§ Mr. John Browne
asked the Secretary of State for Trade and Industry whether he has received the Director General of Oftel's advice on the future of Bands I and III and on wide area paging; and if he will make a statement.
§ Mr. Pattie
I have received the Director General's advice and I have also been able to discuss it with him. I understand it will be published today.
I have found the Director General's advice extremely helpful in reaching decisions on these matters. Our discussion enabled us to explore the more complex issues and reach agreement on means of finding solutions.
Before reaching my decisions I received comments from a number of hon. Members, from radio manufacturers and users. In addition, I and my officials have discussed the issues involved with industry and user groups and with individual companies.
In the light of the Director General's advice and given the uncertainty of forecasts of future demand for private mobile radio services and of the nature and speed of technical developments, I have decided against making allocations in the lower and upper sub-bands of band III at this stage and that therefore new band III users should operate in the middle sub-band of band III.
I am aware of the increasing interest in the United States of America in exploiting single side band modulation techniques to improve radio frequency spectrum use, particularly for land mobile radio and aeronautical public correspondence, and I am pleased to note that the United Kingdom has a prominent lead in the development of this technology. It is therefore sensible that encouragement be given to further development of SSB and I shall consider at the appropriate time its introduction in either the upper or lower sub-band of band III, or indeed in other parts of the radio spectrum.
I have decided that the balance of interest of United Kingdom industry and users of private mobile radio lies in the establishment of mobile radio on a nationwide basis. An invitation to apply by the beginning of September for licences to operated such a service will be issued on 1 July and I have asked the Director General to consider these applications and to make recommendations by the end of the year. Copies of the notes of guidance for applicants can be obtained at OFTEL.
For spectrum engineering reasons, including the need to avoid causing interference to neighbouring countries, it 505W is possible that only one licence will be issued on a nationwide basis. Certainly these reasons will preclude the assignment of more than a handful of national frequencies. In the long term, some 200 channels will be made available for nationwide services but initially somewhat less than this number will be released.
Whether one or two systems are licened on a nationwide basis initially, provision will be made to allow a further national private mobile radio network to operate in the lower sub-band of band III as and when demand and the needs of competition call for it.
One of the main reasons prompting this decision is that a demand for private mobile radio on a national roaming basis does appear to exist and could not be met by a collection of local systems; a geographical coverage requirement will be imposed on any successful applicant for a national system licence, but I believe it would be better to decide on that requirement after the applications have been received. The allocation of a substantial section of the available spectrum for private mobile radio in band III on a nationwide basis requires that careful consideration be given to the question of competition. In particular, the case which the Director General has made for two networks will need to be weighed carefully against the engineering contraints to which I have referred. Here again this may prove easier once applications have been received. Applicants will therefore have to state whether they are seeking to operate a single network with a maximum of 200 channels or one of two networks with a maximum of 100 channels each. They will also have to state whether they would accept a licence on either basis.
The Director General will, of course, give weight to this and other competition questions in preparing his recommendations on the applications for licences. But the Director General and I believe that some conditions should be laid down in advance. First, as with the two cellular radio networks, a nationwide radio network operator will be able to sell its services only to service providers. Specific permission will have to be sought to deal directly with end users. Secondly, because of the potential conflict of interest, the existing public telecommunications operators should not be allowed to become nationwide network operators, although this exclusion should not extend to their associated companies (including parents and subsidiaries). However, they should be allowed to be service providers.
The Director General has recommended that the particular dominance of BT is such that neither they nor their subsidiary companies should be allowed to be a nationwide network operator or service provider using it. I have decided that I must accept the Director General's advice on this issue. However, I agree with him it would be wrong to deprive the user of the potential expertise BT, in particular, possesses in this area and it would not be debarred from owning a minority holding in a service provider using a nationwide network. I also hope that BT and any other site owners will be prepared to negotiate for the use of their existing radio mast sites by any network operators.
I have considered carefully the Director General's advice that similar consideration should apply to Racal. In our discussion we concluded that the arguments were finely balanced and I have come to the conclusion that it would not be right to exclude Racal in this way. I will, however, ask the Director General to satisfy himself if it does apply that its proposal safeguards competition policy.506W
I have already announced, on 28 January 1985 at columns 47–8, that no new national radio telephone service will be licenced before the position is reviewed towards the end of 1986. Applications for licences to operate a nationwide radio service should therefore be on the basis that there will be no PSTN interconnection. But I have accepted the Director General's advice that applicants may propose how interconnection would be used on their service, if permitted, and the Government may decide on the basis of these proposals to allow a limited degree of PSTN interconnection.
By no means all the demand for new private mobile services requires a nationwide system. In the interest of competition and to encourage smaller companies, I have decided to licence five smaller local networks of 20 channels in London and, to these as well, an invitation to apply for licences will be issued on 1 July and I have asked the Director General to consider these applications and to make recommendations. Copies of the notes for guidance for applicants can be obtained from OFTEL. In addition, my Department will on 1 July be inviting applications for licences to operate still smaller, local networks of five to 19 channels in the 10 areas of greatest demand for private mobile radio services (outside London) — Greater Manchester/Merseyside, Birmingham, Glasgow, Leeds/Bradford, Cardiff/Swansea, Aberdeen, the Nottingham area, Reading, the Northampton/Cambridge/Bedford area and the Tyne/Tees area. The timing of the decisions on the applications will be the same as for those for the nationwide service. The same conditions in the interest of competition — the division of the roles of network operators and service providers and limitations on the involvement of public telecommunications operators and BT, in particular—shall apply to the smaller networks as to the nationwide service, Limited PSTN interconnection will be permitted on these networks, subject to the operators meeting specified minimum loading criteria. Applications may be made by the same person in respect of more than one area, but for no more than one 20-channel system in London. Copies of notes for guidance for applicants can be obtained from the Radio Regulatory Division of my Department.
I have allocated frequencies in the middle sub-band of bands III to users who have been displaced from bands II and mid-band, and I have made a block of frequencies around 139/148 MHz available for the fuel and power industry. Displaced users in band III will be required to use equipment conforming to specification MPT 1323. My Department is currently preparing a new specification for mobile radio equipments—MPT 1326—which is similar to MPT 1323 but will apply to bands other than band III and which generally conforms to a European recommendation. It is desirable that the limits which apply to the common elements of these specifications are the same and therefore it will be necessary to make minor amendments to MPT 1323. This will be of advantage to the mobile radio industry and also to the fuel and power industry, who may either adopt the new specification or use the relevant parts of the modified band III specification.
Also in the middle sub-band of band III, I have decided to allocate frequencies to a number of other users. First, the United Kingdom is developing at around 900 MHz a digital cordless telephone system suitable for domestic and small business use. Many aspects of it could have application in the development of cordless PBXs for use in offices. I intend to make available for cordless PBX 507W systems five blocks each of 1 MHz, which cannot be used for a conventional radio system. Secondly, a study of the frequency requirements of the services ancilliary to broadcasting (such as radio microphones) has identified the need for six blocks of 0.7 MHz each in band III and I intend to allocate these for this purpose. Finally, the Government are considering the possibility of authorising the use of channels for two-way mobile data systems and I would welcome proposals.
The demands on the spectrum within band I, which was also released by the cessation of 405 line black and white TV services on 6 January of this year, have not yet emerged to as firm or as full an extent that we are able to settle the whole future of the bands. Moreover, my Department has only recently been able to begin discussions with neighbouring administrations about the use of the band.
Accordingly, I have decided to allocate only a limited number of frequencies to new band I users at this stage. First, as with band III, the study of the frequency requirements of the services ancillary to broadcasting has identified a need for 4 MHz and two other allocations of 0.35 MHz each in band I and I intend to allocate these for this purpose. Secondly, I am conscious that the interim Merriman report recommended that the radio amateur service should be given an allocation on the band and I am therefore proposing to fulfil that recommendation by allocating the band 50–50.50 MHz to radio amateurs. Thirdly, I intend to allocate 0.5 MHz within the band to satisfy the demand for further spectrum for on-site paging services. Finally, I intend to allocate the band 49.82–49.90 MHz for the use of general low power devices which have minimal potential for causing interference, such as toys and telemetry equipment. It is the intention that such low powered devices would be permitted to operate with the minimum of restriction and my Department will consider how to achieve this. Other claims for usage of band I are also being considered, for instance discussions are being conducted with industry to make an allocation for long-range security and other alarms and the band will also have attractions for mobile radio services.
On wide-area paging, in the light of the Director General's advice I have decided that the growth in the demand for national wide-area paging services is such that one or two new services should be introduced at 153 MHz and one or two more at 454 MHz. An invitation to apply by the beginning of October for licences to operate such services will be issued on 1 July and I have asked the Director General to consider these applications and to make recommendations by the end of the year. Copies of the notes for guidance for applicants can be obtained from OFTEL.
BT is in a particularly dominant position in the United Kingdom wide-area paging market and it has been argued that the existing operators should be given more time to develop in competition with BT before further operators are introduced. However, I believe that the Director General is right in advising that the balance of interest lies in allowing new competitors to BT to apply for licences for the new services. Such is BT's current market strength that it will not be among those allowed to apply, but its existing competitors will be eligible to apply.
Voice transmission as well as tone and data transmission, can be used at 454 MHz. Although it is more expensive in spectrum, I have decided that the nature of 508W the demand is a more important consideration and that applicants for licences should be allowed to propose the use of frequency at 454MHz for voice transmission.
Finally, I have decided to make available spectrum, also at 153 MHz and 454 MHz, for pilot wide-area paging systems to enable demand for new services to be tested.
The points which the Director has made in his advice about licensing private paging systems as this becomes practicable and the relative utility of spectrum at 153 MHz to new and existing users have been accepted. On his suggestion that spectrum be made available at 900 MHz for paging services, I have to say that at present the potential conflict with other users seems to rule out such a move, though the position might change at a later date. In view of the uncertainty, I have decided not to invite applications at this frequency.