Clause 157 - Conversion into and from wireless
Communications Bill
4:00 pm

Mr Andrew Lansley (South Cambridgeshire, Conservative)

I beg to move amendment No. 299, in

clause 157, page 142, leave out lines 26 and 27.

I must admit that, when I first read clause 157, I was not sure whether to try to remove subsection (1)(a) or subsection (1)(b), or both. However, on reflection, I decided that, technically speaking, the regulations that could be made for managing the conversion of a grant of recognised spectrum access into a licence could entail the necessary protections, but that it would be less likely for them to be satisfactorily transferred in the other direction—from a licence into a grant of recognised spectrum access. By its nature, the protection attached to a licence would be diminished substantially if it were translated into a grant of recognised spectrum access. I do not want to dwell long on the amendment, but use it to explore a point. To some extent, the grant of a wireless telegraphy licence implies the individual right of use of spectrum in an area or over some part of the frequency. That is implied under clause 161, which will exempt the need for a wireless telegraphy licence in circumstances where there is no risk of interference arising from use. That, in itself, is a reflection of article 5.1 of the authorisation directive, which states:

''Member States shall, where possible, in particular where the risk of harmful interference is negligible, not make the use of radio frequencies subject to the grant of individual rights of use''.

Therefore, by implication, the structure of the legislation should be such that it avoids the use of licences wherever that is possible.

I am none the less sceptical about the process by which RSA is to be turned into licences and vice versa. I am looking for a degree of assurance that we would not arrive at a situation in which the grant of RSA in the first instance could, for trading purposes, be translated into a licence without all the safeguards that would necessarily apply to the grant of a licence. Otherwise, we run the risk of going in the opposite direction to the demands of article 5.1, which are that individual rights of use should not be created where

they are not needed. The philosophy behind the clause still gives me a problem. The idea is that people should be able to change the nature of their licence or recognition for trading purposes, rather than backing out and changing it by making a new application in the proper way if the recognition they have, or the licence that they have received, is not appropriate to their use.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The question is whether spectrum trading is a good thing. It is widely agreed throughout the community that it is a good thing. The aim of the clause is to allow an extension of the benefits of trading, which is permitted through the arrangements that allow licences to be converted into RSA.

We have already discussed the fact that some frequency bands are shared between licence services and services that could be subject to RSA. In order to avoid interference it is often necessary to partition the spectrum between such services. Spectrum trading will allow that to be done by those who are directly involved in the market, rather than by regulation. That should lead to better use being made of the spectrum. For example, if a satellite operator wanted to extend its service, it could buy fixed-link licences from the present licensees, convert those into RSA in accordance with Ofcom regulations and use the spectrum for satellite downlinks. That would allow a reassignment of spectrum as circumstances changed and markets developed, which is how all of us believe that things should unfold.

There is a lot of rapid and unpredictable change in the communications market. The amendment would make it more difficult for the distribution of spectrum to be adjusted in response, which would hold back innovation and competition. It is not right to characterise what is happening as the opening up of some kind of back-door route into licensing, or as a surreptitious way to impose licensing where it would otherwise not exist. We want to facilitate the trading of spectrum. The interchange between RSA and licences will do that and it is important that that remains as part of the framework that we are introducing.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

We could come back to that during the debate on clause 161, although I suspect we shall go through it like a train. I do not wish to press the matter any further, but I want to be sure about things. I shall put it on the record and leave it with the Minister.

The nature of a licence is different from RSA. We have been struggling with that issue for most of the day. The Minister is right, in a sense, to talk about the desirability of efficient spectrum management. I subscribe to the general proposition that the recovery of costs for spectrum management and incentive pricing should be included where it is appropriate, and I subscribe to the view that spectrum trading is desirable. It does not, however, necessarily follow that it is right, in all circumstances, to enable people to switch from RSA to licences and vice versa. The change of use should be subject to safeguards and the regulations will need to address that.

If article 5.1 seeks that member states should avoid individual rights of use wherever possible—and RSA, by its nature, does not grant that—the switch from

RSA to a licence is actually the grant of individual rights of use, and it may be sought in circumstances where there is no harmful interference, because otherwise there may not have been a need for a licence in the first place, and that may grant individual rights of use when it is undesirable for us to do so.

Therefore, I will leave the Minister with this thought: the regulations need to be very clear about the relationship between licences and RSA, and the distinctions between them, and the desirability of avoiding people gaining individual rights of use in circumstances where that does not give rise to harmful interference. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 157 ordered to stand part of the Bill.

Clauses 159 to 161 ordered to stand part of the Bill.