Licensing framework for the Complimentary Ground Component (CGC) of the 2 GHz Mobile Satellite Service (MSS)

The UK Telecoms Market structure and policy framework is dominated by licensed vertical operators that have control over access to the infrastructure (including spectrum), active network equipment and the end customer (very much consumer oriented rather than Enterprise). As such service provision has largely been dictated by government / regulatory interventions, e.g. coverage obligations in spectrum licences, to drive coverage and more recently capacity to parts of the UK that would otherwise not be served on a purely economic basis. Unfortunately, such coverage and capacity obligations can lead to unintended consequences, e.g. the recent emphasis on 4G (LTE) roll-out has had a direct impact on the availability and reach of services such as 2G & 3G through rationalisation of the number of active cell locations to facilitate 4G roll-out. Furthermore, recent efforts to facilitate mobile services to ‘not spot’ locations has largely been unsuccessful due to a lack of commercial incentive / benefit to the licensed operators. 

In the context of future 5G and new digital infrastructure deployments the approach to market access will have a profound effect on the availability of services. If the established model is followed then incumbent providers will by default become 5G service providers and the inadequacies of the current arrangement will persist. One of the key attributes of 5G technology is its potential to enable industry verticals and the Energy Utilities are keen to consider 5G technology in its portfolio of solutions to facilitate future ‘Smart Grid’ developments. To this end we encourage DCMS and Government to ensure that the framework is suitably flexible to support the necessary industry investment by industry in such verticals which will inevitably require coverage and capacity to be deployed across the operational area of the Energy Networks and in so doing facilitate communications provision to areas of the UK that might not otherwise be served. From a broader ‘Enterprise Verticals’ perspective there may be the potential for more multiple industry verticals to utilise common network infrastructure to facilitate their discrete needs and in so doing establish a cost-effective approach to 5G and new digital infrastructure deployment. 

Long-term investment barriers are inherent in the current structure of the licensed operators in particular the extent to which the current vertical nature of the licensed operators results in previous investments in spectrum, infrastructure and network roll-out having a profound bearing / constraint on the operators’ ability to change their operational / commercial approach. Recent initiatives such as consolidating wireless infrastructure assets to reduce the number of active sites whilst at the same time extend network coverage and capacity with an emphasis on 4G services has enabled investment. However, a focus on a particular technology roll-out has implications for the other services carried and with the consolidation of these assets there is the potential for other services to be affected such as 2G & 3G. Nevertheless, there is a limit to the extent to which such consolidation can enable investment, particular challenges exist in the case of service roll-out to rural areas where perhaps investment through infrastructure consolidation is not an option as there is no infrastructure to consolidate. As a potential alternative approach for investment in communications infrastructure to facilitate the Industry Verticals there may be merit in considering the establishment of a ‘Wholesale Neutral Host’ approach whereby the Industry Verticals specify their requirements on a National basis and then a single Wholesale Network is deployed to which the Industry Verticals pay for access. To facilitate this approach spectrum rights could be entrusted in the ‘Neutral Host’ framework. 

No Comment.

Q4a. As noted in response to Question 3 there may be merit in seeking to establish a ‘Wholesale Neutral Host’ to serve Industry Verticals which might align with the category ‘Collaborative models at an Infrastructure level.’ 

When considering the economic drivers of the Industry Verticals it is imperative that the investment environment and timing of the investment cycle are taken account of, in particular the economics of supply of the Energy Utilities are predicated on defined Regulatory Cycles which will need to be accommodated. Furthermore, we encourage Government to establish cross Department Policy alignment to ensure that the benefits / gains by a specific Industry Sector can be realised through such alignment of Policy positions, i.e. ensure the Regulatory Funding provisions established by Ofgem are aligned to and enable the activities encouraged by DCMS. 

Q4b. No Comment.

As has been noted in response to prior questions Industry Verticals such as the Energy Sector have a keen interest in utilising new digital infrastructure to facilitate enhanced service capability through initiatives such as ‘Smart Grid.’ Investment in such initiatives will be dictated and enabled by other Government Policy interventions, e.g. establishing the Low Carbon economy. Hence, alignment across Government Departments and the Policy landscape will have a significant bearing on the extent which Industry Investment will be an enabler of the ‘New Digital Infrastructure’ future. The Energy Utilities are keen to work with DCMS and other Government Departments to facilitate an effective framework to enable such investment. Moreover, stable and resilient energy provision is key to facilitating a future connected world in which Industry Verticals that have mission critical attributes, e.g. Automotive, Health and Care, are able to depend on the communications capability and resilience of new digital technologies such as 5G. To this end, there is a mutually beneficial opportunity to be realised from establishing the needs of future Industry Verticals when establishing the framework for future new digital infrastructure deployment.