HC Deb 17 June 1996 vol 279 cc313-5W
Mr. Harry Greenway

To ask the President of the Board of Trade what progress has been made in the review of the future management of the radio spectrum; and if he will make a statement. [33349]

Mr. Lang

I am today publishing a White Paper, "Spectrum Management: into the 21st Century".

The radio spectrum is used by used by a wide range of businesses and public sector services and in a variety of scientific and social applications. Radio services are of considerable importance to the economy and are growing rapidly. The White Paper announces proposals to improve the way in which the finite resource of the radio spectrum is managed so that future growth can be accommodated. We intend to achieve this by bringing forward legislation on spectrum pricing when parliamentary time is available. This will allow fees for licences to use spectrum to be set to reflect its value more closely instead of being linked to the costs of spectrum management. The White Paper seeks views on the detailed application of spectrum auctions and administrative pricing.

The proposals will benefit the economy, enhance competitiveness and create jobs. By promoting spectrum efficiency, they will: tackle spectrum shortages and congestion affecting the most heavily used services in some parts of the country, increased opportunities to access spectrum so that more users can be accommodated in the finite spectrum that is available and the rapidly growing demand for radio services can be met; accelerate the introduction of advanced digital technology; and increase competition and choice.

The purpose of spectrum pricing will be to achieve spectrum management objectives, rather than to increase revenue. Pricing will be phased in and applied selectively with a review after three years. Increases in charges will be focused where congestion is worst and kept to the minimum necessary to achieve spectrum management objectives. Most users will face no increases in fees and may benefit from reductions. Some users will face increased charges, but the increased availability of spectrum will bring considerable economic benefits overall. There will be concessions for safety-of-life charities.

Radio makes a substantial and growing contribution to wealth creation, competitiveness and jobs. The UK is a world leader in the use of radio. This success is placing ever-increasing demands on the finite spectrum resource. Unless we can meet these, the UK will suffer considerable economic losses as businesses are deprived of spectrum and new services are delayed.

The Radiocommunications Agency has fully explored existing regulatory measures to manage the spectrum effectively. These are no longer sufficient, so we intend to introduce spectrum pricing to augment them. The legislation will include provisions to allow enhanced security of tenure for licensees and selective financial assistance to radio users to accelerate desirable changes in spectrum use.

The public sector, which is a major user of radio, will be charged on a basis comparable with the private sector, but there will be safeguards for the operations of essential services.

The legislation will address the way in which fees are charged for licences under the Wireless Telegraphy Act 1949. It will not affect the licensing of independent broadcasters under the Broadcasting Act 1990 and the Broadcasting Bill currently before Parliament, nor the BBC's position under its royal charter and agreement.

The adoption of digital broadcasting is the key to the Government's long-term spectrum strategy, since it has the potential to generate exciting wealth creation opportunities through the release of valuable spectrum for new broadcasting use or other applications. The Broadcasting Bill provides for a review of progress of digital broadcasting. The White Paper states that this review will consider the use of spectrum pricing to accelerate the transition from analogue to digital broadcasting.

The White Paper also deals with the organisation of spectrum management. Core functions, such as international representation, overall control of spectrum strategy and enforcement, need to be retained within Government. But there is already considerable private sector involvement in various aspects of spectrum management outside the core functions and we are keen to encourage further private sector participation where it delivers improved quality of service.

The measures announced in the White Paper are necessary to deal with pressing spectrum management problems. They will provide a framework of progressive spectrum management for continued growth and success into the next century and open the door to further market-based reforms, such as secondary trading of licences.

I am placing in the Libraries of the House copies of the White Paper and a background technical study.