This consultation started on 13th August 2009 and ends on 11th December 2009.
1.1 In this document we set out revised proposals for the application of Administered Incentive Pricing ('AIP') to certain maritime uses of the radio spectrum. Specifically we are proposing to apply revised fees to the use of some, but not all, maritime VHF channels used for communications or Differential GPS.
1.2 We are proposing to introduce these changes in the first half of 2010, although we are proposing to phase in some of the changes over up to three years.
1.3 Many fees will not change;
We are not proposing to apply AIP to maritime VHF channels used on a shared basis for search and rescue and related activity (we are now proposing to include more channels in this exempt class). We are no longer proposing any changes to fees applicable to the marina channels. We are not proposing any change to the licence fee discount available to charities whose sole or primary objective is the safety of human life in an emergency. We are moreover setting out new proposals to make one or perhaps two maritime VHF channels available for use by such charities as working channels, on a shared basis, to be managed by the Maritime and Coastguard Agency ('MCA'), free of charge to such end users. As set out in July 2008, we are not proposing any change from the current licence fees for ship radio licences1.4 We also set out in this consultation document our intention not to apply AIP to the operators of aeronautical and maritime radar systems and aeronautical navigation aids at this time. We are instead proposing revised arrangements under which Government would undertake a new strategic management role with respect to the spectrum used by these systems.
1.5 This document does not deal with the issue of the fees that should apply to aeronautical VHF communications frequencies. At this time we are continuing to work with the Civil Aviation Authority (the 'CAA') to better understand the potential impacts of the application of incentive pricing to these frequencies. We expect to publish a separate document on future licence fees for these frequencies later this year.
1.6 Spectrum is a finite resource, in that the use of spectrum for one purpose denies its availability to other users. Demand can sometimes exceed supply. AIP is intended to apply market disciplines to the holding and use of spectrum rights, by prompting users to consider their spectrum needs in light of the AIP fees payable. AIP is already paid by most private sector users of spectrum, except where upfront fees have been set at auction. Many public sector users, including the emergency services, also pay AIP.
1.7 The civil aeronautical and maritime sectors are significant contributors to the UK economy and their ability to operate safely and efficiently is dependent on access to radio spectrum. Their use of VHF radiocommunications, radar and other radionavigation aids together occupies about 7% of all spectrum below 15GHz (-1-). Of this, VHF spectrum for which new licence fee proposals are made in this document spans frequency bands of around 26 MHz, parts of which are shared with some other applications.
1.8 Fees for the use of all maritime and aeronautical spectrum are currently set on a basis which wholly or partly covers the administrative cost of issuing the licences concerned. Consequently, applications which use frequencies which are in short supply often attract similar fees to applications which use less popular frequencies, and powerful transmitters which prevent others from using the same spectrum over a very wide area often attract similar fees to applications which have a much more localised impact. Also, licences to use spectrum in areas of high demand (for example around major ports and airports) attract the same fee as licences to use similar spectrum in remote areas with little or no demand from other potential users.
1.9 AIP can improve the value that is obtained for society from a given amount of spectrum, compared with free licences or flat-rate fees, without any need for the spectrum to change use. Where spectrum is subject to excess demand in its existing use, this means that there are potential users who want to make use of that spectrum but currently cannot. Because, in the absence of AIP, the price for using the spectrum does not signal its opportunity cost, operators get spectrum on a first-come-first-served basis. They may well hold onto more spectrum than they need once they have an assignment, because the cost to them is unrelated to the amount of spectrum they hold. Potential users who do not hold spectrum might have been able to produce more value from it than those who currently do hold it. If, in response to AIP, an existing user gives up some spectrum because that user values the spectrum at less than the AIP, and this is taken up by a new user who (necessarily) values it at more than the AIP, then it is clear that the value derived from using the spectrum has increased as a result of the imposition of AIP.
Footnotes:
1.- See Chapter 1 to Independent audit of spectrum holdings An independent audit for Her Majesty's Treasury December 2005 at http://www.spectrumaudit.org.uk/pdf/20051118%20Final%20Formatted%20v9.pdf
The following documents relating to this consultation are available: Applying spectrum pricing to the maritime sector, and new arrangements for the management of spectrum used for radar and aeronautical navigation aids Applying spectrum pricing to the maritime sector, and new arrangements for the management of spectrum used for radar and aeronautical navigation aids How To Respond Responses Corrections made on 11/09/09
http://www.tellthemwhatyouthink.org/consultation/con-2507-applying-spectrum-pricing-navigation-aids
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