Highlights of the presentations
In the environs of the Andaz Hotel, Liverpool Street, Bird and Bird’s Graeme Maguire, partner and co-head of the firm’s international Communications Group, and Colin Long, of Counsel, welcomed around 100 assembled attendees.
Radio spectrum is vital to society
Colin spoke first on the importance of wireless communications in society and how in the future they will become even more pervasive and vital to us. Applications of wireless will continue to proliferate, e.g. in the home, office, tracking, security, finance, tourism, utilities, entertainment, transport and medicine.
If spectrum becomes as ‘the air that we breathe’ for modern communications, then a big challenge could be to avoid starvation and monopolisation. The current model of legislation and regulation could in time become in need of significant overhaul to cope with the impact of new technologies on access to spectrum.
There is a large proportion of spectrum still in exclusive public sector use – e.g. nearly 50% used for defence, transport, emergencies and science. The Government plans to release from the public sector an additional 500MHz below 5GHz by 2020.
These developments and new user applications bring with them threats and challenges for personal information and data control. The consent process embodied in current privacy regulation is inadequate to protect consumers who are sometimes too quick to unwittingly agree to widespread use of their personal data – new EU data protection regulation aims to address this and make the consent process more clear, positive and transparent.
Use of spectrum doubles every 30 months
Following from Colin, David Cleevely of the Centre for Science and Policy of the University of Cambridge elaborated upon the current demands upon spectrum in the UK. The use of spectrum continues to follow ‘Cooper’s Law’ by doubling every 30 months but by using thinner ‘slices’ of spectrum, modulation techniques and more efficient architectures, sufficient spectrum would be conserved to meet these demands. In reality, spectrum is a very underutilised resource. Taking Apple as an example of a disruptive intervention, David showed how the component cost of the various elements of the i-Phone led to a product which despite its overall cost was so attractive and desirable that its sales volumes eclipsed all its competitors. Apple has thus become a mobile device company.
Equally, by building on new technologies, such as femtocells and other low power uses, and utilising design space and architectures, spectrum could be opened up for use and innovation without overwhelming the system’s capacity.
Finally, David spoke of the impact of wireless communications on surveillance, health, payments and ticketing, personal privacy, crime, social networking and democracy.
Efficient use of spectrum key to meeting demand
Picking up the baton from David, Graham Currier, a consultant and former Chief Technology Officer of wireless operator Freedom4, began with some revealing statistics on the development of the mobile communications industry. This year, 2012, the number of mobile handsets in existence has finally surpassed the number of human beings. The volume of mobile data traffic is now eight times the size of the global Internet back in 2000. By 2016, it is predicted that 60% of mobile phone users will be generating over 1GB of data every month. Against this backdrop the players in the industry must work out how to survive and build for the future. To do this, efficient use of spectrum is the key factor. There is a small ‘sweet spot’ in spectrum bandwidth terms and ensuring that the many and varied spectrum stakeholders have access to this sweet spot is a very complex challenge often involving a number of compromises and competing requirements. How we best achieve those compromises and share spectrum is a hotly contested debate.
Ofcom’s core responsibility here is to secure the optimal use for wireless telegraphy of the electro-magnetic spectrum for the benefit of citizens and consumers. The keys to such optimisation are not just spectrum of the right quantity and quality but also efficiency (e.g. re-use). Here new network architectures utilising pico cells and WiFi data drop-off can significantly improve capacity and coverage. Higher capacity requires either more spectrum or greater efficiency; this can come from new releases (e.g. MOD) as well as from new technologies, e.g. cognitive radio, TV white space.
The debate also sometimes extends to competing claims as to what can be achieved with spectrum and in Graham’s view, to avoid misconceptions and misleading signals to consumers, regulators, etc. all stakeholders needed to adopt more honesty when looking at these spectrum issues: honesty about the network architecture used to make best utilisation of spectrum and honesty about the technical capabilities, such as data throughput, signal range and data contention rates that are achievable.
Mobile devices will become fashion accessories with underlying rights
Looking at the trends in the wireless communications industry, Lorna Brazell, partner at Bird & Bird, looked at the future legal challenges facing the industry from the intellectual property perspective. Increasingly, mobile devices are becoming smaller, more fashion-orientated devices. What new issues would this pose? The industry has already and is currently, seeing legal disputes over the form and function of mobile devices. Were devices to become even more so items of fashion, perhaps ‘wearable’ like jewellery, a whole new set of intellectual property rights holders would be drawn into the industry. Such wearable devices bring with them underlying rights covering elements such as power harvesting/storage, communication protocols, interface technology, technologies for accessing new areas of spectrum; also rights in software, databases, user interface design and layout, and user protection e.g. radiation barring, heat shielding.
Interoperability of devices (particularly in M2M communications) will be key, and for this standards-setting will be essential: a question is who should best set these standards, will all the relevant players be able and allowed to participate, and how licensing will be governed e.g. through FRAND access.
Underlying rights may still be operative despite their originators having had no contemplation of their futuristic applications. Finally, Lorna looked at whether applications of wireless communications in the future might embrace an ‘open source’ model, in contrast to today’s more proprietary approach. Such an approach has until now been brought into the universal access/FRAND model, whereas open source would of course be more free and flexible; she believed this might work well for software but not necessarily for hardware/firmware in terms of cost reliability and security.
Metadata will be the future focus of business and Government
Finally, Peter Cochrane OBE, of Cochrane Associates, took the floor and moved the discussions even further into the future. Everything and everyone will be connected and communicating, and increasingly mobile. Metadata around communications devices and users will be the future focus of business, of care and of Government and that is where spending power will gravitate. In the face of all this advancement the biggest challenges facing the industry are old mindsets, old models and vested interests.
For example, it is a myth that spectrum is in short supply. Witness the example of the City of Chicago where a recent analysis showed that no more than 17% of the spectrum commercially available was actually being utilised. However, with the proliferation of devices and wireless uses/applications, and the application of technologies like spread spectrum, the distances travelled by the communications and thus the power emitted would decrease significantly, leading to seamless access across multiple cells and networks, with less and less regulation and control being required.
In Peter’s vision of the future of communications, therefore, access to spectrum would no longer be sliced into bands but would be open and based on greatly enhanced processing power and spread spectrum, adaptive technologies. This is the best way to ensure the maximum, efficient use of the scarce resource of spectrum.
Graeme Maguire then chaired a Bird & Bird legal panel (Colin Long, Sven-Erik Heun, Ruth Boardman and Gerrit-Jan Zwenne) which considered some questions and thoughts arising from the previous presentations:
Q1. Ofcom 4G consultation last month - “The auction [of 250 MHz] is likely to be the last significant opportunity to obtain prime mobile spectrum for many years”: is the implication that spectrum is analogous to real estate? Is the analogy still apt?
The panel thought that this rather historical take on spectrum was still very much alive, e.g. in the thinking of Ofcom and UK Government. However if the Cleevely and Cochrane view of the world ever became a reality so that licence exemption was the norm then, again in real estate terms, we would finally have arrived at a ‘spectrum commons’. Panel were not sure exactly when this might happen but e.g. in the UK the emphasis of our current legislation is almost entirely on licensing and interference avoidance, so some re-casting would be in order. Public sector spectrum could ease the pressure, but will take time.
Q2. Are auctions the best method for spectrum awards and assignments? What alternatives are there – e.g. competitive or comparative awards - and which regulatory duties are relevant here?
It was noted here that EU regulations [per Authorisation Directive/Framework Directive] require NRAs to follow “open, objective, non-discriminatory and proportionate procedures”. So competitive and comparative awards are at least equally, if not more, susceptible to legal challenge than auctions.
Germany foresees tenders rather than auctions for frequencies used for broadcasting at least. Thus the principle there is that there should be no auction where the public interest is involved.
In the Netherlands the same situation pertains as in Germany: commercial radio frequencies were assigned via a beauty contest, however with a financial bid (so it’s a tender with auction aspects); in order to have TDAB introduced and developed the current commercial radio stations were allowed to extend the term of their licences for 6 years: so no (or limited) spectrum for new entrants.
Whatever assignment methodology the Government chooses, there will always be litigation about that. Auction still seemed the most transparent allocation instrument, as long as it is simple. In the Netherlands we see that auctions can get very complicated and unpredictable (i.e. not transparent) because Government and Parliament have specific wish lists (e.g. at least one new entrant, at least one price fighter, coverage, etc.).
Q3. What are some of the practical challenges data protection poses in the wireless space?
One fairly obvious challenge is how to present meaningful information to consumers on small screens so as to meet DP notice/consent requirements.
This is also relevant in the context of location-based services. Data Protection Authorities sometimes seem to use very creative and far-reaching interpretations of notice requirements. Perhaps multi-layered privacy notices will have to be used (although we are not certain DPAs or the courts agree with that).
Q4. Have data protection regulators tried to address the privacy issues surrounding use of wireless technology?
A good example is Google’s collection of wireless router data and MAC addresses and the expansive attempts of regulators to ensure that this is treated as personal data. (This culminated in specific changes to the definition of personal data in the draft EU Data Protection Regulation).
In addition, for the Netherlands, the Bill that aims to implement the relevant EU Directives was amended to include strict regulation of deep packet inspection, allowing it only to be used with express end-user’s consent or if necessary to provide the communication service, for network integrity and security purposes, or to comply with a legal obligation.