency bands affected by this award were identified for flexibilisation by the RSPG according to WAPECS opinion (RSPG final). In the opinion, the Member States are recommended to provide more flexible conditions for frequency usage rights for these frequency bands, in particular by ensuring the principles of neutrality with regard to technology and applications. Following the adoption of the WAPECS opinion by the RSPG the European Commission called in Communication COM 2007 (50) for the frequency regulatory authorities of the Member States to investigate the frequency bands used for broadband connections to the customer s premises from 3400 MHz to 3800 MHz - and thus also the BWA frequencies concerned here - with regard to the implementation of greater flexibility. In addition, the European Commission adopted a decision on 21 May 2008 on the harmonisation of the MHz frequency band for terrestrial systems capable of providing electronic communications services in the Community (2008/411/EC, published in the Official Journal European Union no. L144 of 04 June 2008, page 77). The decision provides that the Member States permit the use of this frequency band for nomadic and mobile electronic communication. On 30 March 2007 the ECC of CEPT adopted the decision ECC/DEC/(07)02 on the availability of frequency bands between MHz for the harmonised implementation of Broadband Wireless Access systems (BWA). This decision involves the national frequency regulatory authorities being able to provide flexible conditions of use. Accordingly, the technical parameters are limited to the extent that is absolutely essential.

14 14 D. Flexibilisation concept The following issues were raised: The conceptional approach of the draft for a decision on flexibilisation which was presented for public hearing was welcomed. Flexibilisation is to be implemented as quickly as possible in a non-discriminatory manner. Endeavours should be made especially to avoid discriminating frequency bands against others from a temporal point of view during the flexibilisation process. Some respondents called upon the Federal Network Agency to clarify the legal nature of the decision. The Federal Network Agency had failed to explain the legal status it intended to assign to the draft decision. Designating it as a resolution did not suffice to provide sufficient clarity to market participants. This particularly applied in view of the arrangement of not including the 2.6 GHz band in the decision. A respondent suggested extending the spectrum categorisation from two to three categories: 1. mobile area coverage below 1 GHz 2. mobile cellular networks between 1 GHz and 3 GHz 3. portable capacity coverage above 3 GHz Splitting up the spectrum into three categories was deemed to provide greater support to operators when they need to optimise their business models and in doing so, need to take parameters such as wave propagation, cell radius and the desired data throughput rate into account. The Chamber has come to the following conclusion: Frequencies have now developed so far in technical, competitive-economic and international terms that frequency regulation no longer needs to be made more flexible in individual projects. Instead, a holistic approach can be taken to advance flexibilisation. Due to the Chamber's decision, all usage rights pertaining to frequencies that have been flexibilised at plan level can now be flexibilised in an open, transparent and non-discriminatory manner upon application. The Chamber took this decision for this purpose. The frequency regulation framework is to be made more flexible by taking the principles of technology and service neutrality into consideration as far as possible. The frequency regulation framework offers the Agency a great deal of scope for assessment and development. The Federal Network Agency will act fully in accordance with its obligations in using this scope. This means that its decisions will be compliant with the purpose of authorisation and in line with the legal provisions limiting the scope for assessment and development. When exhausting the legal scope, due regard must be given to the purpose set forth in section 1 of the TKG, the regulation and frequency regulation aims specified in section 2(2) and in section 52(1) of the TKG as well as the proportionality requirement derived from the principle of rule of law. The process of creating a more flexible frequency technology framework is based on international, procedural, economically competitive and regulatory aspects relating to frequency technology. Therefore, the transfer of the framework conditions governing the frequency bands concerned to a more flexible frequency regulation environment is to be implemented on the basis of a conceptual approach. In doing so, the technological, competitive, legal and international developments meanwhile realised are to be taken into consideration, on the one

15 15 hand, while the conceptual approach will ensure, on the other, that the effects of a more flexible approach on competition will be included in the relevant considerations (impact assessment). With its decision and the following implementation measures, the Chamber contributes to pan- European flexibilisation of the regulatory framework conditions for wireless electronic communications services. Regarding the request made in the comments that the legal nature of the decision be clarified, the Chamber wishes to point out that in legal terms the decision does not have any immediate external effects. To ensure that market players have the certainty needed for investment and planning decisions, the Chamber has deemed it expedient to make a decision on the approach to be taken by the Federal Network Agency in cooperation withh interested public parties and to publish this decision. This decision initially only binds the Federal Network Agency. As such, it is not an administrative act in terms of section 35 VwVfG. To clarify the difference with respect to section 132 TKG, this decision is not titled general administrative order but resolution. A resolution is also binding for the Federal Network Agency, meaning that companies are guaranteed a high level of certainty. The relevant offices of the Federal Network Agency will take the steps needed for implementing the flexibilisation concept pursued by this decision as soon as possible (for the 2.6 GHz-band see under A above). The Federal Network Agency s conceptual considerations are based upon the fact that the frequency bands concerned differ substantially in terms of their propagation characteristics. This differentiation was agreed to in the comments on the K9 18 discussion paper for the frequency bands 900 MHz and 1800 MHz. Due to the physical and technical propagation and attenuation properties of the electromagnetic waves, the frequency bands dedicated to wireless access for the offer of telecommunications services can be divided into two categories. The first category refers to frequencies below 1 GHz, for example, the frequencies 450 MHz, 800 MHz and 900 MHz. If the same transmission parameters are used, these frequencies, unlike higher ones, are marked by larger coverage ranges. Longer waves also allow better penetration of building walls. These frequencies are suited in particular to the provision of services in the field (area coverage). The second category refers to frequencies above 1 GHz. Due to a better channel reuse rate, they can be used for more closely meshed networks. They offer a larger transmission capacity in densely built-up areas and are thus particularly suited for providing services in smaller cells with many subscribers (capacity coverage). The Federal Network Agency is aware of the fact that this differentiation is important to network operators. The possibility of accessing spectrum from both frequency categories can be of substantial importance depending on the business model concerned. Particular importance was attached to this fact by the Federal Network Agency when testing the necessity and adequacy of the implementation measures. The classification into frequencies for area coverage (and coverage in buildings) on the one hand, and frequencies for capacity coverage on the other, is merely deemed a model. Another model, a three-tier one, was suggested by a respondent. This model is also suitable for illustrating the frequency-related physical-technical characteristics. Unlike the model used by the Chamber, the three-tier model also takes into account that the receiver may be portable or may even be used while in motion. However, in view of the principle under which frequency regulation is neutral in terms of application and technology, this distinction is insignificant, even though these usage properties are derived from the physical propagation properties. The Federal Network Agency also took account of the fact that frequency usage rights have been granted for almost 20 years in the frequency bands concerned that are used for providing nationwide mobile voice telephone services in particular. At the end of 2008, mobile networks had about million subscribers. This corresponds to a penetration rate of 130.6% with the result that - according to the statistical average - each inhabitant in Germany has more than one contractual relationship (Federal Network Agency, Annual Report 2008, page 77).