Radio spectrum pricing
So why on earth are Ofcom even thinking about spectrum pricing for aeronautical and maritime users?
Why not just forget the whole idea and devote their efforts to other things?
Such as the DAB farce - soon to become the 'Betamax of radio'.
Sallyann1234, you wrote
That, I'm afaid, sums up Ofcom's failure. Aeronauical and maritime spectrum requirements are for safety of life, not mere 'business'....
Why not just forget the whole idea and devote their efforts to other things?
Such as the DAB farce - soon to become the 'Betamax of radio'.
Sallyann1234, you wrote
"This is just catching up with every other sector of business using radio"
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The Price is Right
At risk of pouring fuel on the flames - I've now read the proposal, and it sounds pretty sensible to me. At the moment, I believe that VHF comms channels are allocated in a vague "national interest" manner to users ranging from your local parachute club through to Heathrow approach. They're suggesting that in future, you should pay £1650 a year for each channel you're sitting on (£4950 if it's 25 kHz wide). Heathrow is the top-end, and seems to sit on 15 mixed channels, so they'll pay about £30k a year for the privilege. I doubt this will change their economic model much.
On the other hand, since VHF comms channels are in short supply, if this proposal gets a few spare channels freed up for other users, it seems pretty sensible. In fact, at £1650 a year, I quite fancy my own channel
The biggest weakness is the differential pricing model between 8.33 kHz channels and 25 kHz channels, because that choice is set by airspace policy and aircraft equipment rules, and wasn't actually up to the channel user to choose. A flat price per channel is the only thing I would recommend changing...
On the other hand, since VHF comms channels are in short supply, if this proposal gets a few spare channels freed up for other users, it seems pretty sensible. In fact, at £1650 a year, I quite fancy my own channel
The biggest weakness is the differential pricing model between 8.33 kHz channels and 25 kHz channels, because that choice is set by airspace policy and aircraft equipment rules, and wasn't actually up to the channel user to choose. A flat price per channel is the only thing I would recommend changing...
Don't confuse inefficient frequency management with opportunistic revenue generation!
IAOPA Germany has conducted an extensive examination of frequency management:
IAOPA has won significant concessions on the spread of 8.33 kHz radio with an agreement across Europe that they will not be mandated below FL195 until at least 2013 and possibly later.
Eurocontrol claims there aren't enough frequencies to go round and is demanding that every aircraft re-equip with 8.33 kHz-spaced radios, a demand that is estimated to cost the European GA industry some €2 billion. But IAOPA has demonstrated that this expenditure would be unnecessary if Europe got its act together on the existing frequencies. At the moment frequencies are allocated by individual countries, with each VHF frequency having an exclusive zone of up to 300nm around it. Huge numbers of frequencies have been allocated but are virtually or completely unused. IAOPA has pointed out that if the 27 frequency allocation offices in Europe were replaced by two people in Brussels, far better use could be made of the spectrum. The 27 offices disagree.
Michael Erb, managing director of AOPA Germany and a doctor of economics, has produced a technical paper showing the massive wastage in the current system. Martin Robinson says: "This is an excellent paper which shows there is plenty of capacity in Europe without 8.33 kHz. Eurocontrol have tried to ignore this paper so we have taken it to the European Commission, who asked Eurocontrol for an explanation. Eurocontrol tried to blind them with science, but the Commission has requested a full study and analysis. Their request seeks 'further information from Eurocontrol on how the current utilisation of the band could be assessed, and the potential gains which might be expected from improved practices. The outcome would provide the proper basis for a decision on the expansion of the newly adopted Regulation to the airspace below FL 195.'
"At a meeting in December I was able to ask the chairman of the EC's Industry Consultation Body if the ICB endorsed the EC's letter to Eurocontrol, and in effect they have no alternative but to do so. Eurocontrol is now bound to carry out the request. The earliest 8.33 kHz can now be mandated is 2013, and it may take longer."
Dr Erb adds: "This is a welcome development that will potentially save European general aviation many millions of Euros. A well crafted Europe-wide frequency utilization plan should easily prevent users of the lower airspace from having to re-equip with radios with channel spacing less than the existing 25 kHz."
IAOPA Germany has conducted an extensive examination of frequency management:
IAOPA has won significant concessions on the spread of 8.33 kHz radio with an agreement across Europe that they will not be mandated below FL195 until at least 2013 and possibly later.
Eurocontrol claims there aren't enough frequencies to go round and is demanding that every aircraft re-equip with 8.33 kHz-spaced radios, a demand that is estimated to cost the European GA industry some €2 billion. But IAOPA has demonstrated that this expenditure would be unnecessary if Europe got its act together on the existing frequencies. At the moment frequencies are allocated by individual countries, with each VHF frequency having an exclusive zone of up to 300nm around it. Huge numbers of frequencies have been allocated but are virtually or completely unused. IAOPA has pointed out that if the 27 frequency allocation offices in Europe were replaced by two people in Brussels, far better use could be made of the spectrum. The 27 offices disagree.
Michael Erb, managing director of AOPA Germany and a doctor of economics, has produced a technical paper showing the massive wastage in the current system. Martin Robinson says: "This is an excellent paper which shows there is plenty of capacity in Europe without 8.33 kHz. Eurocontrol have tried to ignore this paper so we have taken it to the European Commission, who asked Eurocontrol for an explanation. Eurocontrol tried to blind them with science, but the Commission has requested a full study and analysis. Their request seeks 'further information from Eurocontrol on how the current utilisation of the band could be assessed, and the potential gains which might be expected from improved practices. The outcome would provide the proper basis for a decision on the expansion of the newly adopted Regulation to the airspace below FL 195.'
"At a meeting in December I was able to ask the chairman of the EC's Industry Consultation Body if the ICB endorsed the EC's letter to Eurocontrol, and in effect they have no alternative but to do so. Eurocontrol is now bound to carry out the request. The earliest 8.33 kHz can now be mandated is 2013, and it may take longer."
Dr Erb adds: "This is a welcome development that will potentially save European general aviation many millions of Euros. A well crafted Europe-wide frequency utilization plan should easily prevent users of the lower airspace from having to re-equip with radios with channel spacing less than the existing 25 kHz."
Every sector using radio spectrum has in turn demanded to be exempted from AIP.
Business? "unemployment!
Emergency Services? "safety of life!"
Military? "national defence!"
Aeronautical and Maritime? "safety of life!"
But guess what? When faced with paying a competitive price for their spectrum, each of them in turn finds that they can manage perfectly well with less.
Efficient spectrum planning and AIP to reduce demand could well stave off further 8.33 channelling for a while. However 25kHz channelling goes back to the dark ages. Virtually every other service is now on 12.5k or less for single analogue channels.
Business? "unemployment!
Emergency Services? "safety of life!"
Military? "national defence!"
Aeronautical and Maritime? "safety of life!"
But guess what? When faced with paying a competitive price for their spectrum, each of them in turn finds that they can manage perfectly well with less.
Efficient spectrum planning and AIP to reduce demand could well stave off further 8.33 channelling for a while. However 25kHz channelling goes back to the dark ages. Virtually every other service is now on 12.5k or less for single analogue channels.
I would certainly agree that 8.33 kHz channelling was an utterly daft idea and that 12.5 kHz would have been the obvious way to go...
But, sadly, that's history.
Out of curiosity, how many other EU member states are proposing to inflict 'Administered Incentive Pricing' on internationally-agreed RF spectrum elements?
Or is this just a British (mis)government invention?
But, sadly, that's history.
Out of curiosity, how many other EU member states are proposing to inflict 'Administered Incentive Pricing' on internationally-agreed RF spectrum elements?
Or is this just a British (mis)government invention?
We are not alone. Most EU administrations are introducing pricing in one form or another. You can link to them via the ERO web site:
ERO
AIP and auctions are only part of the package. The general principle now is that spectrum becomes a financial 'good' like any other product. Instead of buying an individual user's licence from government for radio channels, you buy spectrum rights so that you can use the spectrum yourself and/or trade those rights to others at a profit. Chunks of spectrum are being bought, managed and rented out by wholesalers.
Whether this is a good thing is a matter of opinion, but there is a good living in it for financial and technical advisers!
ERO
AIP and auctions are only part of the package. The general principle now is that spectrum becomes a financial 'good' like any other product. Instead of buying an individual user's licence from government for radio channels, you buy spectrum rights so that you can use the spectrum yourself and/or trade those rights to others at a profit. Chunks of spectrum are being bought, managed and rented out by wholesalers.
Whether this is a good thing is a matter of opinion, but there is a good living in it for financial and technical advisers!
The general principle now is that spectrum becomes a financial 'good' like any other product. Instead of buying an individual user's licence from government for radio channels, you buy spectrum rights so that you can use the spectrum yourself and/or trade those rights to others at a profit. Chunks of spectrum are being bought, managed and rented out by wholesalers.
I have no qualm with much of 'spectrum pricing' - except for government efforts to hasten 'analogue switch off' for terrestrial broadcasting so that they can flog off huge chunks of spectrum to the highest bidder. Instead of insisting on high quality digital broadcasting, Ofcom have allowed inadequate bit rates in order to squeeze more onto a smaller section of the RF spectrum, allowing more to be made available for selling off.
In particular, that useless turkey known as DAB which was intended to bring 'CD quality' to radio, has been allowed to use such low bitrates that the resulting broadcasts sound worse than analogue VHF FM. Ofcom are trying to prop up this poor system; even if they succeed those stupid enough to buy a DAB receiver will find that it is obsolete in a few year time...
Remember 'Rabbit'? OnDigital?? Both examples of poorly thought out systems - and DAB will undoubtedly prove to be the same.
I am also cynically sceptical about 'HD' TV. The broadcasters have again been allowed to use low bitrates on current digital platforms, so that even with high quality source material, the picture is often worse than BSB were capable of broadcasting 18 years ago.
A more efficient frequency allocation model should be mandated for the aeronautical frequencies in particular. It should be simple enough to map current transmitter sites, protected range requirements and spectrum available, then allow a software program to optimise the allocation of frequencies.
You are still reading more into the consultation than is being proposed.
I outlined above the general principle that Ofcom now follows. They call it their "marked based approach".
BUT what they are proposing for the specific cases of aeronautical and maritime spectrum excludes the trading aspects for very obvious reasons.
I strongly suspect that spectrum users, whether large airlines or private fliers, will notice little or no difference when the process is all over.
Aviation faces far more serious problems at the moment.
I outlined above the general principle that Ofcom now follows. They call it their "marked based approach".
BUT what they are proposing for the specific cases of aeronautical and maritime spectrum excludes the trading aspects for very obvious reasons.
I strongly suspect that spectrum users, whether large airlines or private fliers, will notice little or no difference when the process is all over.
Aviation faces far more serious problems at the moment.
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How safe does life get?
BEagle, you grumble about putting a price on "safety of life" communications. I'm with you on that, but to play devil's advocate for a moment, there are 2,280 VHF comms frequencies in Europe. How many of 'em are needed for safety of life? A few hundred, perhaps? 
And that of course is the point...
And that of course is the point...
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Just another example of the many stealth taxes which the current UK Government finds so attractive. It's got nothing to do with spectrum efficiency, the original Cave report was commissioned by the Treasury and I doubt you'd choose a Professor of Economics to write the report if your prime objective was better use of the spectrum.
Aviation's use of spectrum is inefficient and outdated but Ofcom knows perfectly well that any change requires International agreement and that those affected by the charging have limited ability to influence the speed or type of change. It is, for the Treasury, the perfect tax as those affected have virtually no choice and can't avoid it.
Aviation's use of spectrum is inefficient and outdated but Ofcom knows perfectly well that any change requires International agreement and that those affected by the charging have limited ability to influence the speed or type of change. It is, for the Treasury, the perfect tax as those affected have virtually no choice and can't avoid it.
Ofcom have now released a so-called 'update':
Ofcom consultation on introducing Administered Incentive Pricing (AIP) for the maritime and aeronautical sectors: December 2008 update | Ofcom
The fact that they have been sent away with their tails between their legs to think again is, curiously, not mentioned.
The fight to stop price hikes resulting from this government greed goes on!
Ofcom consultation on introducing Administered Incentive Pricing (AIP) for the maritime and aeronautical sectors: December 2008 update | Ofcom
The fact that they have been sent away with their tails between their legs to think again is, curiously, not mentioned.
The fight to stop price hikes resulting from this government greed goes on!
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The fact that they have been sent away with their tails between their legs to think again is, curiously, not mentioned.
Turkeys don't generally support the idea of Christmas.
